All Forum Posts by: Natalie Schanne

Johnny Fullerton - if the first guy is fine and wants to take the risk for his friend, make it clear they're both jointly and severally liable for the rent as long as tenant 2 is at the house. Tenant 1 doesn't get security deposit back after moving out, etc., unless tenant 2 also moves out concurrently. Tenant 1 continues to be liable for rent and late fees if tenant 2 holds over for any reason. I would allow it...

@Salvador Aragon - some agents are poor marketers. It would benefit the seller if he/she could complain to the brokerage office and get out of the listing agreement. 6% on 218 is like 13k cost that's not justified if the owner is selling the house on craigslist directly. But you may have to wait 3 months for the listing agreement to expire. 

It's never ok for the listing agent to not call you back when you inquire about the property.

Salvador Aragon - I wish I met more people like you who wanted to do my job for me (and I still got paid!) What's the current list price? Why doesn't the realtor drop it to 218k on MLS? The listing contract may say 5-6% of sale price paid to real estate brokerage, so the seller is on the hook for that amount if it sells to anyone (you or your assigned) while under the listing contract (sometimes 6 months). If you get a seller accepted offer on their MLS listing at $218k and get all your 'or assignee' paperwork and reasonable closing time / get out of jail inspection contingencies in there, you should be able to sell your contract for $225k or whatever to the next party (if there's demand.) How are you so much better at selling their house than their realtor with realtor.com / zillow / trulia and other marketing tools? The only reason I could imagine is if the seller's true will-accept price is far from the current list price. If the house is listed at $250, I might not get a $225k offer frequently. If the MLS list price and your contract assignment price are close, will an all cash buyer want this deal? Will there be enough profit? Good luck to you.

Gabriel P. - I use craigslist's housing section on its map feature to get an idea of going rental rates. Often apartments and individuals renting houses and/or condos will post. It's a good place to start.

@Maria McCreless - Thanks! No, he didn't mention I might have to replace the inside air handler/coil piece. I'll have to follow up and/or get another bid. I don't know if the internal coil system / air handler attached to the furnace is r22 or r-410a. Is there a model number or code to figure it out? (I don't know where the disconnected exterior ac condenser system came or how old it is from but I know it asks for 5 lbs of r22. But, obviously that isn't helpful if the internal coil system uses r-410. The furnace looks a lot newer than the exterior ac unit.)

Roger Sandmann - it's better to handle the tenant rent increase now (immediately after you own it) or have it delivered vacant before you own it. A couple months of transition really isn't significant. If she won't pay the fair market rental price, she could still give you the same 'you're throwing me out' guilt in the future. People have more options than you think they do. I rented a room in a nice 2 br house in Sacramento for $400/mo all utilities included. My life was better for being with someone else - I didn't need a 1/1 housing unit all to myself. My 1/1 rental alternative was at least $700/mo plus $100+ in utils. I used the money I saved to travel around the world visiting all 7 continents (because I was making 63k in my first job after college and spending like 6k on housing). You have no idea how much money people have or are saving. If you're planning to keep the property at the lower rent for any period of time, make sure your offer / contract price reflects it.

Isaiah Magallanez - I'm not an attorney or a cpa. There are a lot of tax benefits on transfer after death. (Stepped up basis to fair market value, assuming said house has been owned for more than 10 years and is worth more than what was paid for it and/or it has been used as a rental and depreciated down to a low basis.) If the house is worth the same as what she paid, there are gift tax considerations but not really any capital gains considerations. She can gift like $5m over her lifetime but you get the property at whatever its tax basis is. Example - bought in 1990 at 50,000, worth 250,000 today or rents for $2000/mo. Needs $10,000 in updating. Gifted to you transfers at $50k basis plus any documented improvements (modernization done before like new cabinets). Add your rehab budget of $10k. If you sell at 250k, you pay long term cap gains on $250k-50k-rehab (10k)=$190k. Versus after she passes away, there may be inheritance tax but you sell for fair market value or ~$250k with no cap gains. Example answer: http://www.elderlawanswers.com/giving-your-home-to-your-children-can-have-tax-consequences-9667 Can your grandma put it in an entity she owns until death but you control? This could make her tax filings a little more complicated if you're renting it out and acting like a PM. You could finagle a contract to extract all the rental profit.

David Shapiro - I am working on a fix and flip property with a disconnected outdoor unit. Ac guy quoted me the same $125/lb r22 but he can get 30lbs r22 for $700ish online. Which is like $25/lb. He quoted me $1600 to put in 5 lbs and hook up and test my old unit with no warranty. (I think this is high.) Or I could pay $2600 and he'll install a new outdoor ac condenser 1.5 tons 14 seer and guarantee it. New refrigerant type. (What costs so much? I priced a goodman unit for like $700). Now, I don't know if the indoor coils I have are any good... (so that might cost me another bit. This same guy offered a new 96% efficient furnace with coils and outdoor Ac for $6000 in NJ with 10 yr parts and labor). It's important that the indoor coils you have match the size of the system. Also don't overbuy the tonnage an Ac system because it will cause it to cycle on and off more. People were trying to sell me 2.5 tons for a 1200 sf house and I need 1.5 maybe 2. There are many good calculators online with a map of where you are and btu of cooling needed per sf.

John Roberts - Option A) Seller reduces your purchase price equivalent to the fake rent amount (25%/mo x lease duration). You buy. You rent something until lease able to be terminated. You receive the $$/mo promised by seller who sold you the leased property. He or she knew the $$ received wasn't the lease's face value. Option B) You buy with cash for keys agreement and make the tenant go away that you wanted to go away anyway. (If you were going to pay cash for keys to have it vacant on closing, the $$ on the lease contract didn't matter). Option C) Tell Seller to tell PM to ask employee to voluntarily terminate the lease and give you the property vacant on closing / in 30 days or you will cancel your purchase contract and report PM to RE board where they will probably be fined. No cash for keys. Consider consulting attorney about suing seller for misrepresentation assuming you would never have paid the $3000 in inspections given the info you know now. Did you already have a sit down with the tenant to convince them to move out so you can buy for the purchase price you wanted and get the property vacant? If they wanted to help the seller originally buy the property, wouldn't the pm also be willing to help the seller sell it? Obviously tenants have rights and your right is to cancel the purchase contract. Good luck.

Brad Fausett - sorry this is happening to you. It sounds like you were given material information you chose to ignore. Contact the town to see what you can and can't do according to your value add plans. Sometimes historic properties can allow you to claim tax credits while renovating. If the value is significantly affected, you should talk to your attorney about suing the seller for non-disclosure / fraud and damages, especially if there are written documents from the seller that the home is not historic / governed by special codes and you can prove they knew it had restrictions. If you could have easily found out that it was historic and/or already did but ignored it and closed anyway, it might be a hard battle to win. If the seller says the roof is 5 years old and the home inspector says it's 15 and needs to be replaced soon, and you close anyway, would you expect to sue over the roof? Probably not.