All Forum Posts by: Nathan Grabau

This won't be an issue, see page 5 of this document: 

https://www.hud.gov/sites/docu...

If you want to make sure you are super covered you could have the mortgage and title just be in your name, but this is not that necessary. I would also be mindful of the FHA's 100 mile rule for getting a second FHA loan, if you are on the loan for property number 1.

I would tell them what is going on and tell them you will give them an update before closing with where the eviction is. I have updated closing statements hours before closing for things like this before. Worse thing you can do here is try to oversimplify a complex situation and get it wrong. That really isn't that bad, but I would just communicate with the closing entity what is going on and ask how they would like to have it handled. 

If you are within 20% on all of these, it shouldn't make or break the deal. This is how I would handle each of these:

Insurance: I would use Zillow's number for stage one and then you can confirm with an insurance agent once you are under contract in due diligence. 

Water: You can ask what the owners water bills have been like. If it is a single family home, your tenant should pay this.

Garbage: If you are going private, you should be able to call a company and ask what they recommend for a four plex and ask what that costs. If it is a single family home, your tenant should pay this. 

Electric and gas: I would not buy a property that's electric was not separately metered, so this should be 0 outside of vacancy loss or common areas where it will be low. 

HOA Fees: This should be listed in the listing. If looking off market, l

Lawn/ Snow: I would call a local landscaping company and ask what they charge. I personally try to minimize grass areas(this helps with water too). 

I would just call or email your municipality. This is either a mistake or they can explain the reason for this. Has this happened on other bills from this municipality, or is this your first bill/ the first time they have done this? 

This is not legal advice, but this is what I would do. I would start by going back to the county and asking them how they would like to handle this. There are likely filing requirements to keep the lien in place on your property that the mortgage company has not done that should make this relatively simple to have removed. Especially because if the county reaches out to the mortgage company, the mortgage company lacks any record of the note. This might go better if you can get a "we have no record of this mortgage" in writing from the mortgage company before going to the county. 

This could turn into a lawyer situation too, but it seems pretty simple that the lawyer sends a demand letter to the mortgage company or county, says remove the lien. No response, pretty straightforward injunction to remove the lien when no one shows up to defend their lien on your property. 

So in order to sub divide the water, you would likely need to replumb the whole house or at least a lot of it. The way the house was likely plumbed was on one line for the water, so if you have 2 kitchens or bathrooms that are back to back, they most likely have one water line feeding them, so you would need to run new water separately to each unit. Then you likely pay a "tap fee" to the city for the new lines, even though the net water usage is the same. These can be expensive, like tens of thousands of dollars each expense. 

In terms of trash, you can do a charge back. You could even do a charge back for water too. The key is this would have to be a provision in the lease, so you would add a $25 or $50 utility charge back, that I would say you set at a flat rate. I would not do this, as you are essentially just increasing rent and going to increase turnover, and then tenants are going to complain to you about how much water they use or do not use and why they should not be charged for water when Billy in unit 3 takes 2 hour showers. 

I have a 6 plex, that about one sixth of my rent goes towards water and trash every month. This sucks, but if it is not sub metered when you buy it, you have to include it in your numbers.

Do you have any landscaping like grass that requires lots of water? You could reduce your water cost by turning that area into rock or mulch? 

Have you confirmed with the county assessor or entity actually in charge of this that this is an issue? Online maps, and even in some cases city plats can be off. I had a dispute over a fence with a neighbor behind one of my properties just to find out that each of us thought a blown over fence was on the other's property line because there were 7 feet that the original draws and county assessor missed in their GIS  between our two property line. Surveyors have a job because county GISs leave a lot to be desired sometime. 

I would contact a lender to talk about these programs. For the most part, these programs tend to only require repayment if you sell the home and have no paid them back yet, so they carry a low level of risk for you as the buyer. You want to be careful about how aggressively you lever your first property. If you have to pay them back, and do not have any cash on hand, and a furnace breaks or a roof has to be replaced, that can be really hard to absorb. If you are forced to sell and have to pay back the down payment assistance program there is not that much room. 

This should not be an issue. I would contact the company that handled the 1031 for you to confirm this is the case. 

I would buy now. The fed hike is already priced into the mortgage market, unless they substantially surprise to the high side. 

I am also in the camp that there is a lot more "potential energy" for markets to spring to the high side than the downside. When I talk with buyers, there are a lot that are waiting to see what is going to happen and are going to be back on the hunt in the spring. (they gave up and signed year leases march-may of 2022). There is also a lot of talk surrounding the idea that the fed is over tightening and might be forced to loosen aggressively bringing rates back down in the back half of 23. 

To answer the specific timing of year question, it is now. Winter is the seasonally slowest time of the year in most markets when buyers can get the best deals.