All Forum Posts by: Nick L.

Charging water back to tenants is usually a lot cheaper than submetering. You can charge by number of occupants, number of bedrooms or an even split.

@David Gimenez @Chris Martin

When I wrote about a blanket commercial note, I was thinking they were all in one development. I agree with Chris, I can't see it happening across multiple developments.

If it were me, I would think about selling the whole lot or at least the ones in scattered developments. The power and potential for abuse in HOAs would make me nervous to be a small minority owner. Especially in FL, which if I remember correctly is an HOA super-lien state. A development with a majority of OOs is going to be incentivized to act against landlords in order to make it GSE-conforming like Chris said.

If you don't want to do that, then keep them in your personal name and take out one or more individual GSE-backed investment notes (if the development is eligible) or portfolio notes (if not).

Sounds interesting. Specifically Hubzu or other sites too?

@David Gimenez I don't get your strategy. If you're looking to hold them for the long term wouldn't you want to group them together under a single LLC with a blanket commercial mortgage or line of credit?

Are these condos all in the same complex? How many units are there in the total complex? Are most of the other units held by investors or owner occupants?

I am a big fan of fractured condos when done right. They can be dramatically undervalued because residential lenders run away screaming. But if the association is investor-friendly they can be very profitable. 

@Karen Alexander There is an excellent conversation about that elsewhere on the site right now: https://www.biggerpockets.com/forums/48/topics/277083-sf-bay-area-economic-and-re-update-ongoing

@Hernan Guelman That deal sounds like a dog and Austin is a tough market. But what you want is not impossible.

I just picked up some units in 78704 that will have an 8%+ CoC ROI (on a conservative calculation) after a little rehab and management work. Talk to @Carrie Hiner or @Adrian Salas.

@Kevin Cox I figured out an answer, more or less. I ended up winning a very similar auction on a different site, also a post-foreclosure. The T&Cs were very similar - if you get your own title insurance you can have a Special Warranty Deed, otherwise you get a Quit Claim Deed. 

When it actually came down to the final contract they sent me after the auction, the only thing it promised me was a QCD. No mention of a SWD. My title company agreed to give me insurance as long as the chain of title showed the seller as owner. Other title companies are not so accommodating and may refuse insurance on a QCD.

Apparently it is common for banks not to record a Sheriff Deed from a foreclosure until they are ready to sell the property. As a buyer you have to take it on faith that the seller can and will get the SD recorded properly in time for your closing. There are nightmare scenarios where this gets held up for months or indefinitely, meanwhile you are out your earnest money and have no idea if or when you may get the property. 

Luckily in my case the SD was recorded a couple of days after I won the auction so I was ok to move forward. Otherwise I would not have signed the contract.

@Eric Hathway What does the zoning allow in terms of usage and density? Are there any easements or other restrictions that might get in the way?

If you're not sure of the answers it might be worth dropping a few hundred bucks on an engineer's report. I did that recently for a property and it clearly showed the highest and best use within the existing framework.

@Alan Wolkov No. It is not at all safe to buy at a sheriff sale without knowing the position of all liens and any past due amounts. A title company can help you before the sale by telling you this information.

Have you already bought a property at auction? If it has senior liens or huge back taxes, then yes you should engage a local attorney. If it just has regular outstanding amounts such as a few months of back taxes and utilities, you should just pay the relevant authority. 

Can you describe your situation some more?

@Simon Cox The HUD FHA loan I mentioned is purely for commercial properties. It's not like a residential 1-4 unit note where you may be required to live there. In fact one of the nice features of that program is that it's non-recourse, so the lender has little interest in your personal circumstances.

I do hear you about wanting to exit in 3-5 years though - that might indicate regular commercial bank financing is better.

Why do you feel other people have passed this opportunity over? Or do you have inside knowledge of the opportunity?