All Forum Posts by: Patsy Waldron

FHA loans is for owner-occupants. You will sign an affidavit at closing certifying that you intend to occupy the unit. If you don't (and are already showing intent NOT to), that is called mortgage fraud, and I don't suggest you do it. Find another way to purchase the multi-family while maintaining your honesty and staying on the right side of the law.

If the property is breaking even without taking into account any maintenance, then it could actually cost you in the future. You need to think about the major potential repairs- roof, HVAC, water heater, etc. How old are these components, and might they need to be repaired or replaced in the next few years? That may be a reason to consider selling now, while the market is strong (even though you would be selling for less than what you bought for). 

On the other hand.... Your tenant is paying down that mortgage and building equity for you. 4% is pretty low as far as interest rates go, and you won't be getting that anymore. 

The $240,000 can be invested much more profitably than paying off the house (talk about dead equity!)- you could buy a small multi-family building that would cash flow very nicely with this amount of money. Then you'd end up with cash flow AND two properties instead of one!

@Axel Ragnarsson- Sorry, I didn't mean to hijack your thread! 

@Account Closed were talking about things like GFCI outlets... I think we both made it clear in our posts that the question is about serious issues. I don't think there are very many home buyers who walk away from the home of their dreams over GFCI outlets- if anything, what I have observed is quite the opposite! People glossing over serious issues because this is their dream home or they are tired of looking or they have some sort of emotional attachment to the area.

@Steve Milford

Wow, what a horror story. Sobering to hear what some people are capable of!

@Elizabeth Nenque

Requests like this are not uncommon- my sister ran into it last year when she was house hunting. In a sellers' market, sellers can request all sorts of things that are purely for their convenience, and buyers are in a tight spot to say no.... If you decide that you are willing to let them stay after you close, you would definitely charge them rent (although one seller did ask my sister for FREE rent for 2 weeks after they closed- crazy!). I am not sure you would have grounds to reduce your offer, though. One month on the market does not seem like much if they have already been in and then fallen out of contract (think of the time for buyers to schedule inspection, negotiate with them based on inspection, etc- easily 10 days to 2 weeks).

It sounds like they have learned their lesson from the one contract that fell through because of the roof, and it's good that they are getting it repaired before they close. I would be a little uncomfortable with the fact that they can't pay the contractor until after they close- if they don't pay him, could the contractor put a lien on YOUR house??

@Sunny Burns

Good call! Your tenants will be grateful. I just hope (with the heater being portable) that no one messes with it or, even worse, "borrows" it!

I am curious why you think it is not appropriate to negotiate purchase price down after the inspection. What exactly is the point of having a professional home inspection if you can't modify the terms of the purchase based on it?

I always thought this was perfectly fine until I came across a realtor a few months ago who balked at asking for a reduction in the purchase price based on something that came up in the inspection report (a safety issue; I let many other items pass which were less serious or which I felt were accounted for in the original, agreed-upon price). I was honestly flabbergasted. He did end up asking for it and we did get the reduction, but I am still puzzled as to why anyone would think an inspection was not grounds enough to renegotiate price (or repairs).

Well, until and unless the husband and wife get on the same page and make up their mind one way or the other, you're just going to be strung along. A master lease really does not carry risk for the seller- you will be paying them and the property remains theirs until you buy outright. And you mentioned that he had some pre-payment penalty if he sells immediately, so this arrangement would help him out in that way, too. In return for being so patient and acccommodating, you get to buy both buildings with a little seller help! Removes the hassle  of finding another buyer and paying realtor fees for the seller!

If master lease and/or seller financing are out, you can try getting a hard money loan and refinancing in a year (numbers would be tight, but if purchase price is right, this is feasible). Or buying one property in the traditional way, with bank financing, and use your equity in it as collateral to buy the next 4-unit (hopefully with some seller financing). 

Reilly Painting and Contracting, in Cleveland Heights. They also do PM.

I know a company right here in Cleveland that does several of these short-term rentals for utility company workers, executive contractors, and even a film crew from California.

It always charges a high deposit and much higher rents than what the rent would be to more usual, long-term tenants.

The owner did not mention any issues with extensive damage, etc, but then he was trying to convince me to turn my property into a short-term rental, so he obviously wouldn't.

I think if you structure the agreement so as to cover any repairs when they leave, you should be okay. The main thing I personally would be concerned about is having adequate parking for all the trucks that are sure to be there if these are construction workers.

 Well, its headquarters are in Columbus, OH, so yes, they do have a branch of two in the state, lol.