All Forum Posts by: Patsy Waldron

I need a GC for a rather large project in Painesville, OH. Do you have someone you can recommend? Please post here or PM me!

Thanks in advance!!

@Jameson Sullivan

Your initial post mentions $20K and $18K as the two price points. I did not realize that there was a $6K option in play.... But the principle remains the same, don't play around with structural issues! Just pay the money to get it fixed right, and you won't need to worry about it anymore! Especially in a 115-yr-old house. It hurts to put money into something "hidden" that won't bring you more $$ down the road, but as with anything preventative measures, it's the $$ it's saving you by the worst-case scenario NOT happening (i.e. not selling the house, having the issue resurface after selling and the buyer suing you, etc) that matters.

Good luck with your rehab! I admire you for tackling a major rehab as your first project. I don't plan on taking on any projects involving structural issues until I have succeeded at the more pedestrian cosmetic stuff! ;-)

@James MacKinnon

"financing a real estate deal and then earning a return after the property sells"

Do you mean financing someone else's flip? This happens all the time.... Usually through a private lending platform as an intermediary, i.e. a company that takes your money and lends it to people who apply to them for financing. Some even allow you to pick the project. But as with all RE transactions and all loan transactions, you are taking a risk with the person and with the project. I guess it all comes down to how much you trust the lending platform to vet applicants adequately to minimize your risk.

I think the way to do this is a wrap-around mortgage, where the owner holds the tenant's mortgage while paying off his/her own mortgage. This is the kind of thing that you want an experienced attorney writing up so that that everyone is protected. Search BP for wrap-around and you'll find a ton of info as well as people who have done it and are experienced in structuring it.

I don't know how "large scale" you want to go with this.... But I have read that after mortgage #4 with 5% down, your lender will move you to 20-25% down on properties 5 and above. In other words, you can only qualify for 4 low down payment owner-occupant loans. 

Difficult to see how that alone would benefit a partner, since they can't loan you the down payment (presumably the "partner" part). Your lender will want to know that the down payment is really your money (or a gift, I believe- but not a loan or a partnering agreement).

I am a little confused about the numbers you posted above. You originally posted the house for $1????? I can imagine why you wouldn't get many offers.... When you raised the asking price, why did you settle on $188K when you really wanted $510K??? Seems that people who are looking for houses in the $500K range would filter out homes that are much cheaper...

The living area, dining room and kitchen look great! Your staging really helps the place look nice. But the bathroom is really dated, and I imagine that people who are paying $500K won't want a bathroom from the 70s, even in Cali...

TENANTS:

- Ask to see their applications and leases. You and your property manager need to know as much about your prospective tenants' background as possible.

- Ask the sellers for rent deposit statements for the past 2 years if possible. You will want to know if any of the tenants has ever paid late (and heaven forbid a pattern of late payments.... Get them out before you take possession!) This will only tell you anything if tenants paid by check or online, not if they paid cash. Then you only have the sellers' word! But whatever the method of payment, you want to check that the correct total rent amount was deposited every month. If not, ask why.

Maintenance man- Not sure about this one... Maybe get a price list, and ask your property manager to compare to market rates for the area. And a list of what things he has fixed over the years, so that if something goes wrong, your PM will know who to blame. :) J/K, but sometimes someone who has fixed something in the past is the best person to call because they know what is usually wrong with this or that, and can come jiggle it back to life (instead of paying a lot of money to a new maintenance person who will charge you just for finding and diagnosing the problem... And then to fix it!)

I am not sure what you mean by getting your money back from something like this.... Fixing a structural issue won't get you additional dollars when you resell, but it will ensure that you DO sell as opposed to having a house that no one wants because structural issues were not done right! If you go with a low-cost half-measure, when you sell, the buyer's home inspector will definitely notice and point this out and your buyer will be out of there faster than you can say "wait".... So put the money in to secure the foundation/house and save elsewhere. 

Do your research on each method and find out which one is the best option relative to cost, and go for that. "75-year transferable warranty" sounds pretty good...

"When I die, I want to die having lived a life full of cliff jumping and sky diving, not painting or laying tile."

LOLOLOL