All Forum Posts by: Bart H.

@Al Pat @Kelly I. No I I didn't point it out I just had a quick conversation over the phone about purchasing a second home and my lender suggested we could do another owner occupy loan after two years. I then said that I thought it was one year and he said no it's two. At that point I didn't go into it any further with the lender I just looked over all my paperwork to see if it said anything about two years. And it doesn't.

I've been trying to purchase property in TX.  I spend the time to research and find a "reasonable" investment, read the disclosures, then begin the contract, offer (all cash), and earnest money scenario. It ends after the inspection reveals problems (and they are not cheap, minor problems like water heaters).  Then the seller will not fix it because it's big money.  In TX the property owner does NOT return my $100.00 "earnest money" off after an offer fails; they are NOT required to refund it!  Of course I get my 10% back from the title company, but it's a PITA to do this and lose money at the same time.  

If the HVAC doesn't work right the owner, living in the home, obviously knows.  If the electrical panel is substandard (dangerous) and they are the one who hard wired an extension cord in the attic while cutting through a major purlin holding up the roof, and the garage door doesn't open due to damage (when they hit it with the car?), the owner obviously knows that as well.  I could go on and on with more and better examples but you get the picture.  This time I decided after I pay for an expensive inspection and discover undisclosed, expensive problems the owner won't fix the owner gets a copy of the report via delivery confirmation. In most states, including TX, the owner must disclose the inspection to future buyers, by law, so he/she loses and the future buyer gets the benefit of my hard earned money. 

This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection.  Unbelievably (or quite believably in TX) the RE agents (sellers and mine) refused to fill out the TREC contract with the sellers contact information -- they wouldn't fill it in and I spent all day stating you can't leave boxes in a contract blank (special kind of stupid class 101) and expect someone to sign it.  I was professional and polite but explained any attorney in the world would tell me not to sign it.  The "stall" from BOTH agents began. At close of business I moved on and felt blessed I didn't waste more time and money.  Obviously my agent didn't have my best interests in mind (that whole ethics and doesn't have any discussion).  She obviously disclosed that information to the selling agent then they conspired (I'll concede to providing me with "misinformation").  Both stated I should sign a contract with blank/missing information because it's filled in "later" by the listing agent (I'm laughing now but it wasn't funny earlier).  I explained the contract is between buyer and seller, not the agents!  After three attempts I'm wondering if this is SOP in TX.

Does anyone have any tips that will save time and money when buying property in TX?  If a seller is required by law to disclose to every future buyer what is found during the inspection, I'm struggling to understand why, in TX, I have consistently experienced this problem. I've purchased property in many states and TX seems to see this as everyday business.  I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice? Certainly another waste of my time and money filing a report (the whole bizarre negotiation is in writing though, they aren't shy about it).  There must be a better way to offer, negotiate and buy in TX but I can't see it, duh!

@Nina Hayden: The place is very close to San Jacinto and N Carroll Ave. 

My question is would you rather own the home or property outright with No mortgage or would you rather have a mortgage

Hello BP!  I have been lurking on this site for a couple of years and have enjoyed reading the various posts and listening to the podcasts, along with reading books and researching online.  Now that I'm finished with grad school, I'm ready to take action and jump into getting involved with real estate.  I'm interested in starting out with assigning contracts while I'm continuing to learn other exit strategies.  I'd really like to find a mentor who is really knowledgable about the Dallas area and willing to work with a newbie like me.  I know many BP members discourage paying for training when there is so much here for free.  True, there is a wealth of information here, but for someone like me who works a busy full-time job and does not have alot of extra time, it can be overwhelming.  It requires hours and hours of reading various posts on the site to try to distinguish the smart and good advice and recommendations from the bad advice.  It would just be more helpful to me to have a succinct book, training program or mentor that could help put me on a track to begin the business quickly.  I hope this makes sense.

I thought I had finally found an answer- there is a local investor here who has probably one of the most comprehensive training programs I've seen as far as the content, contacts and help provided to students.  I was informed yesterday, however, that it costs $10K for the 6-month program, which I definitely do not have to spend. Are there any other more reasonable mentors (in DFW) or training programs anyone would recommend?  Thanks for any suggestions and I look forward to connecting with more people on the site! :)

Originally posted by @Jason Hirko:

Originally posted by @Minh Le:

@Jason Hirko But my original question is, would Seller be able to take on another contract, if the current contract/escrow is not closed?

 Because there is no contract. Contract expired last week. Seller is released from the previous contract for failure of buyer to perform. Is your realtor involved?

 I guess the better question would be, would any Title Company be able to close on the new offer while my current Escrow/contract is not yet closed? From researching, all signs point to "no", so I wanted to get confirmation from people who have had this experience.

First, I do realize I probably made a huge mistake in purchasing a home without being able to see it in person. Yet, when your in a different State and trying to sell your home, and you must rely on the contract that you have made with a Realtor you have spoken to on the phone and a home inspector, your choices seem limited. Anyway, the home was advertised as 1400 sq ft of livable space. Which I asked repeatedly if this was so to the Agent and was told yes. The old carport had been converted into an addition and was now heated and cooled and considered livable space. Within day's upon arrival, I found that the vent to this addition is not connected to the HVAC. Estimated cost to have this done, is anywhere between $5,500 to $10,000. In addition to that, where this addition was erected to the main structure, it is pulling away. This was not noted in the inspection report. I have contacted both the Agent and the Inspect (which was recommended by the Realtor) and both replied it was not their problem. In addition to that I have also found that there have never been any permit's issued for anything for this home since this home was built, which per the building commission, makes the addition an illegal addition. So in short, even though my Agent kept telling me that I was getting 1400 sq ft of living space and I questioned it due to the appraisal said something different, I have about 1,000 sq ft with the other that may fall off. Not sure what I can do about it?

Thank you @Seth Lipper for the response. A little background: This will be my first investment property, so I don't want to take on too much risk. I knew that I wanted to purchase in Texas ( I live in MA), but I didn't know where. I found properties in Killeen with much more favorable cash flow numbers but there is more risk of vacancy and other things. So I decided to play it safe and noticed that Austin is a very popular AirBnb destination, so there's always that option as plan B. Again, leaning toward a safer investment over cash returns. 

That being said, sticking with Austin has made me stray far from my original criteria. So I guess the question is, has anyone purchased a turn key property in Austin that meets the 1% rule and I should keep looking or is a .7% rent ratio and 4% cap rate okay for real estate around the UT Austin campus?

The zillow cost calculator shows a break even cash flow, neither negative or positive. 

Criteria aside, I think being in a prime location, if it covers expenses and pays itself off, it's pretty good. Some may think those are low standards though :D

Hello, I've been searching rental properties in Austin for the past 2 weeks and did not find anything that passes the 1% rule or has a cap rate over 7%. It's more like half of that.

If you were to find a property with a .7% rent ratio and a 4% cap rate, would you make an exception because it's a prime location, if the gross rent covers expenses? I should also note that these are turn key and require no repairs. I want to offer less than the asking price to help the numbers but at best it will bump it to .8% rent ratio and cap rate I don't see it going past 5%. 

The book Millionaire Real Estate Investor says Criteria is non negotiable. But in this hot seller's market, I find it impossible to find something in inventory that passes.

Thank you!