All Forum Posts by: Steve Burt

 So in states that lack it, it really makes sense to lever up because you are essentially getting free leverage as there are no consequences for foreclosure if your personal assets cannot be touched? (granted I assume your credit is still at risk)

Hi, I have been researching this online but have not found a definitive answer. I will try to keep the question simple though I think there are a couple of scenarios (whether you own a rental via an LLC or without one, whether you use conventional or FHA loans).

If you purchase a duplex, with let's say 10% down. You make payments for a couple of years, but then a recession happens and the value of the home is much less than the remaining mortgage, so you opt for foreclosure. Could the bank pursue other money (IRA, 401k, taxable brokerage account, savings, checking etc) to try and recoup what they owe? Would that very by state, I am in Texas.

Additionally would this foreclosure ruin your credit even if the property is in an LLC?

Thanks

Have a friend who lives in the DFW area. They came home to their dog very sick and unable to breathe and eventually they found themselves in the same predicament. Eventually they realized that construction fumes from the unit below them (supposedly fumes from coating bath tub surfaces) were coming up into their unit. They had to move to a hotel (apartment complex is denying any issues and will not reimburse). Now they are looking to break the lease however the landlord won't let them out. Anyone have any advice?

@RonanM. That is great advice about the EM. Is your offer subject to change based on what comes out in the DD (i.e. foundation damage, rent rolls seem fake etc)?

That is what I figured. The agent who responded on the web said that the seller's agent would not share the details which is strange. I think the deal is too suspicious to continue with but I will try another agent just as an experiment to see what happens.

I recently came across a deal on Redfin for a multifamily and reached out to the agent.  I asked them for

1) Rent rolls and agreements 

2) Historical costs and maintenance expenses 

3) Additional pictures of the property (only one exterior photo was provided) 

The agent wrote back and said that none of these were available and the seller would only tour after a serious offer, but the tenants had lived in the fourplex for 10 years (probably bs). They also did give me the charged rent and it was probably half of what the market is charging now (though with no pictures the place could be a dive)

 Is this a common experience when dealing with Redfin and/or purchasing rental properties? The math at the average rent for the zip and the asking price looked pretty attractive but I am put off by such a closed lip owner.

I am finally in a position to start reviewing and touring properties, and I am focused on the multifamily space. I have noticed agents I contact typically push to view properties almost immediately before surrendering any property information. To me, it is far more important to see rent rolls and utility bills etc, to make sure the numbers make sense before viewing the property. This is far more efficient for analyzing a high number of properties in a hot market.  Do other people have this issue?

@Levi Painter, If you have great pictures and its a nicer property, craigslist will likely really help. If its a university town with business presence (for internships etc) consider the 6 mo leases then post it to facebook groups, or partner with businesses posting internships to get summer tenants.  At my school people used to walk in before class and hand out flyers to all the kids in class. Pick a morning one so you get students who are slightly more likely to take school seriously.

College tenants will probably run the gamut in how much they care about their living conditions. Just drive around, college areas are likely to have lux apartments that are likely backed by parental guarantees and a few blocks away will be shanty towns held up by hopes and dreams.

Hope there is a follow up to this story. This seems like wire fraud and you should get the feds involved.