All Forum Posts by: Steve Hall

@Gabe Eisenhuth You should partner/JV with someone that knows what they are doing.

@Chris Murdien So you didn't really need help. You already knew the answer... Only a fool would place a bet without seeing their cards first.

PPD doesn't matter to me, and I doubt it matters to you. The price is too high if it doesn't cash flow. And who really cares if the price is "too high"? You just offer what you're willing to pay!

BTW:

• "We don't do that in Texas" is not a great way to negotiate with someone from California.
• Try to give some thought to your post titles: "92 units outside of Houston", I thought maybe Richmond, Sugar Land, or Katy... not California!

@Charlotte Dunford

We're 10+ years into a recovery. Every investor knows that the stock market runs in cycles and it doesn't take a genius to figure out that the current bull market is about to end.

Business is booming, money is flowing, and every investor knows that real estate is a great place to park cash in preparation for the problems coming in the stock market.

The more money flowing into real estate, the more competition there is, the more prices are going to be driven up. Primary markets are over saturated for many reasons:

• More buyers; more sellers; more competition.
• More properties with higher maintenance needs allows for instant equity for buyer's. (Most new complexes are being built in secondary and tertiary markets.)
• Faster appreciation. (Perfect for syndicators looking to flip larger properties.)
• Fannie Mae & Freddie Mac Small Balance Loans have higher LTV (80%) on primary markets. (Thus forcing investors who care about COCR to buy in the primary markets.)

Without a crystal ball, no one knows whether 2019 is the year, or maybe it will be 2022. If we could make it to 2024, we would break a record for longest bull market in history, so I doubt that's going to happen.

If you're highly leveraged, or you'd doing fix and flips, BRRRR or syndication, it's time to start planning for what happens when the sh*t hits the fan.

@Chris Murdien My guess is that the seller thinks you are a tire kicker and she is asking you to throw down some hard money to prove that you are serious. Your delay in response to her request is showing that you are not a serious buyer by the hour. (or at the very least, that you don't know how to negotiate.)

There are a lot more questions that @Nick Rutkowski should have asked. In fact, I am not sure why the price even matters. My first question to you would have been: "Have you done as much due diligence as you can to find out if it's a good deal?". Do you have a T-12 P&L and RR? Did you ask for copies of leases? (even though you probably won't get them before an offer.) Did you verify taxes and insurance? Is it in a flood zone? Is it properly zoned? Any liens or back taxes? How's the vacancy rate? Is there any deferred maintenance? Did you drive by?

My next question would have been: "Do you have everything lined up (down payment & lenders) so that you can actually purchase the property?"

If the answer to both questions is yes, then negotiate with her! Tell her you will put down $x as soft money, and in x days it will go hard. Write it into your contract. Make sure that you walk ALL 92 units. Make sure that if she needs to get you documents, like bank statements, or receipts, that the contract specifies that she must do that in x days (or your hard money down payment requirement will be extended) Just CYA (cover your ***)

Hope that helps...

@Mike Abramov I own a .com eCommerce business with an 800 number. Trust me when I say that nobody remembers your web site address and nobody remembers your phone number. They see those things in an email signature, on a business card, in an advertisement, or in an online search engine.

Just try to keep your new domain name as short as possible. Nobody wants to send an email to someone at webuytheugliesthousesintheentirestate.com

When you advertise, use capitals to make it readable: http://WeBuyTheUgliestHousesInTheEntireState.com is much easier to read; email addresses and domain names are case-insensitive.

I always recommend to people that create LLC's for businesses that they first check to see if the domain name is available, then check the state registration database to see if the name is available, then register both!

Just another of the 50 threads a day from those that don't know how to use the search feature... ;)

You need Quickbooks Desktop version. Buy your software! It's a business expense...

@Mischa Talokonnikoff We need a lot more information here to give you any kind of useful advice.

Why won't your mom pay rent? 

How old is your mom? (65 vs 95 makes a big difference in strategy)

Why are you tying up $300k in a home for your mom? If my mom wasn't going to pay rent, I'd put her in a $100k condo or townhome, or more likely a mobile home park.

Why is your mom's house not in an LLC or in her name? If she gets sued, you and your fiance could lose your home, and if you get sued, the creditors could take your mom's home! Also, if your mom's house was in her name, she could claim homestead, saving taxes.

How much do you have liquid without the HELOCs?

And the most important question... what does you fiancé think?

Short answer: yes, they can. A Florida Sheriff's auction is very similar to a foreclosure auction. The only difference is that the Sheriff's office clerks don't know what they are doing, and if you ask them questions, they will likely ignore you, give you incorrect information, or refer you to their attorney (who will definitely ignore you.)

Auctions are not for the uneducated or inexperienced. You MUST do a title search.

You should read this: https://easytitlesearch.com/which-liens-survive-a-florida-foreclosure/

It has great information, such as: "...judgment liens, unpaid homeowner association or condominium assessments, liens for city or county services, and even mechanic’s liens by unpaid contractors who started on their jobs prior to the mortgage lien’s recordation all could survive the foreclosure sale and become the new purchaser’s responsibility."

Regarding your property tax question: If you buy a distressed property in Florida, the county tax assessor will "assume" that you are going to fix up, and the year after you purchase it, your tax assessment will automatically be adjusted to be the same as the surrounding (similar) homes.

Thanks for posting the lease @Lyle Cooper and thank you for the vote on my previous response. 

Try reading 23 D, paragraphs 1-5 of your lease agreement. You really should know and understand your own lease.

Based on what I just read in your lease, I would change my advice to you. First, be sure to get the tenant to write down his intentions and present them to you in writing. (In other words, is he contemplating breaking the lease, or has he already done it?)

If he breaks the lease, I would inform the tenant, in writing, that you "accept the tenant's offer of 2 months additional rent, paid in advance on move-out day, as escrow for breach of lease agreement, in accordance with Paragraph 23 D". You should be careful with your wording so as to not allow the security deposit to be part of the deal. LMR (last month rent), if held in escrow, can be applied to the lease-breaking payment, that way the tenant only has to go out-of-pocket for 1 additional month's rent. 

In your OP, you said that "My fear is I go over the 2 month period and I start losing money." That is not your biggest fear. This tenant could VERY EASILY just say "screw you" and leave on April 30th, paying you nothing. Sure you could keep his last month's rent that you have in escrow (which would cover May) but you are required by law to return his security deposit. If this happens, you have only 31 days to re-rent before you start losing money... a lot sooner than you thought!