All Forum Posts by: Steve Morris

Meant - you may want an extended title which includes an ALTA survey and inspection by a surveyor.

Yeah, offering less-than-asking is tough. You have to offer enough, they take you seriously (hence make your seriousness known by POF and experience). However, as noted, in a hot market you may be one of many which means property will prob go for asking (if your bonafides look better than others) or more.

Am a broker and also a landlord.  You need to keep the relationship strictly business.  You have to follow a lot of rules (even in IA) and you screw up one thing, go to court and you'll prob lose against a tenant.  Whereas, judges give tenants a lot more "latitude".

If it helps, the one thing I learned right away when talking to a tenant - Do not say "I'M SORRY".  They just sense when you say that you can be pushed :)

Wow, if your second deal is a 24-unit in Marin, congratulations!!!

Do you have a broker or atty on your side?  If not, I'd hire someone that can explain the sales agreement and your responsibilities and timelines.

In OR on my apt deals, have 4 contingencies and I go with std/usual since by contingency I mean an item you need to affirmatively waive (if its well-written) since most SFR contracts assume you're OK unless you object:

1) Title (about 30 days after M/A) - You should get a prelim title report from escrow.  It'll list all the exceptions and recordings on the e.  You need to go thru these one by one since some will be removed at close (e.g. prop tax lien) and some survive (e.g. a standing easement).  Ultimately YOU need to decide, not title even if they advise you.  If it's a lot of land, you may want an ended title which includes an ALTA survey and inspection by a surveyor.

2) Books/Records (30 days) - Get the REAL rent roll and recent income & expense.  See if it is even close to what you want and what the broker (if involved) claimed.  If not, then you may want to retrade (request a price adjust) in return for waiving this.

3) Physical inspection (30 days) - Get someone that knows (like a licensed fee inspector) and go thru EACH unit and common areas. You're looking for possible repairs whether expensed (like dumpy apts needing rehab on a turn) or CapEx (roof has <5 years, siding has moisture invasion, leaky plumbing, paving is starting to break up). Again, if a lot, you may want a retrade to waive this contingency

4) Financing (90 days) - As of today, you really should have a "property must meet or beat appraisal" clause in your offer. This is the biggest heartburn on the amount financed since it goes directly to LTV. Then you'll need to meet all the other lender underwriting issues like personally qualifying and the property qualifying.

In any case, you haven't been there do get a good impartial (i.e. not a dual-agent) broker or atty.  Only issue is an atty knows contracts and gets items 1) and 4), but may not understand running an apt.  Also some attys spend 95% of their time worrying about the 0.01% eventualities (an over-stating) and may kill a deal.  Unfortunately, to get a good return, you need to assume some risk.

"So I can't help but think that the appraiser may have had an off day."

Well, if its a residence not generating income, you're pretty much at their mercy, UNLESS you can come up with real comp sales that get you to where you want.  If they're MAI, they should make a pretty good case in the appraisal, so understand how they got to the 160K number.  However, I think better comp sales is about it.

"I need some help with value on my duplex. I am protesting my taxes with our county. Whats the best way to value a property? And any help protesting taxes!! Thanks"

In OR/WA.  Get an atty with experience or there are guys that specialize in appeals and sit down and figure your odds.  A lot of the non-attorneys used to work for the tax appraisal section of the local govt.

In general, you can try, but its govt, they can out-wait you and make it hard, so be prepared.

"With that said, when selecting a syndicated investment, you really are putting a lot of trust into the syndicator."

I guess you have to trust them, but you need to know enough to read and understand the investment.

In 2009 before the crash, people couldn't find enough TICs to throw money into.  So a lot of bad/weak ideas got funded and some games played:

1) Actually sold raw land as a TIC. You get no depreciation and your only income was appreciation.

2) Taking in $12M to buy a $10M property.  Then using the excess $2M to pay back shareholders while the property was spinning up.

3) Am not crazy about interest-only loans since a good way to build equity (in case price appreciation doesn't meet your standards) is debt reduction.

4) Some leased buildings were really sold on pretty shaky leases and neglecting the $/SqFt.  I've seen a coffee cart (250  sqft) with a $2K/month least being pushed at $2M.  You're paying $8000/SqFt and getting someone to pay $2000/month or $100/sqft/year on a lease is pretty breath-taking.  You've always have to make allowance for a tenant leaving.

5) Other thing with some TICs is STNL deals.  Your whole cash flow is dependent on the tenant staying (which is why apartments are diametrically opposite).  That's the problem with single-tenants is you're walking a tight rope.  They don't do well and they leave, they do real well and they want to move to bigger.

6) There is a certain retail business (actual company) that builds its own store along with a strip mall and then sells that.  However, they write the lease for their business and give themselves rent holidays down the road.  The RE is income for them in a sale-leaseback arrangement.

"My question is, can I help get her qualified for section 8, and also try to qualify the home as section 8 at the same time?"

Welll, Sec8 is just vouchers from the local housing authority.  You can help I guess, but she'll have to get qualified first IF they have vouchers available.

As far as $1K/month, that's up to the caseworker to OK. If it's FMV and she qualifies - Great. I don't see a problem since you''re more than arms length transaction.

Forgot, also realize that guys like AirBnB/Vacasa want about 50% of your income.

Do the math.  Put the neighborhood into AirBnB and see what your potential competition is getting.  Then assume you can lease it out for 30%-50% of the time.