All Forum Posts by: Steve Morris

1. What is the fastest closing a tittle company can do.

You can easily do it, IF THE DEAL IS CLEAN, within 2-3 days.

2. Does it matter if the seller has a loan on the property? What if she owes more than the property is selling for. Am I going to be responsible for the rest?

I don't know how they do it in LA, but in OR, debt creates a lien on the property.  As a lien holder, they need to sign off on a sale at close.  Excepting foreclosures/short sales, they usually do not want to negotiate.  If you're buying for less than debt otherwise, someone will have to pay off the bank is you want their blessing.  Be prepared to wait if you want to negotiate with the bank.

3. I have bought one property for sale by owner and didn’t have any issues. Any legal issues that I need to be careful with?

Go thru escrow and get a title report to make sure there are no clouds.  If it is a lot of land, out in the country, I'd pay for the difference  (seller usually pays for standard title) and get extended title which includes a survey of lot lines and looks for easements.  UNLESS you're a professional inspector, hire one to look for mechanical issues BEFORE you close.

4. Of course I will get title insurance. Is there any other heads up anyone can give me?

See above.  Mya be worth hiring a RE atty to review the deal especially if it has issues.

Again, I"m in Oregon and Lousiana has it's own laws different from the other 49 states.

Where do you think most of the Passive Investment comes from? Non-professionals?

Sure.  Get a lot of guys that daddy left them some money and they want a tax-sheltered return.  Syndicators rolls them all up and they buy a large apartment managed by the syndicator.  They want a regular check and half don't even show up on the asset mgmt updates.

As far as the original topic, I run into sales guys with good 1099s and they buy apartments.  Nice consistent income that's tax-sheltered and they hire a manager to make it passive on their part.  Then again, I run into doctors/dentists that invest like that and most are not getting the max return (being kind here) they could by being passive.

"unless you own the property outright."

By that you mean no debt?

I think that's foolish, if you can borrow money at 3.5% and not earn >3.5% on that same money, you bought bad.

Add in that as debt goes along it gets smaller and (assuming at a min your property doesn't' lose value) you gain equity with tax deferral.

Professionals are NOT real estate Investors. Am I wrong

Am CRE Broker that does apartments. I run into a lot of brokers that own rentals. Mostly from seeing stuff come on market and realize it's a good value.

Depends if you did that kind of stuff before.

My biggest issue would be the roof "wave", that's a marker for moisture invasion and more.  Get a quote.

"In your opinion is it worth it to spend the $1000 to fix everything before the house even hits the market?"

If that's all it is - YES.  A clean well-staged house will make up a multiple of $1000 plus makes it quicker to move.

I haven't seen the house personally  - My question is "is it worth it?"

Advice for the future, hire a local home inspector in the future BEFORE YOU BID.  

One $20K expense (reskin interior, moisture damage, HVAC, foundation issues) and you've got an average deal or worse.

"What are the pros and cons of accepting section 8? Any pitfalls, do’s or don’t? I don’t know what I am getting into."

In Oregon, you can't disqualify someone based on the source (hopefully legal) income to pay rent.  Sec 8 vouchers included.

I'd go thru the same qualification you do on everyone else and then make your decision based on credit and other reports you get.

BS/MS in EE.

Am apartment broker and owner.   Nothing wrong with engineers, but sometimes you can over-analyze a property.

However, return and risk are proportional.  Engineer's main problem is not being able to make decisions while trying to quantify risk with some certainty.

I wish you could buy a property with ZERO risk, but you can't.  To get a good price/deal, you need to make some assumptions on value-add and how it'll affect your future returns.

If you find someone that knows the future 100%, let me know I'd like to ask a couple of questions.

"Ive been looking into investing into an apartment building and I don't know where to find the deals. Ive tried Loopnet.com and other websites but cant seem to find anything good. Does anybody have recommendations? Thanks! "

Look up the commercial brokers in town.  I'd lean towards one that specializes in apartments and has some headcount, especially brokers that are calling a lot.  Meet them if you can and give them some details like how much down, stuff you do/don't like about properties in general and see if you're comfortable with them.  Then I think I'd call once a week to see how earnest they are.

Nothing against stuff on WEBsites, but most brokers know a good deal and prob have a buyer lined up already so they can get/keep both sides of the commission.  If it is on a WEBsite and good (whatever your standard), act quick.  

If it sits and gets shop-worn there is an issue (usually pricing).  If its been out there a while and seems to have potential, the seller does want to sell, so I'd be more inclined to try a low-ball if you can show legitimacy.