All Forum Posts by: Tim Walker

No matter what you are told on here consult an attorney (or two) about the implications of all of this.  Medicaid, other debtors, etc.

Also, the aunt's finances aren't that shaky if she has a $120,000 house she can give away, and your finances aren't that shaky if you just got that huge gift - pay the damned debt.

If he's not willing to pay the mortgage payment on the place he owns and he's had no qualms with letting the legal process take its due course giving him a free ride for a year than he's very quickly going to find a reason to stop paying you.  

If you take him on you will soon be left with no revenue and the added expense of kicking him out.  Good luck collecting on this kind of guy too, you'll be about 32nd in line by the time you get him through the courts.

Make sure it's in your contract somewhere that the leases/pro-rated rents/deposits/other fees transfer to you at closing.  It *should* already be in there, but you would hate to get a bad surprise on any of that.

I don't understand the bit about having a property manager yet wanting to deal with this yourself or posting a notice yourself.  Do you want to be involved in some of the bigger decisions for tax purposes or something?

What does your management agreement with your PM say about how these management decisions are divvied up?

Back to your original question: it depends on the terms of the lease, because you are bound to those terms.  Is it in month to month? Do you have a clause for notice of rent increases?  All of my inherited leases have been 13 month leases that went month-to-month automatically and require 30 day written notice for termination or alterations - I don't know 100%, but I think this is pretty standard.

 Out of curiosity, why would you ask for the cap rate instead of calculating it yourself after getting info about income and expenses?

First thing is that he's already lied to you, possibly an "honest mistake / miscommunication" possibly with intent to deceive.  So you need to review everything very closely from here out (which you should do anyways)

He has not had 100% occupancy for 10 yrs.  Period.  It's statistically impossible for him to have zero turnover or to have zero time between tenants upon turnover.

Now then. I started buying multi's about 18 months ago and am 3/6 for deals going through.  What I ask for is three years of revenues and expenses (backed up by tax returns), full property disclosure, history of repairs for time of ownership, and copies of current leases.

Definitely do the inspection, if you have a realtor ask them what you should specifically have inspected in your area, if you don't have a realtor ask your inspector. I interviewed a few inspectors and used two before I found a guy who gets all my future business.

If you're getting it financed the bank will want their own appraisal, and you'll be paying for that anyways so don't pay for it twice.  If you aren't using financing ask your realtor for comps.

Get insurance quotes before you make an offer.

Verify taxes on the county auditor's site.  

Call the utility companies and verify the average bills you will be paying.

Figure out lawn care and snow removal before you buy so it's not an issue after you buy.

Ask the seller for all of his business contacts for the building - if he doesn't have any, it's probably a bad sign.

Hope this random rambling helps.