All Forum Posts by: Victor Alfonso

I agree, the only problem is that I'm dealing with a client who intends on living in the property as their primary residence and not an investor. Investors are usually more sane, cautious and experienced.

After having a couple more detailed conversations with an insurance agent my client feels comfortable moving forward and removing the contingency. They've seen over a hundred homes in their price range and don't want to let this deal go away. They are well-informed of the risks involved and I can not make the decision for them.

I'm keeping my fingers crossed.

Hey guys - I have run into a problem that I'm not sure how to handle on a property I'm in escrow on in which I'm acting as a co-buyer's agent. Here's the run-down:

We entered escrow on 4/10 on a condo unit in Southern California. The home inspection has been cleared, however after receiving the CLUE report we found there to be an open claim for more than $50k. The claim is on the previous owner of the property, who is now deceased, and the current seller has no information about this. The only information we were able to receive about the claim was the amount, no description

Our client has talked to a few insurance agents who have all offered quotes on contents insurance (studs in), however when I spoke to a insurance broker that I have used in the past and trust, he said he approached three different insurance companies, and they all stated that because it was an open claim for such a large amount, they would not be able to write a policy for this condo. The mortgage broker also informed us that for the last twelve months in California, contents insurance is required from every lender.

Do you guys think it would be safe to release the physical inspection/insurability contingency? We're considering removing the physical inspection contingency and asking for more time to investigate the insurability of the property, but I'm worrying that this might be futile and we only have a few days left to remove all contingencies.

I appreciate your feedback and help on this.

Victor

I use it mainly because I'm still in the corporate world. I've made a lot of recruiter contacts and some have presented different job opportunities. I keep it updated mostly for this reason, and if I was solely doing real estate investment I wouldn't bother.

This question can go a million directions depending personal circumstances and knowledge, but assuming location and quality of the properties are equal, and you have knowledge in both arenas(very important, stick to what you know) I would go with multifamily for the long term.

The retail landscape is changing drastically and a greater amount of retailers are becoming extinct. Many of the pros of retail real estate are disappearing: businesses want smaller spaces, shorter leases and have more options due to the oversupply of retail space. Not to mention that sales kickout clauses in leases are becoming standard practice(unless you're dealing with first-time business owners who have never leased retail space, another risk altogether). Landlords are having to find different and unique uses to lease their space, and a lot of the time these retailers can't pay significant rents. Triplet net sounds sexy, but when you're trying to drive occupancy a lot of the times you end up with a modified gross deal because the rents you charge might not even cover your extras (CAM, Tax, etc.)The fact is with retail, sales drive your rents. Although there will always be a place for brick and mortar stores, it is no secret that a higher percentage of retail sales are coming via the internet, and this trend is increasing. Unless you're investing in a large lifestyle center or mall, you won't have the community aspect and your success is going to be directly tied to the sales of your retailers, nothing else.

I personally will be investing in retail, but not for long term. I see a lot of opportunity in mismanaged centers that are lacking in operations expertise, but I wouldn't invest utilizing the buy&hold strategy.

Just my 2 cents.

Victor

I agree with the fact that it's probably due to the condition, although I wouldn't completely rule-out FHA for REOs (I closed on a property owned by Freddie Mac with an FHA loan in Feb in a competitive market). The walls needed a bit of patch work and the garbage disposal needed to be replaced, but that was about it. Certain things are needed for it to be in a livable condition, and the realtor probably assumes that it won't qualify.

Some mortgage brokers will not loan less than $40k, others will, you will just have to call around. I was able to get a conventional 15-year fixed loan of $31k ($38.7k purchase price 20% down). The lender might hike the rate up a bit or add a bit to the origination to compensate for the small loan amount, but these are usually negligible. For reference, my 15-year note was at 4.75% with .9% origination (locked in last week) - it probably would have been around 5.25% with .5% origination for the 30-year option.

My hunch is that you're going to have a harder time on getting loan approval for the condo. The waters are extremely muddy with condos today and there are a number of things that can make the unit ineligible for financing, including % of owners vs. renters (can't be less than 51%), % of owners late on HOA payments (can't be more than 10% or 15%), if one individual/entity owns more than x% of the building (I believe it's 10%), etc. These are rules for conventional financing (Fannie/Freddie), but the (super) majority of the loans for residential are going through them. I have heard quite a few mortgage brokers who claim they are able to get portfolio loans in order to get around these requirements, but none of them were able to come through. A couple of condos I entered escrow on fell out of escrow due to these exact reasons.

The lender typically submits the questoinnaire to the HOA, and you might not get a definitive answer until you open escrow. I was fed up after the second time escrow fell apart so I started looking at recent closings of units in the buildings I was interested in to see how they were financed. If the majority were cash deals, then that raised a major red flag.

Victor

If anyone owns property in or around Gaston and Mecklenburg counties in North Carolina, I'd suggest doing a walk-through or have your PM do it if you're out-of-state after what happened last night!

We had some pretty bad thunderstorms that produced hail the size of baseballs along with some wicked lightning. All and all, the property I manage had 16 skylights that were damaged (hail went right through them) and a tree that was hit by lightning that had to be removed early this morning since it was blocking a major exit.

The weather in NC hasn't been so kind since I've moved here!

Victor

Hello fellow BP'ers!

Time to check in! I've been prowling around BP for quite some time now and figured it was about time to make a profile and start networking! I absolutely love the wealth of knowledge on this site including the expert blog posts and the open forums. A little about myself:

I've been managing regional shopping centers for an international company for about five years now, so my bread and butter has been property management. I grew up in Southern Cal (born and raised in LA, went to college at UC Irvine and have managed malls in San Diego and LA). I took a career opportunity (with the same employer) in the Charlotte area and have been here for about a year and a half.

On the real estate investment side, I'm just starting to get my feet wet. I purchased a condo in downtown utilizing FHA (looking at it as an investment since I probably won't be in Charlotte long-term), and I recently networked with some people in Atlanta. I like a few of the opportunities that I've come across down there and recently entered escrow on a SFR property in Cobb County.

My goals are pretty simple - looking for great value in buy and hold properties while generating some extra cash via fix and flips in the Charlotte and Atlanta metro areas. I've been to HOTlanta 4 times in the past 4 weekends (all day trips) as I see a lot of opportunity there and am wanting to get as comfortable as possible with that market. Being that I'm in the property management business, I have some trustworthy, knowledgable professionals (in the Charlotte area) at my fingertips that I've used in my day job and am looking to leverage the relationships I've built and utilize them on my investment endeavors. Long-term, once I have a portfolio of residential I'll be looking to trade-up to retail and multi-family commercial properties.

I have some capital to work with as well as the ability to qualify for a few extra mortgages, so I have a wide-range of potential opportunities for investments.

Thanks for the opportunity to network here and love what this blog is all about!!

Cheers!

Vic

Remember that the lease is the doctrine that you must abide by. Depending on your lease, they will have a certain amount of time to cure this default. If they do not remove the pet in the alloted amount of time allowable per the lease, then they are in default and you have the right to start the eviction process.

My suggestion: As Mark stated, send a certified letter (Notice of Default) citing the clause that specifies that no pets are allowed, with a specific date that the pet must be removed by (again, refer to your lease). From what I've seen, most leases allow for five days for the default to be cured. If they fail to comply, it is your decision whether you want to start the eviction process, and this will vary widely by state.

Victor