All Forum Posts by: Will Gaston

All:

Looking at an out-of-market deal that seems to be a good one except for one (very big) issue. Property is currently MFH/Retail but used to have a gas station on it. Seller disclosed this to immediately and has been an open book thus far. He inherited it from a family member & believes there still could be a tank underneath the parking lot where the gas station previously sat.

I know any lender will require a Phase 1 & a Phase 2 bc of this. Let's assume the seller agrees to rectify any issues that my lender requires. 

My questions are:

1) What are the future liability risks for me as an owner who purchased this property?

2) What do I not know that I should know about these situations that I should know?

For context, I have lots of RE experience but have zero P1/P2 experience.

@Leroy Kim this is just for the 1st year bc in the 2nd year it will (or should already be occupied). 

Look at this way. If your goal is get maximum rents then you need to have the largest pool of students available looking. That is always earliest in the year.

At my school: August 15th, 2021 there were ~30,000 students looking for housing for the 2022-2023 year. That number dwindles down every single day until August 15th, 2022 when everyone has gotten housing and 0 need it. This is why I advertise super early (Sep-Dec) for the following year.

@Leroy Kim Yes, this is something I very much consider. If I have my ideal time frame it would be to close on something in September. Rehab it in October through December. Have it available to show in Jan/Feb. This may seem too early to you but getting max rents requires that a property be available to market as early as possible.

I'd expect 4-6 months of vacancy for your first purchase if you do it this way.

Thanks @Dave Foster @Steve Vaughan!

FYI the LLC that I'd be selling from is a single member LLC and a pass through on my returns. The new LLC would also be a single member LLC & a pass through on my returns.

You think I'd be okay to purchase straight w/ a new LLC? Obviously not holding you to this and will get counsel, CPA, etc. Just generally speaking as I'm considering selling something that the above would apply.

Question for any 1031 experts out there (cc: @Dave Foster).

I'm looking to sell a free & clear property and want to do a 1031 with the proceeds. Would it be prohibited for me to purchase the replacement property and then deed it over to a new LLC after I purchase?

I believe the selling LLC and the buying LLC has to be the same. Curious how long I'd have to wait until putting into a different LLC.

@Austin Marvel I don't have anything for sale just curious where your triplex was? Was that the brick one on the corner of Devine?

@Austin Marvel curious where the triplex is located? I own a lot of old stuff and may have something in your area.

Also, I'm not a big carpet guy but that might work?

@Craig Simpkins but would the renter's insurance policy have a pet breed exclusion for the tenant holding it?

@Lynnette E. Thanks! What are the chances you have a link government ruling?

Upside of being 74 years old: You can say whatever you want!

Thank you @Russell Brazil @Nathan Gesner@Kelsey Bailey!

Just to be clear, I am fine with the dog. Also, she has used petscreening.com and the report seems fine. 

But I do not think my insurance company is okay with this. And I am not okay with not having insurance (and neither is my lender!)

Waiting to hear back from my agent to verify.