All Forum Posts by: William C.

Wayne Brooks don’t you mean if you were this buyers agent you would have had the issue resolved PRIOR to collecting your commission check at the closing table? I agree the buyers, and the buyers agent messed up big time by going to closing without resolving the issue. Everyone is giving their opinion on what is right and what is wrong, that’s why they differ so greatly. The simple fact is they signed the documents at the closing, knowing their was an issue, smaller or larger than believed to be, its on them. Again, like I mentioned there are specific documents in my state signed st the table to avoid this exact situation, have the agents pay for the home warranty, it’s just as much their problem as yours, at least that’s how I’d feel if I were in their position, they dropped the ball.

All properties are sold AS-IS, unless otherwise stated. That term is used so much in the business and I never understand why. Even when a buyer elects an inspection contingency, the home is still AS-IS. They simply have the option to request repairs or walk away. I typically advise sellers to repairs items any and all buyers would ask for, and go from there. So with all that said...As is or not, the property has been transferred. No way no how you are on the hook. Think about the precedent that would be set in court if they ruled in the buyers favor. Sellers all over the country would have the ability to move into homes, “find” or create issues, and the go back to the seller. Not a chance. Give them the number of your AC guy. I personally wouldn’t have even gone as far as you did the day before settlement. The issue needed to be addressed at the time of inspections. The only situation you WOULD be on the hook is if the AC unit was working at inspections, then stopped working before settlement. But the issue would have to be addressed PRIOR to settlement. The buyers should have had you fill it with refrigerant to Make sure that solved the problem. Otherwise, they took ownership, it’s their problem. Did you sign a final walkthrough document at settlement that specifically states the buyer is accepting the property in its current condition, unless otherwise stated?? I always have the signed as the agent. As to not be in this position. I am curious what your agent is advising. I am not an attorney and this is not legal advice, just my honest opinion.

Are you buying to invest? Or buying to live there? Two completely different things honestly. I don’t understand what you mean by “running the numbers” on a single family Home you plan to live in. What would be the numbers you are running? The future value of a home that your turn a basement into a bedroom? Just kinda unclear on your goal. Buying as a rental and running the numbers makes complete sense to me, the former doesn’t though. There is no way to know the future value of the home unless you know you’ll be selling within the next few months, which doesn’t seem to be the plan. Maybe clarify? If you looking for a home to call your own, that’s doesn’t need much work or repairs, your likely to pay market price or more, so this story is likely to continue to play out the same way.

Talk to your real estate agent. The biggest difference in my opinion will be finding commercial Tenants for the commercial space. What is the demand in your area? What are the market rates? Your renting to businesses instead of people looking for a place to live so it will be a whole new ball of wax, but a good agent should be able to point you in the right direction. The great thing about real estate is the numbers won’t lie. Assuming there is demand for the commercial space, assuming there is for the residential space, the numbers will tell you whether or not to jump in or to pass. I personally know the residential side like the back of my hand but really don’t have any experience with the commercial side. If I could still cash flow assuming a long vacancy in the commercial space I’d likely look into it. It all comes down to supply and demand, which also will affect the price, or vice versa, but it’s a local question that most likely can’t be answers by someone on here, and could be better answered by a good commercial agent in your area. Best of luck.

Fannie Mae, or FHA who is in my opinion the toughest lender when it comes to condition, only require a property is safe, and secure. For example t must have hand rails, and no peeling paint, no holes in the walls, but aside from that, I rarely ever see properties get denied because of condition. And told it is, they’ll just list the repairs you need to make to get the loan approved. I think your creating fear where there shouldn’t be. Your properties sound like they are in decent shape, I’d be willing to bet you have no issues getting the loan. Every lender is different, as is every appraiser, so you really can never know ahead of time exactly what they might be looking for in condition, but like the example I made above I know FHA will Call out peeling paint and hand rails so I always warn buyers and sellers ahead of time to expect to repair them.

I honestly think your making a mountain out of a mole hill. The lenders will simply input the number that is listed on the sales agreement. Whether it’s a zero, or an 8, they still need to make the key stroke. So I really don’t see any issue with it. It might seem easier for you to round it up, but they still enter all the numbers into the system, zero or not, this not saving any time or mistakes.

Sorry, I just saw a post where it said it was included. Run the numbers on the BP calculator, it will spit out a great little report and you can share it on the thread that way everyone can see ALL the expenses we are counting and not counting. The truth is, $1500 net cash flow is amazing and I said it twice now but it really is at that purchase price and with that amount of cash out of pocket. Don’t fool yourself though. It’s never best case scenario. So don’t look at the numbers and tell yourself, I don’t need capex set aside, because I’ll never have to replace the roof. You’ll for sure find yourself repairing items you didn’t even know existed, so just plan for it. Regarding the vacant units. Do not have them fill the units for you. Absolutely not. You’ll be tied to the lease they sign and what is their motivation to find you the perfect tenant? I actually try to take all my properties over vacant, and I start fresh with my tenants, at my rate, in my leases. On paper it looks like a “deal”. By there are intangibles with the condition of the building and the location. Both of which I can’t comment on, but both of which are the key to taking a deal “on paper” to being a deal in real life. Since your going to be living there with a roommate, you don’t have a whole lot to lose. Sure it could be a total stinker and you could need to sell within the next 6 months but it would be a valuable lesson learned for way less than a college degree.

We are forgetting your 134k FHA loan payment as well, aren’t we?

Look at it from the sellers perspective. What offer would you have accepted? We don’t know the exact dollar amount of the other offer but let’s assume it was within $5000 of your offer. Cash, no contingencies, no appraisal, so basically guaranteed to close for the amount of the offer...or, your offer. Appraisal, Mortgage contingency, the chance of the appraisal coming in low, or you not qualifying or the property not qualifying and the deal falling apart. I’m taking the cash offer 100% of the time. Unfortunately, there is not much you can do to compete with cash offers with a Mortgage contingency, other than offering more money, making your deposit go “hard”, waiving other contingencies. I don’t agree with this per say as an agent because I would not operate this way, but you may have had a better chance of getting the property if you used the sellers agent as your agent as well. They would have made 2x commission on the deal, so therefor would be more motivated to get your offer accepted. Every agent is different, and like I said I don’t agree with this practice, but some agents may work harder to get your offer accepted since they will make more money that way. Best of luck on the next one.

Do you HAVE to use Fannie Mae? I used a local bank who is a portfolio lender and they gave us 80% LTV on a cash out refi on our 3 unit property. Don’t force yourself into the Fannie Mae box of 25% down if you don’t need to.