All Forum Posts by: William Jenkins

Welcome. Good news: In general you are in probably one of the best markets in the US if you are looking for cash flow opportunities. Bad news: Everyone else and their entire family has caught on to this idea and properties in the area are going for absurd prices. Most do not know what they are doing or are buying turnkey. They will fail unfortunately. I hate to suggest not taking the leap, but I can tell you with 100% certainty that if you buy something now you will be paying too much. The only exception would be an internally generated lead not found on the MLS or through a wholesale operation. I would suggest trying to find off market leads and target your marketing accordingly. You may be able to come up with a deal or two and in the mean time I think you are going to see the market correct a bit. The next round of buying opportunity is going to be tired landlord sellers. Could be today, tomorrow, or a couple of years from now but it will be coming.

I would need to know more about the property but here is the likely situation: The property is probably zoned single family residential even though a multifamily structure exists on the property now. The building was either built before the area enacted zoning laws, or the property was rezoned to a less intense use sometime in the past. Either way you now have what is called a legal non-conforming use. In general you can continue to operate the building as is, but you will never be able to rebuild or substantially alter the building in any way. In short, yes this does affect value in a negative way but the degree will be based on your location and market as well as how much of the total property value is attributable to the land itself. This is a generalized response only and you should certainly do your own research and consult a local real estate attorney if necessary.

First of all let me say that it looks like you have the knowledgebase needed to get back on your feet again.  There are quite a few people on here that don't have the deal experience that you do, and you should consider yourself fortunate to have that.

Hindsight is always 20/20.  Everyone is going to have a tale about something that they bought or sold, and how they should have known this or should have known that.  I bet if you evaluate your life, there are probably many instances where you did make the right decision (BTW... doesn't always have to involve a monetary decision).  Did you ever consider those?

Without knowing your market I would suggest you do the following:

1.  Estimate your own income and expenses based on your knowledge and determine the current cap rate.  Don't always go by what the owner tells you.  I would then research the comps regarding the cap rate and see how it compares.

2.  Review the rents and comp it out to similar units.  Any room for upside, which would increase value?  Are they high for the area, and is there a possibility that you may have to reduce them to attract tenants?  What is the outlook for the area in general? 

3.  Sounds like the $35k is most if not all of what you have.  Nothing wrong with that, but you need to be prepared for things that could cost serious money with this property.  I would hate to see you close, and then not be able to do a repair 6 months down the line that would render some if not all of the units un-rentable.  DO NOT USE CREDIT CARDS

Owner financing is a great way to buy but a deal still needs to be a deal.  The owner financing terms look attractive but you need to make sure the purchase price is attractive as well.   

Tim. I think you are vastly underestimating what it would take to "retire" early. You look fairly young. As you get older you will see your expenses rise (marriage,kids,healthcare,etc). I am from St. Louis and I know your area has a low cost of living but I think you will still want a much higher standard of living than what you are looking at. My advice would be to think bigger. If you plan on staying where you are, with some work you could become a big fish in a small pond. My grandmother did that in a small town and made a fortune.

Do you still have a contract in place. I would consider taking an assignment of the contract for a nominal fee. Call me if you are interested.

Are they good tenants otherwise? I personally wouldn't give it much thought unless there were other issues at the property. If the rent is paid, the property is cared for, and you aren't getting calls from neighbors or the police, then let it go.

Jude.  I would be interested in talking to you on this.   Let's talk tomorrow and do a quick NDA so we can go through some of the details on the deal.   

Sounds promising....  Here are my thoughts..

It would certainly have to be reviewed further, but it seems like you have upheld all the buyer side sale contract requirements and that the seller is not upholding theirs (i.e. they are now changing the deal regarding the tower, when the contract specifically states that the tower parcel and income are to revert to you after 2 years).  Seems to me like it would be going from a good deal, to a marginal deal with their change of heart.   

You would have to dig into Oregon specific real estate laws to see what the state laws are, but at first look, I think you could have a case for the enforcement of specific performance.

Does the deal make sense if you were to never see the tower revenue? 

Jude,

I can tell you with 100% certainty that their agent is squirming right now because he/she doesn't know what they are doing.  Couple of quick questions:

1.  Does your contract mention the cell tower on the property at all?

2.  Have you seen the cell tower lease and all of the terms of that agreement?

3.  Have you 100% upheld your end of the sale contract?  No discrepancies, no missed dates, etc.?

Let me know and perhaps I can help. 

Thanks,