All Forum Posts by: Zane Cress

Barbara Corcoran said she over paid for everything she bought. If it's an investment and you can manage it properly over time then the price does become negligible in the long run. Bank lending might get tough on the appraisal side if values go down, but you can always find private money to help with a down payment and carry two loans if needed. Or have a clause in your docs that prevents you from paying over a certain amount if the appraisals come in too low due to market conditions. Plenty of ways to get deals done that don't require the straight forward bank lending scheme. A local bank would probably work better with you when the time comes. I think the biggest thing is belief in yourself and your ability to operate. 

If you like this deal and you believe in it then go for it. You know you better than anyone else and you know if you can make it work or not. You know if it will make sense two years from now. No one can predict the rate, but if you control the property then you can control the cash flow and value to some extent. Do you believe in your ability to operate them?

If you can figure out that utility issue and raise rents then I think you have a good deal here. For long term I would put the utilities on the tenants. They won't care about reporting leaks unless they are the ones paying for it. This is most likely a case of negligence somewhere. 

Pest control company should be able to do this easily, if there is an HOA they can make everyone team up on the cost. If not then you will need to convince neighbors of the danger that rodents can bring to a property. Fire and disease are real issues that happen in these situations. Depending on building codes you might have a firewall requirement between attic spaces for each unit, these may be in need of repair as well. If nothing else you could pay someone to access your part of the attic and build you a firewall and keep the rodents out of your space.

If it's roosting and nesting the spike strips should do the trick, not sure how costly that gets. You can pay a falconer to come scare off the pigeons with their trained birds, not sure how permanent that will be. You could also build a nest site that would attract birds of prey and deter birds of pest for a more permanent solution. 

If gas and water for two properties is costing the seller $1000/month then there is a leak somewhere from one of those utilities. That is an outrageous number to me. My water bills are rarely over $50/unit and my home gas bill even in the winter was around $200. Are the utility costs way out of line in this area? 

I think a lease purchase agreement would be ideal for you here. It would allow you to take over the properties at a monthly rate and guarantee the seller you will finalize the purchase by a predetermined date. Then you can hold the master lease and sub lease the units out while doing the work on them and improving rents and other features. You can negotiate that part of the monthly payment goes towards the principal, or you can do down payment and just call the lease money extra to the seller for carrying the properties a few more years. In this case they would still be paying taxes. It's basically a seller finance deal if you are stretching it 2 years before going to a bank. Look into some Pace Morby Youtube videos, he has some great insight into structuring these.

You will have a very hard time in todays economic environment getting a bank to lend like that on an asset that doesn't appraise anywhere close to the loan value on their books. This is a creative financing issue to me, I'm sure there are places/people that do this since there are a lot of Muslims in the world and I assume a lot of them borrow money from somewhere. 

Your home can be owned by an LLC/business that you have a rental contract with. It is a tax strategy. I believe Tom Wheelright covers it in one of his books.

After 183 days you round up to the 1 year mark is what I have been told. Unless you need to use another FHA loan to move it shouldn't matter for your next loan. If you don't plan on moving or you don't need the strict lending products you can do what you want. Highly unlikely the lender comes knocking on your door to make sure you are home and not renting out the place you bought.

I would focus on MTR, once you rent for 30+ days at a time then the cities can't enforce STR laws on you. You can do this through Furnished Finder to connect with tenants. Airbnb also has a 30 day minimum stay option you can turn on.

Waiting is the right call. Don't promise something until you can definitely deliver on it. You will fill up quickly, take the time to set it all up and take nice pictures before anyone is in there. It's so much harder to do all the pictures once you start renting. 

It's based on rents and what the property can produce monthly. The lending section of BP has a few suggestions. Aloha Capital is one of the big ones I think.