How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 6:01 AM
How to buy 6 houses? (by NE [PA]) Jun 15, 2018 6:05 AM
How to buy 6 houses? (by S i d [MO]) Jun 15, 2018 6:10 AM
How to buy 6 houses? (by myob [GA]) Jun 15, 2018 7:52 AM
How to buy 6 houses? (by Ken [NY]) Jun 15, 2018 7:56 AM
How to buy 6 houses? (by Hammer [TN]) Jun 15, 2018 11:18 AM
How to buy 6 houses? (by AllyM [NJ]) Jun 15, 2018 11:52 AM
How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 12:20 PM
How to buy 6 houses? (by myob [GA]) Jun 15, 2018 12:32 PM
How to buy 6 houses? (by razorback_tim [AR]) Jun 15, 2018 12:55 PM
How to buy 6 houses? (by Ken [NY]) Jun 15, 2018 12:57 PM
How to buy 6 houses? (by myob [GA]) Jun 15, 2018 1:49 PM
How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 1:52 PM
How to buy 6 houses? (by razorback_tim [AR]) Jun 15, 2018 1:58 PM
How to buy 6 houses? (by #22 [MO]) Jun 15, 2018 2:02 PM
How to buy 6 houses? (by S i d [MO]) Jun 15, 2018 2:35 PM
How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 4:43 PM
How to buy 6 houses? (by Vee [OH]) Jun 15, 2018 5:30 PM
How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 11:30 PM
How to buy 6 houses? (by Roy [AL]) Jun 15, 2018 11:43 PM
How to buy 6 houses? (by GKARL [PA]) Jun 16, 2018 4:57 AM
How to buy 6 houses? (by Deanna [TX]) Jun 16, 2018 7:06 AM
How to buy 6 houses? (by S i d [MO]) Jun 16, 2018 7:09 AM
How to buy 6 houses? (by Roy [AL]) Jun 16, 2018 11:18 AM
How to buy 6 houses? (by Roy [AL]) Jun 16, 2018 11:54 AM
How to buy 6 houses? (by Ken [NY]) Jun 16, 2018 12:50 PM
How to buy 6 houses? (by Eddie [KY]) Jun 16, 2018 1:55 PM
How to buy 6 houses? (by Mickie [OH]) Jun 17, 2018 4:51 AM
How to buy 6 houses? (by BRAD 20,000 [IN]) Jun 17, 2018 9:26 PM
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 6:01 AM Message:
Via my Handyman Ad, I got a call yesterday from an elderly landlord who wants to retire and cash in his chips. This man has not 1 but 6 houses he needs to sell. All 6 houses are within 1 block of each other (same neighborhood) and the seller lives in one of these 6 houses.
I am meeting with him in 2 hours to tour his houses. His asking price is $20K per house. At this writing, I am not sure if he wants to sell all in one package deal or sell them individually.
I will report back later when I have more information. --68.63.xxx.xx |
How to buy 6 houses? (by NE [PA]) Posted on: Jun 15, 2018 6:05 AM Message:
Roy, I wish I had the inventory in my area to
Pick through like you do.
Even with ads running all over, I get maybe one call every 2 months worth getting in the car to look at. All the other calls aren't worth the gas. --50.32.xxx.xx |
How to buy 6 houses? (by S i d [MO]) Posted on: Jun 15, 2018 6:10 AM Message:
Roy, I think you have several options.
1) Ask if he'll lease option them to you and allow you to sublease. Then he gets paid every month, has no maintenance to worry about, and you pile up cash to close out the option in a few years.
2) Buy the portfolio with 1 or more "silent partners" and use profit and equity sharing rather than debt. Then if done right you can sell 1-3 of them, split the proceeds with partners, and own the rest free and clear.
3) Syndicate small time. You and several buddies pool funds, then at the closing table Roy gets title to house 1 and 3, Joe gets house 2, Lenny gets house 4 and 5, and Oberon gets house 6. Roy of course gets his pick of the litter since he's the one putting the deal together.
4) Buy them one at a time, fix up, and sell, reinvesting the profits to buy the next one. --173.19.x.xxx |
How to buy 6 houses? (by myob [GA]) Posted on: Jun 15, 2018 7:52 AM Message:
Roy no pick and choose-- make it an all or nothing deal-- minus the one he lives in. You want out-- I'm in for the package-- ALL IN. --99.103.xxx.xxx |
How to buy 6 houses? (by Ken [NY]) Posted on: Jun 15, 2018 7:56 AM Message:
Best deal you will get is if you take them all at once,have him hold the note if he will,he called you so he wants to sell --72.231.xxx.xxx |
How to buy 6 houses? (by Hammer [TN]) Posted on: Jun 15, 2018 11:18 AM Message:
Offer to buy all at once and either
1. Have him hold the note and get cashflow at low(er) tax rate. Make sure you get terms that work for you....Ie. no prepayment penalty, rate, payments, balloons etc...
2. Do a take down schedule where you pay off a set number of houses per year (at a date that works for you both, typically at the end or beginning of the year). This will limit his out of pocket tax liability per year avoiding a big lump sum being due from capital gains and depreciation recapture. Effectively he will be doing an owner finance with balloon payments tied to individual property payoffs.
Double check with your accountant to see how the sellers tax liability can be minimized based on how the deal/payoff is structured. Many times, older retirees are VERY concerned with how a property sale will effect their taxes. Structuring the deal so it benefits you both can often be the deciding factor in getting a great deal & or great terms. --137.119.xxx.xxx |
How to buy 6 houses? (by AllyM [NJ]) Posted on: Jun 15, 2018 11:52 AM Message:
Why would an elderly person want to hold the note. That means he holds the mortgage right? I had some con artist ask me to do that. He was a big coach around here and had six or so failed businesses to his name. I laughed at him when I said no and explained the age issue. --73.178.xxx.xx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 12:20 PM Message:
Okay, I have met with the seller who is an 76 year old man
with early signs of senility or dementia. All his houses had chains/padlocks on them. He had 3 key rings with a total of 50 keys and could not match one key to any of his padlocks. Out of 6 houses, we could only go inside 2 of them since the doors were already unlocked. 5 of his his houses are vacant, however, one house still has a deadbeat tenant and he gets free rent just because he keeps the grass cut.
When I asked him why he wanted to sell, his reply was to "get the city's 'nuisance and abatement' dept. off his a$$. One of his houses had a 'condemned notice' posted on the front door over a year ago.
So, I did tell him I was 'very interested' and I would be making him an offer, but $20,000 per house is a little steep for these 'fixer-uppers'. I do know this neighborhood well.
Now, I have to figure out just what that offer will be. He does want to be 'cashed-out' which at his age I can't blame him. The house he lives in is not one of the 6 houses as I had originally thought. --68.63.xxx.xx |
How to buy 6 houses? (by myob [GA]) Posted on: Jun 15, 2018 12:32 PM Message:
no pigs in a pok!!!!!! must see inside ALL. before any further time-- must meet with town and find out if they will work with youif you were to purchase and CLEANU UP the places. If not no further action or time spent.
8K for them all.
Reason is "you don't want to be 76 when there all fixed up". --99.103.xxx.xxx |
How to buy 6 houses? (by razorback_tim [AR]) Posted on: Jun 15, 2018 12:55 PM Message:
I agree that you need to talk to someone at the city especially the one with the posting on it. --166.137.xxx.xxx |
How to buy 6 houses? (by Ken [NY]) Posted on: Jun 15, 2018 12:57 PM Message:
He really just wants the houses to go away,money is not his primary concern.MYOB price of $8000 is a good place to start,what he really wants is to have them gone fast,emphasize how fast you can close and that you are the fastest guy in town to close.Then figure out how to close them fast,like pay a searcher extra to get searches done in 1-2 days and tell your attorney to close next week.If you call and tell him you need to get in and ask his permission to cut the locks he will probably let you as long as you promise to put new locks on them when you leave.He probably hates code enforcement so tell him you can deal with them and call them a few choice names,people who have been tormented by code loves to hear them called names and loves to believe they are selling it to someone who can fight the code officer.These houses are ripe for the picking --72.231.xxx.xxx |
How to buy 6 houses? (by myob [GA]) Posted on: Jun 15, 2018 1:49 PM Message:
no locks cut unless you see deed or titles? --99.103.xxx.xxx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 1:52 PM Message:
Razorback,
In the past, when I tried to get information from our city's building dept. as to why a particular house got condemned,...their standard answer is NO,...this is a private matter and you have to go the property owner and get him to show you the condemnation paperwork we sent him.
It is a losing battle here. The property owner always wants to blame someone else for 'ratting him out'.
I forgot to mention,..one house out of 6 is actually clean and in 'Rent Ready' condition. --68.63.xxx.xx |
How to buy 6 houses? (by razorback_tim [AR]) Posted on: Jun 15, 2018 1:58 PM Message:
Check FOIA laws. They may have to tell you if you submit a FOIA request. --166.137.xxx.xxx |
How to buy 6 houses? (by #22 [MO]) Posted on: Jun 15, 2018 2:02 PM Message:
Tim is on to something.. its likely public info which should be made available to you. --173.24.xxx.xxx |
How to buy 6 houses? (by S i d [MO]) Posted on: Jun 15, 2018 2:35 PM Message:
One caution: if anyone later comes out of the wood works and claims he was not of sound mind when making these decisions, it could be used as grounds to undo transactions.
"Signs of senility and dementia" would be enough to concern me. Bare minimum, I'd call my attorney and ask if there is no official diagnosis yet, what the risks are.
His heirs probably aren't interested in them today, but if you fix them up nice and start making big $$$, nutty folks (crazy cousin Lenny) will show up and claim you "took advantage of a senior citizen."
I'd at least want my attorney to reassure me that we could quickly file to dismiss any such cases. Also, I retract my ideas about lease option or anything where he holds a long-term interest due to the aforementioned soundness of mind issues complicating things. Make it a
clean, fast deal. Cash, whether it belongs to you or comes with partners only. --173.19.x.xxx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 4:43 PM Message:
Sid,
I considering doing something here I have never done before,..just to see what happens.
I am considering being up front and honest and just tell this guy I have $20K to spend here but I expect to buy at least 3 houses from you for that amount. If you want to throw in the other 3, I will take them off your hands, but I will not pay any extra for the worse three. (I have yet to determine which are the worse ones). --68.63.xxx.xx |
How to buy 6 houses? (by Vee [OH]) Posted on: Jun 15, 2018 5:30 PM Message:
I am afraid the dimentia may be contagious, you state there are 6 houses and the owner is living in one, 5 are empty - 1 is a lawn mowing deadbeat and you could not get inside of 2, is this a math test? there is at least 1 too many houses in this program, but if you can drive down the price and get him a couple years of reduced rent it may work out - I know you will be ferreting out a lower price per unit. --76.188.xxx.xx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 11:30 PM Message:
Vee,
Dementia is not contagious here. There are a total of 6 houses for sale. Of the 6 houses for sale, 5 are vacant and a deadbeat is living rent free in one of the 6. Are we clear now?
The owner lives in another house (#7-one block over) that is not for sale.
Are we clear now?
--68.63.xxx.xx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 15, 2018 11:43 PM Message:
Sid,
In my original post, my assumption of senility or dementia was not a professional diagnosis. If he had been 20 years younger I would have assumed he was just a absent minded goof-ball that can't unlock his houses. When any LL can't unlock his own houses, it is definitely time to sell and get out of this business.
--68.63.xxx.xx |
How to buy 6 houses? (by GKARL [PA]) Posted on: Jun 16, 2018 4:57 AM Message:
Roy, you may have hit a home run here. I'd offer him the 20K upfront and get him to hold a 3 to 5 year note if he wants more money. You should be able to rehab and refinance to pay him off in short order. If the one house is rent ready, you can probably refinance it to raise the money to clear him out. --207.172.xx.xxx |
How to buy 6 houses? (by Deanna [TX]) Posted on: Jun 16, 2018 7:06 AM Message:
When it was just an "elderly landlord wanting to cash out", that was cool. When it was "elderly landlord with the City breathing down his neck wants to get rid of albatrosses some of which he doesn't have keys for", it sounded a whole lot like that package deal I picked up the other year ago. :)
A lot is going to hinge on his motivation for selling. If he has something specific he needs to buy, like $x for assisted care living or something, he'll be harder on his final price, even if it's not realistic. If y'all don't come to an agreement this time around, you know perfectly well to leave the door open so he can find you when he needs you in the future. :)
If he has health issues, and just wants to get away from the stress, and the taxes and yard care on empty houses, and the City's love letters, and everything else, then he'll be more anxious to get rid of the houses, and the price is of secondary importance. But the important thing is to let him be done with it with a single transaction so he can walk away--- not trying to play things out with fancy transactions that might work with an investor who isn't already 76 and tired of dealing with these things. You want to solve his problem today, not take five years to do it.
One side note--- before we finalized things with our seller, we took the precaution of checking in with the City's Code Officer to say, "Hey, I know you've been eyeballing so-and-so's properties and have started condemning them. We're interested in buying them. We wanted to make sure that there wouldn't be any problems from the City if we worked on our timeline?" It was at a City Council meeting, where they were meeting about the first condemned property, and the homeowners didn't show, so it just ended up being Code and DH. And Code said, "Sure, no problem. I know you do good work. There's nothing we can do about the one that's currently under condemnation, but as long as you board up the vacant houses until you're ready to work on them, we'll give you space to work."
When the sellers found out he had had that conversation with Code, they were so mad, they called the DA to complain that DH and the City were conspiring against them, even though they were the ones who had approached DH in the first place. DH was about ready to walk away from the whole thing, because he doesn't need that kind of drama-- but we did go through with it, and I'm still working on those darn things. :) Two down; one is storage for the indefinite future; one is in my photo album and we'll be tiling the bathroom today; and one, I swear I'll get to it sometime before 2020... :P
Good luck with your conversations with him! --96.46.xxx.xx |
How to buy 6 houses? (by S i d [MO]) Posted on: Jun 16, 2018 7:09 AM Message:
Roy, I understand you don't have a professional diagnosis, but I am cautioning you from the stand point of someone who has been A) a licensed real estate agent and B) one who has seen a part of my family deal with Alzheimers.
People get WEIRD when there's money involved. There doesn't have to be any legit diagnosis for someone to claim the deal didn't go down fairly, and if you're put on the stand to testify and the plaintiff's attorney asks you, "Did you have any reason to believe person X wasn't of sound mind at the time you made your offer?"
Contracts are only valid if both parties are able to have a meeting of the minds. Unsound mental conditions by default void contacts: period. Judges can undo sales after the fact if the plaintiff can prove you had a reasonable chance to suspect that not everything was 100% in the clear. The comments you made to us earlier clearly demonstrate you have reasonable chance to suspect that there are issues.
All I'm asking you to do is call your attorney and run this scenario by him/her. If he/she says "No issues, go for it" then do it. But he/she MIGHT have some wisdom to impart to you. It's worth a 5 minute phone chat to learn if there are any risks. --173.19.x.xxx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 16, 2018 11:18 AM Message:
Sid,
Without a professional diagnosis, how would anyone (including my attorney) know whether or not a person is mentally capable of making a decision to sell real estate which they hold Title to? This guy understands plain English and I can converse with him back and forth,...but will he remember our conversation the following day? Who knows?
When I make an oral deal with any seller, I write it up on a 1 page 'Agreement to Purchase' document. Mine has no legal jargon and is written to where a person with a 6th grade education could understand it. If the seller signs it (they usually do) and I sign it,...then this document is turned over to my attorney. He then calls the seller and confirms over the phone what they just signed. If the seller gives the attorney the 'go-ahead', then a Title Search is done and a closing in his office is scheduled. --68.63.xxx.xx |
How to buy 6 houses? (by Roy [AL]) Posted on: Jun 16, 2018 11:54 AM Message:
On a side note, my Handyman Ad expired 2 weeks ago and I am still getting calls! One call came in last night and another one just 3 minutes ago.
Again, I wish NE or Ken was down here to take some of the excess sellers and run with them. They all seem to have asking prices in $20-$25K range too. --68.63.xxx.xx |
How to buy 6 houses? (by Ken [NY]) Posted on: Jun 16, 2018 12:50 PM Message:
Roy,in the last 10 days my advertising has been bringing a lot of calls also.I bought a house from a guy years ago who was not all there,shortly after the sale I got a letter from the father who it turned out hadn't spoken to the son in 10 years threatening to sue me for taking advantage of his son,i spoke to my attorney and he said if the family really felt that way they should have had a court order and something should have been filed at the county for everyone to see that someone else was in charge of the sons affairs and since they hadn't done that it was tough,turned out the son was very upset that his father tried to stick his nose into it after never being around for 10 years --72.231.xxx.xxx |
How to buy 6 houses? (by Eddie [KY]) Posted on: Jun 16, 2018 1:55 PM Message:
maybe let him carry the note with a 3 yr balloon
--66.117.xxx.xx |
How to buy 6 houses? (by Mickie [OH]) Posted on: Jun 17, 2018 4:51 AM Message:
Since the city and county aren't known for being helpful, I think I'd deal with them a little differently. I'd call and ask if a house has been condemned what a person would need to do to get it undone. If you find out it can't be undone you might have a bargaining chip and might have found a way to make the Big problem in his life go away. You might be able to offer 30k for all and you'll take care of the condemned house. If the city will let you bring the condemned place back to life so much the better. If he accepts great. If not leave things on friendly footing and wait. If he's unorganized and forgetful that might just be old age and the fact that he hasn't been dealing with the houses in some time. They weren't a priority until the city started bugging him. If you have more conversations with him you'll be able learn about family and other possible road bumps. I wish I had the number of possible deals you have. I close on the 2 bed 1 bath on the 20th. Price and closing are under 18. Let us know what happens with this one. --174.233.xxx.xxx |
How to buy 6 houses? (by BRAD 20,000 [IN]) Posted on: Jun 17, 2018 9:26 PM Message:
Roy,
Go for it!
I’d offer a full price, deed now, 10-20 year term where the payments continue to his estate if he dies, 0%.
The sound mind thing: after the sale a relative can sue you for taking unfair advantage of him. Been there.
I’d habe him and his lawyer sign my letter which states the seller understands what he is doing and the buyer will be making a profit from these properties. Clears the air.
BRAD --68.50.xxx.xxx |
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