Buying/renting houses?

[5pecialist]

Originally Posted by BustedS13

what happened? like, what did your inspector miss?

There was wood rot in some beams under an outside porch. Even though I had used that structure all summer long and it looked fine, the city declared it unsafe years ago and threatened to board up my unit, fining me every day or auctioning off my unit for damages. In the end, I had to pay to rebuild the wooden structure (under HOA rules I couldn't just delete it since it would change the appearance of the building).

If this had been owned by people instead of a bank, and they failed to disclose this outstanding violation, I could have come after them for damages. Somehow since they are a bank & sold it as a foreclosure, they were able to get around any & all legal responsibilities.

I realize this probably a worst case scenario... but shit does happen! I have shit for luck.

[ronmcdon]

I guess that's another thing to take into consideration.
Avoid properties with Nazi HOA's.
It's just another endless source of frustrations, if not expenses.

[orion::S14]

Originally Posted by holemilk00

If it was something like backed taxes, an asset fee such as connecting to public works like water or sewer, or a noncompliance violation for a city/county/state code then it is the banks responsibility to inform you IN WRITING of those outstanding fees before closing. This is why you have to have a closing at a law office or at least a third party law office representative present where ever you close. Its also why these types of law offices carry such a heavy bonding for this. If something was missed by the lawyer, and the bank refuses to pay, then the lawyer and his/her office is liable to repay you for the fees. This is the sort of stuff I'm in school for at the moment, and this law is accepted by all 50 states. You should really take your payment history and all the paper work you have back to the lawyer that handled your closing because its the banks responsibility to reimburse you for these sort of fees.

Along those lines, don't forget about Title Insurance. It's pretty standard to obtain title insurance as part of closing on real estate. Many lawyers who do a lot of real estate work are the title insurance brokers.

Basically - If there is an existing lien on a property you buy, and they miss it somehow...the title insurance will typically cover the expense.

...

As for owning rentals - I manage a number of rental properties in my area, and it's IMPOSSIBLE to manage unless you're local, IMO.

if you have to pay for any work that's needed (even simple stuff)...you'll piss away all your rental income.

Assume you have a good renter for a year or 2...and they move out. You'll need to go in, clean the place out, touch-up paint, etc...and then spend the time to find a new renter (including taking applications, screening them, etc..).

Sure, you can have an agency do it for you...but it kills profit.

...

AND, bear in mind...for those of you are are going:

"Awesome, I'll buy a $75,000 property and it'll be worth $100,000 in a few years. $25,000 for doing nothing!!!111!!!1!!!!"


Factor in closing costs, maintenance costs, property taxes, and income tax (even capital gains)...and that $25,000 profit turns into $10,000 real quick by the time you get a check.

On top of that, imagine the HVAC system goes out while you own it, and it costs you $4000 for a new one. Or a new roof ($5,000-6,000, EASY --- I just did a $14,3XX roof on one of the houses I manage.).

Now that $10,000 you would have made, after taxes and fees...is pretty much gone.

So don't approach "flipping" or renting as a quick-n-easy buck. It's not that way, anymore.

- Brian

[5pecialist]

Originally Posted by ronmcdon

I guess that's another thing to take into consideration.
Avoid properties with Nazi HOA's.
It's just another endless source of frustrations, if not expenses.

Avoid HOA's in general.

I just got notice that our HOA is going to assess each owner $1,500 for building repairs. There goes my plans for a Willwood big brake kit... and decent Christmas gifts for my bro and sis

[WanganRunner]

^^
WTF?

Are you in a Condo?


My HOA has draconian "appearance" rules, but generally doesn't make my life difficult. They shovel the sidewalks, mow the median grass, keep up the pool, etc. I pay them $80/month and they don't complain about my many cars or loud garage activities.

[WISH ONE]

My lease is up and condo is up for rent this month.
$1800/month.
HUNTINGTON PACIFIC CONDOS
on the sand in Downtown HB.
gated, 2 parking spaces security.
PM me if interested.