Housing conundrum....

[TheSilverBuick]

Looked at a couple places. The first option is not what I thought at all. It's an early 1900's home that has been moved to that location and needs a ton of work I have zero interest in doing.

So on the option #2. The shop is insulated and has 220v power, and the realtor is going to get back to me on the amp service. My bargaining position has dropped a bit as the current renters have first right of refusal to match any offer I make. The shop was filled with trucks pulled apart. There is a TON of crap piled all over inside, so I didn't take pictures, but it's going to be a hell of a chore for the renters to clear out in any kind of decent amount of time, but not really my problem if I fully pursue the place though. I had a few questions on the place the Realtor is going to get back to me on. For the trailer, it was pretty cool with two exceptions that would have to be corrected almost right after I'd move in, or even before. Both involve carpeted rooms, both bathrooms and the kitchen are carpeted. I find that pretty disgusting. I like carpet for living rooms and bedrooms, but definitely not bathrooms and not thrilled about kitchens.

So I'm going to give it a couple days, and probably call back Friday to find out what the realtor would expect on the financing, as she implied the owner would carry the loan, but I'm not clear on what that means as I'd figure the renters would of jumped on that option if they couldn't afford a full down payment.

[TheSilverBuick]

The shop dimensions are, 32ftx62ft for the main RV door'd section, then on both sides are 10ft lean-to's that run ~40ft of the length. The one with the car door on it is completely open to the inside, the other side is mostly partioned off with about a ten foot wide opening into the main part. So approximately 2800sqft of shop plus concrete pad outside.

Good point on the electric Beags - hopefully the property has 200 amp service coming to it.

The shop itself only has 30 amp service. So I'm guessing pretty much limited to lighting, and minor power tools? Or at least that is what the owner recalls, but he isn't the one that built the shop.



I'm going to go look at another place on Friday. I may make the first offer on option #2 on Friday as well.

[Beagle]

You can ask for a carpet / flooring allowance. I'd have it yanked, or call hazmat and have them yank it. I'd probably puke for an hour if I thought about it while I was pulling it up.

30a @ 220 is 60@110, you can run quite a bit of junk off of that. Hell, even 30@110 is a lot. By modern ratings that's probably "7.5" hp rating worth of compressor. They get carried away with their ratings these days. It'll hold a pretty good sized compressor.

Best of luck on the offer if you do it. I think you are doing it right with your approach, no need to get in a hurry. I get an idea stuck in my head and lose objectivity.

[SuperBuickGuy]

If the renters could buy it, they would. Don't let their "right of first refusal" throw you. No one makes rent payments when they can own, no one.

As for the owner-carry. A lot of times, an owner will reject a higher cash offer and carry the contract because the profit of the sale is spread out over several years - thus they pay a lot less in taxes (I did this for my dad when he sold his commercial property). If it is owner carry - market rate, or just a little under is where the optimal rate should be.

Do consult with a lawyer if it's owner finance. If it is owner finance - meet the owner, and be certain that this person 1) doesn't have an incumberance on the property; and 2) that he (or she) isn't in difficult financial shape. I've had too many cases where the buyer is making payments and the owner isn't paying the bank - that IS dischargeable in bankruptcy so the owner has no motivation to do what is ethical or right (here's where we insert Aaron's blurb to potential clients about the difference between moral law, and state law).

If not, a realtor is more than capable of handling the paperwork.

Also, if the owner seems to be a jerk - low ball him let him have to argue with his renters for the rest of the term of their rental.

[BBR]

If the renters could buy it, they would. Don't let their "right of first refusal" throw you. No one makes rent payments when they can own, no one.

That is what I was going to say.

Unless you know the owner firsthand, I would stay far far away from any sort of owner financing.

[jcharliem]

...No one makes rent payments when they can own, no one...

Is that right? Sheesh.

[SuperBuickGuy]

Is that right? Sheesh.

yes, but to clarify, those reasons could include:
1) lack of money
2) lack of stability (such as temporary job, insolvent employer, job requiring travel)
3) poor credit

There are more, but those are the top 3....

which leads to the number one reason to own

stability, a landlord can't sell your house and make you move.

[1badmonkey]

since i opened my shop, those top 3 describe me too....

anyway...

I am enjoying your property search... what ya looking at on friday?

myself, i would shoot a lowish offer on the big shop. shouldnt be too big of a deal to upgrade the electrical service to the shop....

10 acres....

[stage1scott]

Randall-everything posted above is excellent food for thought-only thing I have to add is, I have had 3 rentals for 11 years, and while I do have a couple of horror stories, which taught me to screen my the applicants better,it has been mostly clear sailing and the long term benefits of an additional cash stream in your life is well worth it. I like number 2! you could do the loft deal in the shop and rent the house ya know! then you have 2 rentals paying for your life.

[Schtauffer]

No one with a brain makes rent payments when they can own, no one.

Fixed it for you. Lots of people rent who could afford mortgage payments; they typically are not good at math.

[TheSilverBuick]

Fixed it for you. Lots of people rent who could afford mortgage payments; they typically are not good at math.

I know at least two people hung up on the commitment of that much money and simply choose to pay rent. I even did the math on my house I live in now. Been here six years, paid something like $55,000 in mortgage, which is about equivalent amount of their rent (in a smaller place!), so if I sell mine today for what I bought it for I get at least $20,000 back (bank kept the interest on the rest), where as if I had rented then I get nothing of that back. Plus I don't have a land lord telling me I can't paint the walls, etc. I'm agreeing with Gene.


On another note. I formally made an offer to the guy. Should be interesting he will carry the loan. So I made a ten year term, decent down payment and decent interest offer that will put my mortgage payment right about where the renters are paying, so his monthly income from the property won't change for ten years if he takes this offer.

[DanStokes]

Good luck, Randall! Can I come visit after Bonneville some year (not sure if it will fit in this year's schedule)?

On the rent vs. buy thing. I have a bro who is WAY gun shy, having lost his butt on a house many years ago. Besides, he and his wife travel a LOT all over the world so they're often not there to maintain a home. I think she'd like a nest but Dave is sort of allergic to the concept. Not saying it makes sense but that's how he does it. If I hit the lotto I'll buy her a condo (in her name) and it'll be up to her if she lets Dave live there or not!

Dan

[TC]

Fixed it for you. Lots of people rent who could afford mortgage payments; they typically are not good at math.

That can be debatable..........Think of it this way, when you rent and something goes wrong, like an A/C system taking a crap or a sewer problem, you call the landlord and he takes care of it.....Plus you don't have to worry about the landscaping or repainting your house every so many years......Just think depending on the size of the house you get, an A/C unit and repainting the house could cost you $10,000 or more if you don't do it yourself. And then think if you need a new roof how much that is going to cost....... Plus if you lose your job and can't afford to make the payments you don't ruin your credit........Like one of my tenants told me that rented from us for 20 years, if something breaks you fix it and that was the reason he rents...........

[TC]

I know at least two people hung up on the commitment of that much money and simply choose to pay rent. I even did the math on my house I live in now. Been here six years, paid something like $55,000 in mortgage, which is about equivalent amount of their rent (in a smaller place!), so if I sell mine today for what I bought it for I get at least $20,000 back (bank kept the interest on the rest), where as if I had rented then I get nothing of that back. Plus I don't have a land lord telling me I can't paint the walls, etc. I'm agreeing with Gene.


On another note. I formally made an offer to the guy. Should be interesting he will carry the loan. So I made a ten year term, decent down payment and decent interest offer that will put my mortgage payment right about where the renters are paying, so his monthly income from the property won't change for ten years if he takes this offer.

If the owner will carry, make sure you have the payments run through a title company..........

[TheSilverBuick]

If the owner will carry, make sure you have the payments run through a title company..........

Yes it all goes through a local title company. Also, the guy owns the place outright, so he's not paying a mortgage company on it so not likely to run into a problem with me sending him a check and he doing something else with the money causing me to lose the place. The buck stops with him. Makes me feel a lot better about him carrying the loan. Him owning it out right was part of my motivation for throwing him a short term higher monthly payment offer his way since it won't decrease his monthly income from the renters.