SOLD! 70 Washington St CF featuring Lucy & Luis--a story about buying a Multi Family property & the ups & downs!
This is quite the story & worth the read, there are twists & turns. Lucy & Luis were referred by my past client Eric Tidd (THANK YOU!!) & they contacted me early January. We met at Sin Bakery (in person--remember when we could do that?!) & they had at least 100 questions & really put me through the wringer--it was great! No, really! I loved how prepared they were, the well-informed questions that they had, their clear determination & their plan.
Lucy & Luis have a plan together--they are going to purchase several more multi family properties over the next few years & they wanted to make sure that their Realtor would be able to not only help them through the process but also to help them to understand the market & how the numbers work.
We looked at A LOT of multi family properties. We put in SEVERAL offers (Lucy is super organized & is the Queen of Spreadsheets so she could probably tell me exactly how many offers & which houses). On March 25 we signed a contract for a 2 Family property on Manton Av in Pvd. It did not quite meet their goals but they felt they could make it work & I think that they were getting pretty frustrated by the market--multi's in particular get snatched up really quickly & because prices are so high it's difficult to find ones where the numbers work---PLUS we're competing with a lot of cash buyers right now.
We made it through Inspections, the Appraisal, & the Mortgage Comm----nope, we got an extension for the mortgage commitment. Why? Because in a weird turn of events the seller, who paid off the mortgage 13 years ago, did not have any written records of the mortgage being paid off & the lien was still in place so we could not get clear title which means no mortgage for Lucy & Luis. And we're in the middle of a pandemic so everything is shut down (we're mid-April in the timeline). Here's where it gets crazy. We submitted a Mortgage Extension which the seller signed but as that deadline was rapidly approaching with no sign of Chase Bank being willing to give the seller a letter confirming the mortgage payoff so that the lien could be discharged, Lucy & Luis began to really have doubts about this property. The listing agent wanted another extension. I encouraged a termination of the contract. Superstar Attorney Hugh Barry went directly to the Sellers Attorney & requested that the Seller sign the termination agreement---which he did. Here's where it's crazy---the Sellers Agent did not know that he was signing a termination & would have definitely advised against it & insisted on an extension.
Lo & behold a few days later--Chase Bank sent the letter. So then Lucy & Luis had a choice. But here's the thing--we looked at a 4 unit property that weekend & submitted an offer which we were pretty sure we could get accepted. Could we get out of the Manton Av contract--YES!!! We had a seller signed termination so they could not retain the deposit. Could they have moved forward with Manton Av if they had chosen to? Yes. So it really was the best case scenario by making sure that termination was signed by the buyers & seller.
But wait, this story doesn't end here. Let's move along to 70 Washington St, a four unit property in Central Falls, RI. Listed at $319k we were able to get it under contract at $315k. The property has two 1 bedroom units and two 3 bedroom units. Three units have current tenants & the vacant unit will soon by occupied by Lucy & Luis. It's in good condition but could use some cosmetic improvements in the units---the brown painted cabinets would be so much nicer if they were lighter, it would be smart to install vinyl plank flooring that looks like wood over the the sterile vinyl flooring that's better suited in a doctor's office from the 70's. We negotiated a $10k closing cost credit from the inspection results which frankly was about $5k more than I thought we'd get.
Did it close yet, Jess? This is a long story.........we're almost there. We were supposed to close July 17. Not August 11. And it's not uncommon for closings to get delayed but boy did this one drag on. Again, Superstar Attorney Hugh Barry worked with me to make sure that the Contract included language to make sure that the building is up to current Fire Code & that the inspection report be required for the sale (I didn't mention that the sellers insisted upon drawing up their own contract which did NOT include the standard boiler-plate requirement for Fire Code compliance).
Delay #1: The sellers (an investment company that owns 900+ rental units in RI & MA) scheduled the inspection at the last minute.
Delay #2: The Fire Marshall took longer to write up the report.
Delay #3: The property failed the inspection so the sellers had to make repairs/changes.
Delay #4: They had to schedule the re-inspection.
Delay #5: We had to wait for the report (again).
Delay #6: the lender is required to wait three days following clear to close.
Delay #7: we could have closed last Friday but the attorney's were both booked solid.
Delay #8: Monday was a holiday.
Needless to say, Lucy & Luis were pretty frustrated by the end. We didn't have any control over this timeline & so none of us (their Attorney, Lender, or Agent) couldn't really give them an idea of when this issue would be resolved. We were all very confident that it would be resolved--they were minor issues on the report--but the sellers weren't really in a rush, what with soooo many other properties to deal with. But today, after all of that craziness, we closed!
Did you make it to the end? Well I did & so did Lucy & Luis so CONGRATULATIONS! I'm looking forward to working on the next one with these two!
Buying or Selling? Here's some useful advice!