All Forum Posts by: Bill B.

Or they've dealt with one of the 50% of realtors that sells 1 house or less per year. The kind that can’t fill out a form, checks both boxes in an either or situation, and can’t be bothered to respond to calls, texts, or emails. Most of all, they just want you to buy something, anything, so they get paid. They want to be paid 5 figures or more but can’t be bothered to learn more than their customer. 

Is it big enough for your realty company to move there? Could it justify $6k/mo? (Then you have zero vacancy, your business controls its rent increases, etc.)

Rent out the garage to another small company. 

Good luck. 

You’ll have to adjust my US numbers to figure out how it works in Canada. But it looks like a horrible deal. 

Here it would be 25% down ($275k)

A balance of $825k at 7% (or higher) $5,490/mo, figure $250/mo insurance, $500/mo property taxes $6,250/mo. 

That means if you could get $6,250/mo, have zero repairs, zero maintenance, zero capex, zero vacancy, provide zero lawn/snow/landscaping, pay zero utilities, and pay zero management. You’d earn 0% on your $275k. 

That don’t sound too good. You’d need all those zero and $7,250/mo just to earn a 4% return on that $275k when you could earn more guaranteed in the bank. Maybe it’s only worth $900k. Or maybe it’s too expensive for what you want to use it for. Here you would sell to someone that can run their business form the home or the garage/workshop if that’s allowed by local code. 

I too am confused by the "It won't look consistent to the tenant or to the accountant." Comment. Dealing with the accountant first, who cares? Can you imagine running an STR with "consistent" rents? Dealing with the tenant second. If rents were falling in your market do you think your tenant would want to"consistent" rents? Or do you think they'd move out if you didn't lower rents?

You increase rents every year rents aren’t dropping. (Sell if they’re dropping.) Even if it’s only $25 (Minimum 1-2%) it’s expected. Have you ever had a year where your insurance or proper tax’s went down? I’ve been raising rents closer to 10% for the last few years and 5% is the lowest I can remember in the last 10. NOBODY, is moving over $25 or even $50/mo. If they move, they were moving anyway. Can you imagine taking a couple days off work, looking for a new place, paying for new applications, putting down deposits, renting a moving truck, finding friends to help you move, paying to clean your old place, and so on to “Save” $300/yr? 

Is it possible you’re guessing at rent? I’d suggest you call a PM or two and ask them 1) How much rent they would charge. 2) What fees they would charge you. 3) How long they think it would take to find a tenant at that rate. You might find that they could charge enough extra rent to pay for themselves. You may be managing the property for free, or even paying to do it. 

Lower the price to $700-$800k. See if you get ANY interest.
If not, you know it’s price. 

Try to get a cashout refinance. See what the bank thinks it’s worth.

Figure out what it would cost you to recreate it. (Land plus buildings. Hopefully existing as obviously new builds would be worth more.) The business part is worth nearly zero $’s more than the cost to recreate it. 

This reminds me of the people who wanted double the appraised value for their homes because of the STR business they were renting. They ignore that almost nobody wants to do this as a business. Those that do, want to start from scratch and wouldn't pay a premium. So they'd buy the house across the street and make it nicer.

TLDR: try lording the price at least $200k+ and see if you get any interest. Try to get a cashout refinance to see what the bank thinks it’s worth and how the business would perform with debt. Good luck. 

I’ve never even had an umbrella company so me about other members. Try USLI they were great until they limited liability at $1M if you have a pool. Then I switched to Madison.

1) I’d remove all items under $100 and the landscaping/vegetation items. These a things you could walk through your own home and find. It makes you look like you’re asking for a new build, not an existing home. 

2) Anytime you mention big items like HVAC/roof. If you’re asking for replacement figure out how much more the home would be with that being replaced and temper your request. (If you made an offer on a 20 year old home with a 20 year old HVaC and the inspector says it only has 5 years left. You knew that before you made your offer, it’s not a surprise. And if it had a new HVAC system they might be asking $5k more. 

If you don’t want the property use this as your reason to walk away. If you do, figure how many of these things you’d really fix, what that would cost, and how much of that you’re willing to cover. (Imagine if they had countered your offer at $500 higher, would you have accepted it? Most likely yes.)

As a buyer I might say something like these 4 major items add up to $3,500. I understand it’s an existing home, or older home, so I’d like to ask you to kick in $2,000 toward repairs I feel are necessary.). 

Of course as a seller I might counter with, No, please send your cancellation of sale paperwork and I'll refund your EMD. Then what's your play?

Ps. I have a buyer’s inspection of a home I’m selling on Saturday. And that’s pretty close to the response I have planned for anything that was obvious, in plain sight, or as minor as some of the things you listed. If they find something I didn’t know about and they couldn’t have, or safety related then I’ll consider/cover some of it. As obviously it needs to be fixed. 

They could sell them to “recoup” some of the downpayment. (Recoup means get back. So they would have to have the cash for the downpayment to begin with.)

If they get 5 individual loans this is EZ Peasey. Just sell and pay off that loan or two. If it’s a blanket loan they would talk to the lender ahead of time. Mention which properties they would consider selling. Then the lender would say that house is worth X% of the loan. So you need to sell for more an x% of loan or you have to give us more cash. Sell for more than that and you’ll get the leftover cash after paying off that x% of the loan. (So unless they sell for much more than they paid they will only get a small percent of their down back, especially after selling costs,) but you did say they were getting a discount. This is when they’d find out if they really did. 

A couple options… 

1) Coast as is until March for better selling season, more buyers, higher price. 
2) Raise the rent at least half way to market. Helps carrying costs while waitingg to sell and makes financials look better for investor buyers. If they decide to move out you can do the remodel. 
3) are the tenants in any kind of financial situation to buy the property? They may less sensitive to need upgrades/remodeling and avoid moving. 
4) get a backup/lowball offer from opendoor, offerpad, etc etc. Then you’ll have a backup plan. Heck, who knows maybe they’ll be acceptable. 

@Becca F. those are insane prices Becca. From what I coulda find you were already paying 22c/kwh in 2014. So your rates have doubled in 10 years, about 7% annually. (I couldn’t find if that was a nice gradual increase or mostly done in 1-2 years.) But….

You can see you’re being screwed over by the power company, or the government, or both. Peak and off peak shouldn’t be a 6% difference, it should be closer to a 50% discount.

PLUS, if they’re charging you 49c/kWh and solar is needed to SAVE THE PLANET. Why are they paying you 10c/kWh? Does that mean they’re paying 10c/kwh already and charging you 49c/kwh? (When I’m paying 11c/kwh I assume it costs my power company 7-9 cents?) Or, are they paying you less than they pay everyone else to discourage it?