All Forum Posts by: Bill B.

Ps. California has a “2+1 rule” meaning 2 adults per bedroom plus 1 extra adult. I don’t know if they’re breaking the law or you are. But I’m sure you’d be held responsible if something happened because of illegal overcrowding in a property you owned. 

How much more could he sell it for if you backed out and he did those repairs? I assume you’re not saying that $58k will add ZERO value. You can certainly ask but I would assume anything about $20k is hard no. I can’t believe he gave you the $12.5K on top of the $20k closing gift. Add that to $29k in commission and they’re already out $50k. 

I assume it’s renting just fine as is. You aren’t buying a new home. USUALLY, 60-80% of inspection “problems” are things you wouldn’t fix on your own home if you lived there. And you asked for 100% of the items to be fixed?  Safety items sure, but those should be fixed because tenants are currently living there. I understand the world is your oyster when you’re putting $0 down. But I can’t believe they’re even entertaining the offer. The market must be tough for sellers. 

TLDR: if you’re looking for a reason to bail without losing your deposit, bail. I assume it was way overpriced or the area is crashing if you think $50k in repairs will add zero value. Get out now. (All this is assuming for the first time ever, 100% of the inspectors problems were real problems and you’re not over reacting.) 

Good luck. 

Read the the state and local landlord guides as well as the fair housing laws. One violation will cost you more than you can even imagine…

Do you have a written down list of qualifications that EVERYONE will have to pass. 
Do you know if you must accept the first person that passes the qualifications?

Do you know the difference between a pet, an ESA and a service animal?

Do you know what questions you can’t ask, what reasons you can’t use, what market rent is, etc etc. 

I understand it’s a huge risk of violating local, state and federal laws to save $100 or $200/mo but how else will you learn what’s illegal. Plus especially valuable when your time isn’t worth more doing something else. Good luck. 

Ps. Please tell me you hired a professional photographer and didn’t use cellphone pix. 

Another solid argument for max rent cap increases every year. Somebody was a “good guy” for too many years and now it’s coming back to bite them. Why would they ever move out, heck their kids will pry be there in 20 years if you’re 33% under market and increasing every year. 

Next time just charge market rent and gift them $6,000 at the end of the year, every year, like Santa. That way you can keep up with market rent increases. (Plus it becomes more obvious what the gift costs.). Good luck. 

A good guy to who? Their competitors don’t know or care. The person losing their home doesn’t care if it’s bought a charity or the devil himself.  Heck, personally when they go to sell I’d be less interested in buying from them.  It’s obviously a flip. Either by someone more interested in coaching than real estate and might cut corners (to make their coaching numbers look better.) Or doesn't know what they’re doing. 

Either way. No. It's not called that to be the good guy. Either an LLC they already paid for, or a form of advertising would be my 2 guesses.

How much less they paid doesn’t matter. If they had paid the previous sellers $100k more, would you want to pay $100k more? The property is worth what it’s worth. 

I don’t know when hvac/furnace/water heater become “not new”. But obviously we all agree 6 months is still new. Is a year or 2 year old system new? Probably depends on the age of the property. When I sold a 17 year old home I advertised it as have all new appliances/hvac 4 years ago. Now I stated a time, but basically what all new meant is not 17 years old, about to fail/updated. Obviously you and your inspector both knew the age of the water heater and furnace/hvac when you walked through the house. The dates are right on the equipment. 

The duplex question is harder. Not a “Legal duplex” can mean 100 things. The most common are 1) it’s currently and forever illegal for you to rent it out to two unrelated parties and have two addresses. 2) it’s illegal to do that unless you do “x” (pay the city, add a seperate entrance, whatever. 3) it wouldn’t be legal to be a duplex today but it has been and there fore is “grandfathered” in. 1 is a big deal, 2 is a small deal, and 3 is nothing, a non-issue. 

Obviously if you just want out of the deal you use your inspection contingency and walk, you obviously haven’t waited for that to expire before asking for help. If you did make that mistake as well as the others you can try to weasel out under the duplex issue if it’s problem 1, or maybe problem 2, but most likely not problem 3. Lastly, you simply say “I’m willing to walk away from my deposit and lose it if you don’t fix A or reduce the price by B…”. You don’t spend hundreds of thousands to not lose $5-10k. Especially if it can’t be a duplex and that was your plan. 

But what they paid doesn’t matter in the least. Again, if they had paid the sellers more than they were asking I doubt you’d offer over asking price. And if the “new stuff” is less than 4-5 years old on 20+ year old property I’d let that slide, although that’s the 1/2 life for most water heaters, you could ask for $700 off for half of a new one. The only “biggie” is can you use I as a duplex. If not, walk. If so, in 10 years if you buy you won’t even remember this issue. If you don’t you’ll think about how you could have bought it for $100-$200k less than it’s worth then. 

Good luck. 

It sounds a lot like the lock in effect is still in effect, as it obviously is. But too many “news” sources already declared it over, or at least ending. 

80-90% of sellers are buyers? What’s the motivation to pay 50% more for a home priced the same, or 100% more for a slightly more expensive home? You HAVE to be moving, combining households, or some other life event that just isn’t happening that often. 

If housing is at all time unaffordable levels, what do sellers need to buy a new place? All time high selling prices. Can’t get em? Can’t move. Property either sits on the market or gets taken off and they stay put. As Jay said the only people who can switch house at “almost no cost” (5-6% selling costs?) are people selling paid off properties for something about the same or cheaper. 

if prices are going down, there’s no incentive to quickly sell for anyone that’s going to buy another property. “Oh no, housing prices are going down. I better sell my home quick, and buy another one…”

Google says a “structured sale” is just an installment sale that involves an annuity company in the middle as opposed to the seller extending credit to the buyer…

Google” A structured sale, also known as an installment sale, is a method for selling an asset and receiving payments over time. The buyer pays the seller in full at closing, usually with cash or a loan, and then the seller redirects some or all of those funds into a structured annuity. The annuity company then makes scheduled payments back to the seller over time. This allows the seller to defer capital gains taxes by spreading out the recognition of taxable income over a period of years, rather than recognizing it all in the year of sale”

the way either works “in the place of” a 1031 is simply is simply to spread the recognition of the capital gains over several years to keep you out of higher tax brackets.    
. 
This is not why I used a 1031 exchange. I used it to defer the taxes completely. Personally I would never use the scheduled sale because the tax brackets are so large these days and my gains per property are not in the millions of dollars. 

Good points above. 

You probably can’t charge more. Do you plan to know more about the owner’s goals and other investments than the owners? Are you going to be a fiduciary for the owner? If you are a fiduciary are you going to recommend they sell all the properties you’re managing for them and do a 1031 exchange to a better market? After all most PMs are not in their client’s best choice of markets. 

I would assume anyone that wanted that service would pay an advisory who was required to be a fiduciary, and probably already has one. OTH you can certainly print out some reports showing performance compared to last year and market averages. At least for those that have no accounting software and don’t use CPAs. (Another sign that charging for anything is going to be a hard no for most clients. )

I was going to say good luck. But then I thought of a “better idea”. Email your clients… 1) is this something you’d be interested in? 2)  would you be interested enough to pay? 3) how much? You gotta be careful you don’t get just a couple people sign up and you have to pay for people, licenses, education, certifications, insurance and so on to service a handful of people. Now.  Good luck. 

What kind of psychological “trick” are you going to play through your realtor, and then their realtor? You’re more likely to piss them off and cost yourself the deal or pay a higher price. Again. Imagine a trick a buyer could play on you through two realtors. Heck, imagine a trick they could play on you directly. Would you see it if someone tried to play it on you? Of course you would. Would that make you want to give them a discount?

You haven’t noticed how easy it is to see a fake or a liar? This isn’t how you get a discount. Have you noticed you’re surrounded by experienced experts and none of them have suggested any “tricks”?  There’s a reason.