All Forum Posts by: Brock W.

All,

Just to follow up. We sold the house. Net profit was about 10K.

-Brock

@Ed L., @Stephen Masek

Thanks for the input.  

As an update, I've already decided to sell the place. I'm not saying anything else yet, But I'll keep you posted. (Don't want to jinx it)

The easy money to be made buying in the greater PHX area was 2010-11.  There are still some deals, you just have to look really hard, and know the area well.

-Brock

While I appreciate you guys schooling me on lease options and other related items, I think we are digressing off the original topic. (thank you for the info though)

Can anyone look at my original post and tell me if my logic is sound?  Am I missing something important?  Am I making faulty assumptions?

Like I said, I'm new to this. Any 'sanity check' from more experienced people is helpful.

-Brock

@Clary Roberts

Yes, I graduated from there several years ago. I just use it for my profile because it's a good picture.

Brock

@Thai Foo

My mortgage (like many, if I understand correctly) has a "due-on-sale" clause. They can call the loan if I transfer ownership of the property. Mine mentions "any contract to sell or transfer the property,"  which is what a lease option is.

@Brian Gibbons  I'll check that out, thanks.

@Clary Roberts

Welcome! glad to see another zonie.

I'm curious as to your opinion about the RE market in the general Verde Valley area. I like the area just based off my liking for the AZ wine industry.

Regards,

Brock

@Alfonso Inclan

I read up on lease options and rent-to-own contracts. Interesting stuff. Unfortunately, the terms of my mortgage prohibit them. The lender considers it a transfer of the property.

So I'm back to selling the place outright. But I have several months to decide.

Thanks for the input.

Brock

@Alfonso Inclan

Hmm. I didn't know much about lease options until today. I had to look it up after you mentioned it.  :D

Not a bad idea. I'm not sure how to find a tenant to do that. I'll bounce it off my realtor.

I do know that my prop manager asked the current tenant if he had any interest in buying the place. He declined.

Brock

@Fred Conway

Funny you should ask. I have another thread going about whether or not to sell my property that has a negative cash flow. That would make my business as a whole more profitable.

Mainly I'm researching market rents. I'm considering raising the rent on another property because I am charging well below market rent. However, I am hesitant to do so because it's been the same tenant since I bought the place 4 years ago, and she is a good tenant. I may just raise it some, but keep it below market.

Brock

Hello BiggerPocketers,

I'm seriously considering selling a SFR, but want to get a sanity check from you.

The property: 1150 sq ft, 3/2 detached home, 2 car garage, Estimated value $140K-$145K

The money: 2 years into a 30 re-fi, current principal = $128.5K

PITI: $809, HOA: $58, gross rent: $950, management fee 8%, city tax; 1.75%

So rent minus deductions is $857 - $809 - $58 = ($10) monthly cash flow.

That assumes no repairs or vacancies (LOL). If I add some money into my spreadsheet for repairs and/or a vacancy, they still look bad even if I up the rent $50.

The place currently has a good tenant who just renewed for a second year. Their lease is until next spring.

The dilemma: 

1. Hold the place and hope for rising rents and/or market appreciation

OR

2. Sell the place when the lease is up and possibly only break even on what I owe.

I'm leaning to 2. Why?  I'm assuming that rents will not climb significantly in the area. We also seem to be past the big market appreciation that PHX has seen since 2011.

So folks, I'm trying to "trust the numbers". Do you think my reasoning is sound?

Brock