All Forum Posts by: Dan Deng

I have come across a property that an owner approached me about purchasing off market with no agents because they do not want to pay the realtor fees. As I have never done an off-market purchase before, what steps do I need to take to make sure this is done properly? Can I just download a California Real Estate Purchase Agreement template from online, fill it out and move forwards with that? Is it more complicated than this? I know I will have to find my own inspection company(s) and the like but is there anything else I need to think about?

0 Votes

San Diego, California

Quote from @Robert Schwaner:

have you considered renting it out on Airbnb, that is what i did with my home when i moved away and it turned out to be the best investment decision i have made. If I were you I would at least go to data.rabbu.com and punch in my address and bedrooms to see what you might expect to make. Ann arbor is actually a fairly well visited place so i think you would do pretty well as a full time rental, be sure to look at the top 75% of airbnbs and not just an average for your address because the average includes a lot of people who only airbnb their property sometimes. Best of luck!!!!

I have looked into Airbnb but I cannot find many in the area who can property manage for me as I will be far away. The other thing is that I was told from the one who do Airbnb that the average revenue will be lower than long term renting. However, the number from data.rabbu.com seem to be a lot high ($5k monthly average) which I find hard to believe!

0 Votes

Ann Arbor, Michigan

Quote from @Max Reynolds:

Dan - my recommendation would be the following:

- Confirm with your insurance agent what exactly your price change in insurance will be so that you can better understand your monthly payments will be.

- Complete a rent survey yourself because that is way too big of a range. Check Zillow, apartments.com, Craigslist, and other marketing platforms to look up and see what is available for same number of bedrooms, similar SF, and similar renovations (excluding powerwalls, etc.). Call each listing to see what the leasing activity has been like and create a list of those properties to follow up with after it is leased to confirm what price it leased for.

- Vet each listing you call to see how active that agent/property manager is in the area to see if they are the most qualified to rent your house out for the highest price. I know you have already talked to other agents but see what those you call have to say about their pricing for your home and if the fair market rent you came to a conclusion on is feasible. Keep in mind that unless you are actually considering using the agent/property manager to market your home for a future sale or lease, they might be a "yes man" and be agreeable to get you off the phone if they feel they are providing free information with no opportunity to work with you.

- If you are at or close to a break even and are in the financial position to do so, I would hold onto the property. At such a low interest rate, majority of your payment is paying down principle. Additionally, you benefit from appreciation, depreciation, and other tax benefits that come along with owning real estate. No one has a crystal ball but IF rates drop next year, your home value might increase (don't know the supply/demand in your market) and if so, might be a better time to sell if you choose to.

- I am wary of CD's because you are typically locked in for extended periods of time and the return is not all that great. My savings account currently pays me 4.3% where as a CD I bought last year is only 4.5%. What if you come across a good deal on a property you want to buy but your funds are tied up in a CD? This happened to me and wished I had more liquid funds to put into the deal.

Now, I don't fully know your situation/market and can't give tax, financial or legal advice but this would be my real estate advice and personal opinion if I had the same situation here in San Diego.

Reach out with any questions about the San Diego market.

To give a little more detail, the reason why the rent amount has such a large range is because in the last 12 months, only 9 properties of 3000+ Sq Ft (Mine is barely over 3000 Sq Ft) rented. The range of rents was as I posted. I will say that mine is more similar to those on the bottom end of the range since I have a relatively older home (One was a brand new build rented out for $4000 same size). Right now there is only 1 house in all of the area for rent with 3000+ sq ft and they are nearer to downtown asking $6,500 which I don't think is comparable to what I have. Because of this, I don't think there are really any agents who are "actively" renting out homes like mine. All 3 of the agents I spoke with have mentioned that this would be called an "executive" house which does not have great supply or demand.

Only reason I mentioned CD was to park the money somewhere guaranteed safe with growth. However, you are right that maybe the absolute right house comes onto market that I really want and don't want my money tied up. Probably then will just put it into a high yields savings account.

0 Votes

Ann Arbor, Michigan

Hello All,

I have decided to come to the BP forums to ask for your advice and or thoughts on my current situation. I currently live in Ann Arbor, MI and own a primary house here. Due to a new job offer, my family is moving to San Diego, CA. I currently own a house in Ann Arbor which we purchased back in 2019 for $550k at a 2.1% mortgage interest rate over 15 years. It's now worth almost $700k. Normally, I'm sure most people would sell their house so they can put the money into a downpayment on their next house. However, I'm in a fortunate situation where I will be able to move in with my parents for at least the next 2 years so I don't have to purchase or rent a house in San Diego for a bit. Now for the dilemma:

I really like my house I purchased and put a lot of money into the house not cosmetically but upgrades that I wanted like solar panels, 2 Tesla Powerwalls and a BRAND new super efficient heat pump and 99% efficient furnace. Unfortunately, these upgrades do not improve the price of the house nor are typical things that new home owners are looking for especially in Michigan.

I am trying to decide whether I should sell my house and put the money in a CD until I'm ready to buy a house in San Diego or to keep the house and rent it out. Houses of my size and type are not commonly rented in Ann Arbor and the rent ranges I got from a local real estate agent ranges from $3,100 - $4,500 based upon when and how new the houses were. My current cost for the house is about $3,700 for mortgage + insurance + taxes. Thus the house will likely be cashflow negative once you include cost of maintenance and increased costs for insurance and taxes due to no longer being homestead. I'm really reluctant to give up a low interest rate.

The way i see it... I have 4 possible options:

1. Sell the house - Save the money on a CD (Or something else similar) until about 2 years in the future
2. Sell the house - buy something in San Diego as soon as possible
3. Keep the house and find a long-term tenant for it
4. Keep the house and find a long-term tenant, sell in 2 years then buy a house in San Diego

So, anyone want to give me their take on what they would do if they were in my situation?

3 Votes

Ann Arbor, Michigan

Hello All,

I'm looking to get into Real Estate and wanted to reach out to a CPA that is knowledgeable and investor-friendly to help plan out what is the best path forward and will help me build my team. Have any suggestions around the Ann Arbor area?

1 Vote

Detroit, Michigan

All Forum Posts by: Dan Deng

Dan Deng has started 3 posts and replied 5 times.

Post: Potentially buying an off-market property

Post: Unsure what to do with my current primary residence

Post: Unsure what to do with my current primary residence

Post: Unsure what to do with my current primary residence

Post: Real Estate Investor Friendly CPAs near Ann Arbor