All Forum Posts by: Edward Dean

Start talking to lenders. Figure out 1) is a HELOC or cash out refi better, and 2) with this $100k or whatever it ends up being after fees/costs for the refi/HELOC, what can I afford for my next property. From there you can create a budget and acquisition plan.

Not sure what the question is here but converting under utilized space into a revenue producing asset can be quite rewarding. You need to be clear on what the rules and regulations are in your area to make sure you can actually do what you want to do, and vet your contractors carefully so you are not wasting time and/or money. Overall, garage conversions or splitting a larger property into two units can be a great way to turn a meh return into a great return but you need to run your numbers and make sure it makes sense for you. In other words, run the numbers for both the cost for the conversion and expected revenue increase once conversion is complete, and compare that to other options in your area like buying a rental property.

Best of luck!

It depends. With tenants in place you theoretically get instance revenue on day one. But, you didn't vet these tenants and depending on how long they have been there/how frequently the prior owner raised rents, then the rent they are paying may be under market value. You can mitigate some of this by seeing if the current owner has their applications, credit checks, background checks, etc., still on file, and if they can show bank statements that show rent is being paid, etc. but you still take some risk. 

With a vacant property, you have to go through the trouble of filling the vacancy but depending on the area and demand that may not be hard. And, you get to pursue current market rates. If you are looking to value add by renovating then vacancy can also be a plus because it is easier to get in and do the work without a tenant in there. 

Tenants in place can be a good thing but, depending on your goals, you'll likely find there are more advantages to starting fresh without tenants in place.

Best of luck!

This is probably a situation where speaking with a landlord tenant attorney would be beneficial.

If you are calling the listing agents to try and have them represent you remember 2 things, 1) not every state allows for dual agency (where one agent represents both the buyer and seller) and 2) even if it does, why would that agent, who already has a relationship with the seller and a fiduciary duty to get the seller the best deal they can, turn around and help you get the best price you can? Dual agency rarely works in everyone's favor. You may be better off interviewing some buyer's agents who can represent you. Talk with other investors at RE meetups to see who they use/would refer or how they are getting deals.

For strategy purposes, assess what your market looks like and find a niche. If you are looking to get properties for under the asking price, then don't shoot for the super cute house that has a line out the door for the open house the first week it is on the market. That type of home will be more likely to get multiple offers. Try instead to find properties that work for you but are getting overlooked by other people. Could be homes that need work, maybe have a funky layout but is a layout that is great for splitting into a two unit property, etc. It also usually helps to have a reason why you are offering a low offer that you can articulate to the seller/listing agent beyond just "I want it for less than what you are asking". What I mean by that is you can use the condition of the home, the layout, what other homes in the area have sold for and why this home is the same (if it sold lower) or different (if it sold higher) or whatever other information you have at your disposal to show why your price, even though lower than what they are expecting/asking, is a good deal for them.

Read books like Never Split the Difference to help you further with strategy. It is not great for multiple offer situations but it is a good read for one on one negotiations. 

Best of luck!

Sounds like a good time to read your contract(s) thoroughly to see if there is more than just that one line and talk with an attorney to see what your options are.

Best of luck!

You want to make sure you are properly accounting for capital expenditures, repairs, all utilities, taxes, management fees, etc. What's the condition of these places? You mentioned they are remodeled inside but how is the HVAC, the plumbing, the roof, etc. When you get one of these into contract make sure you have a good property inspector and/or contractor you trust to look these over to give you an idea of what needs fixing now, soon, and down the road and make sure you have money set aside for those things when the time comes. This should be done during your due diligence phase before closing. You mention tenants pay gas and electric but who pays water? On $600 a month even $100-150 water bill can be a pretty serious hit to gross revenue. What does the neighborhood look like? Class A, B, C? Should you expect a lot of turn over or tenants who don't care for the property and are likely to cause more damage? 

Just a few of many things to consider. Best of luck!

Price is the strongest driver. That said, talk to your realtor about what the feedback has been though as well. Are you getting showings but no offers? No or very few showings? What does he/she think the problem is? Is there a smell or loud neighborhood noise or some obvious flaw that doesn't show in the pictures that she keeps hearing as feedback? Or are you still well within what the average days on market are for a property like this in your area? If it usually takes 90 days or something like that to sell a house at this price point in your area then you might be right on track at only days on market. Either way, try to look at the home through a buyer's eyes to see if you notice anything you can do to make it show its best.

A few things you can do to boost the property online are have 3D walk-throughs and video of the property. These are things that realtors in my area generally pay for out of their pocket but it may be different where you are. They can also hold open houses and pitch the property at broker caravans. See where else and how your realtor is advertising it. At the end of the day though price is almost always the main driver. If it has to go now then a decent price reduction will probably do the trick. I would not hock it to a wholesaler though unless you are desperate since you'll very likely get more from a traditional buyer.

Best of luck!

Why not find a property that could work as both? Go in with a goal of fixing and flipping it for a profit but make sure it would also work as a rental so you have a plan B (bonus points if the deal works as a short, medium, and long term rental). That way if the market moves on you or you go a little too heavy on your reno, you don't have to sell at a loss. You can rent it and then sell it or refi your money out down the road.

Best of luck!

I second what Bryce said, check what the rules are for adding ADU's/second units and start pricing that out as a plan B. Also, start speaking with real estate agents in that area and see what they have to say. Maybe that area just does not have a lot of multi-family properties or maybe their MLS does not share data with Zillow or something along those lines.