All Forum Posts by: Eric Morel

I would give incentives when they resign.  Let's say you are charging $1000 and market goes to $1200.00. For revery year, they get a discount off market.  This is similar to what apartments do.   In this case I would raise to $1100.00 or have a preset formula.  If they look elsewhere they should see you are still cutting them a deal.  

You have to have good credit and DTI under 38%. It will require 15 to 25% down.

This explains why it is priced too high. They are pricing on rents they think are going up. if it is renting at 900 why not use that for now.   If they think it is 1000.  Then pricing at 340k is reasonable to them.  Doesn't sound like they are using comps or current rents to sell this property.  Thus on the market for 100+ days.

If it is over market price, this is probably why it has been on the market. The biggest red flag is the realtor is not justifying the high offer.   The other post I agree with is maybe the rents are not 1000 per unit.  I had my realtor forward me a potential deal that I was told rented for 1100. After I did some research, that was the median rent for the area not the rental for the unit she was showing me.  The rent was more like $700 per month which the unit barely cash flowed.  I passed.  I would look to get proof of rent like rent roles or ledger or something to show that rent.  Also, I wouldnt offer the offer price.  I would go with the market.  Once you confirm it does indeed rent for 1000 per unit, formulate your offer based on market.  You could start a little low and see if they counter,  The person that did the rehab could have overpaid or over updated.  Trying to force a deal and find a sucker.   

Without the rent verified and without getting it for a reasonable price I would pass.

@patrick 

@Patrick Bavaro Due to my capital availability, I am going to go against turnkey providers. I am going to have to determine what level of rehab I am comfy or find lower priced properties that may just need slight updating.

I may not be the best source, but I would pass unless I could get it at 150K or cheaper. I did not do a rental review for that area, but assuming the 1500 rent on this one.  I want it close to 1%. I am not comfortable doing STRs yet, so if you were thinking that also, I would not have input for that.

1st thing 1st.  This is coming from someone who has downed himself for years.   It took me hitting rock bottom a few years back.  I called myself a loser, viewed myself as less then others, and settled for less then I deserved in all areas of life.  Please refrain from using negative comments to describe yourself.     The 1st time you make a mistake which we all do.  It will reenforce that view of yourself.  You are not a loser.  You are just careful to prepare prior to action.

I am also in the starting gates and have hit a few challenges to get my 1st deal.  It has not deteored me which it would have a few years back.  I know my goals and those goals drive my decisions.  I may be to stubborn and narrowminded and missing opportunities now, but flipping homes doesn't meet my goals for example.   I know what I want to do.  Just may not be able to start doing it for 6 mos from now.

You got this!!!!!    You are a winner!!!!

I think your financial situation will dictate a lot on your direction. I have funds, but by no means am I loaded. Thus, I am choosing the SFR with a LTR strategy. Plus my passion is finding ways to protect affordable housing, so looking for 1 per cent homes. Most of these are affordable homes and rent where they will cash flow. Giving up some appreciation on paper, but feel we cannot predict that part anyway.

I will hold my payments rents, and expenses in a LLC checking account. The net profit will be invested in a LLC investment account. Hopefully will add to the growth.

@Greg M. How is an affordable housing crisis BS???? Just because people purchase or rent doesn't mean it is the right financial move. Sometimes it is the cheapest place they can find, but still stretches their budget. If affordability was not a thing, why would banks determine that when they lend by looking at DTI. For conversation sake. The average income in the US is $30,000 per year. The average rent is $1100 or so. The $30,000 s gross. So more like $25500 per year in money available. Let's assume that health insurance is $2500 per year which is 1/2 the yearly. That leaves 22500. Let's take the average rent. That leave 9300 a year to live on. This has to cover transportation, food, utilities, etc. Since 2019, have you tracked inflation.

Even if this responsible person put money in the savings account.   The pandemic would have eaten into that.   

I am glad you know the business, but we do not have a business without people to buy homes or rent homes. Thus, you may want to research the affordable housing crisis in this country. It is real not an imaginary unicorn that you think it is.