All Forum Posts by: Garry F.

I am MAD! I just found out that a listing I made an offer on sold 225 days later for 7K (2%) more than my offer. They didn't accept my offer because they were overpriced so my offer seemed like it was a "Low Ball" offer at the time. Then when reality kicks in and the seller comes to their senses I miss the deal because I was the first one.  

My Story: I am looking for another rental. It just so happened the house next door to my current rental goes up for sale. I was really interested but sad to see that the owners priced it TOO high. But I made an offer based on reason and not emotion. The agent gives me the finger for my "low ball" offer. The property gets no action for 200 days, even when other places are going in days. The price dropped marginally every 30ish days. I was waiting for one more price drop to start discussions again and bam! The property went under contract and sold in less than 30 days. I found out once it closed that they sold for 7K more than I had offered. I would have easily paid that if they would have negotiated. Live and learn. 

I am a newer investor and this happens to me a lot. I am the first one to bid on a property and my price is a lot lower than asking but it's always very close to the final sales price. I can't be the only one that experiences this, Is this something that I have to live with or are there tricks and tips you could offer when dealing with sellers who have priced too high?

The Numbers:

Original Listing Price: $374,500

Final Selling Price: $307,600

My initial Offer (on Day 2): $300,000

Comps: $285K-$300K

4 Price drops. $360K, $345K, $335K and then $325K. 

Agree with Andrew above. 

My 2 cents: All Lenders have different standards. You should have multiple lenders depending on the loan you are getting. i.e. I have a lender that only gives "vanilla" loans and he has the best rates on our primary house. Then there are lenders who do loans for REI and they understand the risks involved with rentals. Most of them have a 2 year requirement. This is to show you are more than a dreamer and that you can handle being a landlord.

Disclaimer: I consider myself a novice in all things REI but I love to read and talk to everyone.

I am familiar with UT area. Now I will probably say the one thing that 99% of investors say NOT to do, get emotional about your investment, but I Love the old house charm. The prices look great but beware of the cost of renovating. Every time I start a project it never hits budget because old houses always need more work. 

Also, if you are familiar with the UT area, previous owners love to think that they are "handy" and do a DIY with no budget at all. I have seen so many partial renovations or nonprofessional renovations. Make sure you add 20-30% more cushion to your budget if you see something like this.

Make sure you ask the county for a list of the permits pulled on the property and confirm the zoning for the property. Due to the age of the properties there are non conforming properties that make major renovations very difficult and you don't want to pay more for these properties if you lose the status when you do a major renovation.    

I use Venmo to collect and then transfer to my operating account used solely for my rental. My rental is in a college town. I rent out each room. Average age 22. This is the easiest and fastest. It is free. Occasionally there is a parent that pays rent for their kid and Venmo is quick and simple because it is all digital transfer so none can do it from anywhere.