All Forum Posts by: Harrison Harner

Welcome Didier. I'm in Danbury as well. 

I focus on buy and hold. I bought my first property last February and am gearing up to buy a second this year. Let me know if you have any area-specific questions and we'll see if I can help you out.

@ Guy Gimenez

Thank you, Guy.  This personal advice is valuable for piece of mind. I had that very view until my mortgage broker made me second guess it. I will stay the course and chalk it up to an expensive lesson learned. I'm sure it won't be the last.

@ Joel Owens

The property was never on the market. It was found through a direct mail campaign. I was simultaneously looking on the MLS for a deal as well, but am not buying a listed property.

The property is a duplex for buy and hold.

The agent's commission is not written into the contract at all. I am getting a loan, but planning to pay his commission out of pocket.

I agree that the money is not worth a falling out. I appreciate the advice.

Hello BP,

I have my first deal under contract!

This is a great feeling, however something was keeping me up last night...

I have a buyer's agent, but my current deal is a private sale that I marketed for and found. The agent is a personal friend (I know, first mistake) and set me up with access to the MLS and showed me a property. I was simultaneously sending letters to owners of unlisted properties in order to find a deal, which he was aware of. When I did find a deal this way, he was disappointed , especially after having a couple other friends go to other agents in the last year or so. I told him that since it was my first purchase, I still wanted him on my team to help through the process and that I could still pay him his commission.

He provided me with a standard contract and set up an inspection. I've handled everything else. Now I'm having second thoughts about the value of this arrangement. We don't have any sort of written agreement and my mortgage broker says it's best to drop him altogether. I think he has done some work and deserves some compensation, but I don't think I could help but be bitter about handing over $3,600 for this service. 

What additional help can he provide at this point? I'm inspecting the house on Wednesday.

What would be a fair price for something like this?

Is this affiliated with the SoCT REIA? I got an email about another meeting at the Fairfield Public Library tomorrow.

@Mike Moles : Thanks! The $2700 is the scenario if the whole property were rented out. Ultimately, I'd like to own multiple rentals and live in my own single family at some point, so I figured my analysis should be based on that, as long as I can afford the scenario of living in one unit.

I did some further research and determined that the property is worth about $240,000. I also spent most of the day researching issues with buying property with unpermitted work, because the owner disclosed to me that the finished basement and partially finished attic were as such...a-whole-nother can of worms.

I called the seller today and asked what he was thinking on price. Basically, he's underwater and wants to sell for more than he paid. Not motivated. He's waiting for 2007 to come along again so he can get $400k. I thanked him for his time, told him I didn't think we'd be able to make a deal, and offered to set him up with my realtor if he wants to list it.

Overall this was still very worthwhile. I learned a lot. It was both the most exciting and nerve racking experience I've had in a while. I can't wait to talk to another seller!

I guess I don't have a good answer for why it's only 6 times gross rent. I was basing my analysis more on getting the cap rate above 8% and cash flow for each unit between $100 and $200. I do understand that he won't give a damn about that. Market analysis it is.

He didn't indicate that he's underwater. I wasn't sure how to bring that up without coming off offensive. I'm meeting with a private money lender this week, so I may be able to go that route and then refinance.

I will be living in it and have pre-approvals for the loan shown.

I'm currently living with my finacce's parents, so I do need somewhere to live, but want to do it from an investment perspective.

I'm currently looking for a duplex in Danbury, CT for my first piece of real estate. I sent a small letter campaign to all the duplex owners on a street and got a response on one! The owner wants to move to Florida within the next few years, but said he would sell "for the right price".  

I met him and toured the whole building today. It doesn't need any immediate work. We talked income and expenses (though his book keeping is lax), but didn't discuss purchase price yet. I'm wondering what my next move should be. Should I send a letter with an offer detailing the reason with analysis, or call and make a verbal offer?

My analysis is as follows (The spreadsheet might be familiar if you've read Introduction to Real Estate Deal Analysis):

I think it makes good sense to offer $200,000, but from the tax records, I know he paid $370,000 back in 2003. The "zestimate" is $237,000, and although I know that's not always a good assessment, it seems pretty close based on the limited comps I see on the MLS.

If I had to guess at the response I'll get, it's something along the lines of "This seller is not motivated enough. Make your offer and then 20 more offers and one will stick." But, of course, I like to check in and see what those more experienced have to say.

Thanks!

 This sounds like a good way to go. I'll look for something along these lines. 

As for paying for paying for the repairs, is a separate line of credit my best bet?

I really like that idea, but my down payment and pre-approvals so far are pretty meager. (About $12,000 and $175-200k respectively.) It doesn't appear that I can afford a multi-family in the Danbury area.