All Forum Posts by: Hollis Cook

Thanks Colleen, that is pretty much exactly what I did. One found a great place by total coincidence and some really great Karma that came back to her. The other was furious, but calmed down when she found a Senior place that she's beginning to realize will be better for her in the long run. I have a marketing idea I'm going to throw out there in a separate post and will tag you for your take/advice on it. 

I have a similar problem, but in reverse. I'm the too-nice landlord who put too much value on long-term tenants (aka LOOTL = Live out of Town and LAZY) and neglected to raise rents on one of my properties for years -- two single family homes on one lot, now both on month-to-month.

That they have become elderly along the way and that one tenant lost her husband and now relies on the other for transport makes it all a night-mayhr. One is underpaying by nearly 50% and the other by around 40% -- it's in Palm Beach County, Florida and I really wasn't paying enough attention. Now I want to sell, and the problem is smacking me in the FACE.

Regardless, and my question... would you have preferred the previous owner to have raised the rents, even if it meant one or more units being empty? (In my case in a very active rental market.)

My very experienced realtor is quite adamant that I give them notice of a significant increase on a 1-year lease, take it or leave it. This would bring the rents to "moderate" compared to the market, but still $2-300 more than they're paying now.

The highest value I can get is with it empty, so the general opinion I keep getting is, "They've gotten a great deal for years, they're not your problem, give them a chance to stay, list it and move on."

Thoughts?

Interesting... personally I don't care for "coming together" tenants. #2 seems like the "he" and that he may be prone to leaching of the more responsible #1, which seems like the "she". My caution would be that people rarely change, the honeymoon may end and she, having the better stats, may be the one to bail, leaving you stuck with the lesser of the two candidates.

Purely anecdotal-opinion, of course, and possibly it comes to mind because it just happened to my landlord-neighbor. 

My best tenants have always been older singles or older married couples that have been "together forever". What I would do is to broaden your search, try word of mouth, possibly church bulletins, etc., a "Unity" church is a good resource. Also try nosing around your local Town offices, Veteran's groups, and don't forget the Sheriff's Dept or local PD. And if you have pets, another quirky but great resource can be your veterinarian. They know a ton of people and often have a pretty good bead on who is reliable, especially with your allowing non-aggressive dogs. (I have a 12-year tenant I found at my vet, btw ;)

Best of luck!

Always call not only the current landlord, but more importantly, the landlord prior... sometimes a current landlord will give a good reference to get rid of a bad tenant. The prior landlord is a better bet. Also, cross check the applicant's current and/or previous address to the tax records to make sure the landlord reference does in fact own the property, and is not just a friend claiming they are a landlord.

Originally posted by @Sarah Borduin:

Make cash offer then finance after to make yourself competitive, close the deal and then line if credit will win yourself deals.

Agreed. Cash sitting is doing nothing, use it as leverage, then pay yourself back.

Originally posted by @Jill F.:

@Farakh Zaman I'm from the space coast area and I spend time in the area each winter.

I spent a little time looking at properties there last winter and found the market to be EXTREMELY competitive. We decided to focus our efforts in Akron where we live most of the year and we've been able to close on 21 units since August. Maybe try some different areas.

I'm in Vero, same problem. We had a big run-up over the past two years. Now, IMO we're actually at a plateau, but Sellers think it's still a Seller's market and are priced high and don't want to negotiate. So, many of them just sit... right now, here, a house that doesn't sell within a month or two is over-priced... five or six months on market it crazy over-priced but they just don't want to budge. Now that we're at the "end of season"... maybe we'll start to see some reductions. (I'm seeing reductions in my in-box in Fort Lauderdale daily.) For the most part, it's a tough, tough market here to find anything where the numbers work, especially when financing, and that's as useful a generalization as all are. Condo fees throw me off every time for buy and hold. The only saving grace right now in Vero is that rentals are in short supply, so the rents are going up, which should begin to help. I'm having to dig deep to find flip properties, older listings that are vacant... I check the tax records to see how long ago they purchased and if they own it right so I know they can come down, especially the ugly ones that just need a little paint. If I had the option of a different market like you do, I'd be thrilled. I'd say best of luck, but clearly you've already got it. Nice! (Envious!)

DispoSolutions

This is a new for me. DispoSolutions -- as best I can discern, an intermediary used to dispose bank owned properties.

I need any general knowledge people may have of this company -- the ins and outs, best methods to offer -- start low or go straight to highest and best, etc.
-- Do they accept low offers and counter, or just go on to a higher offer?
-- If there are multiple bids, does it operate in essence like an auction?
-- How does it differ if there's only one offer? And how does that change the offering strategy?

My current situation:
I'm having difficulty understanding their "highest and best" scenario. I have the Selling Agent Instruction Sheet, which is confusing because it discusses highest and best at the beginning (highlighted in yellow) making one think they're IN their highest and best period, but at the end of the document it mentions counter offers and requests for highest and best, which makes me think their NOT in their highest and best period... or are they ALWAYS in their highest and best period?

The home has been empty and bank owned for 8 years, but it's just now come on the market and is out of the 10 day window. There doesn't seem to be much activity and may be a bit of a little sleeper because they have it listed $30-$40k over what it's worth after accounting for the damage from being unoccupied.

The selling Agent initially told us she "couldn't present an offer more than 5% off the asking price" which doesn't seem legal in Florida where all deals are supposed to be presented to the Seller no matter how ridiculous, but that was her position, so my Agent and I decided we would make the 95% offer, get the inspections done and then come back with a more realistic price.

Numbers:
Asking: $169,000
95%: $160,550
What I'd like to pay: $136,000
Room to go to: $140,000
Estimated rehab: $37,000
Estimated Re-sale Price: $210,000 (Priced for quick sale, below competitors)

My Agent was ready to make the offer last night when she got hit with the DispoSolutions login. Argh!

She suggested then to go in at $155,000 but still come back with a reduction after inspections, but I don't know if they will accept a post-inspection change in the offer price.

Is it generally better with this company to go in at highest and best first, or do they accept low offers and counter?

Thanks in advance for ANY advice any of you BP'ers have about this company and what is a good offering strategy.

I ran the numbers again, taking out all seller cash back, 10% down with a selling price of $299K (out of pocket increases to $48k) the C on C ROI still comes out at $582 the ROI drops to 19.29% but the the 50/50 rule increases to $511, is that because of my increase in cash down? The 2% rule is still way off. I can't figure this out, please help. Thanks!

I took a chance and clicked through the first few links without providing any personal info other than  credit score (excellent). They are offering 75% of property value, but the rate quoted is 6.74%. IF they will allow for rent estimates on previously un-rented properties, i.e., no rental history to count as income, and you have a FANTASTIC deal you can't qualify for on your own income it MIGHT be worthwhile, but hard to see it when today's 30-year fixed is 3.44%. There are the numbers I found, other BP members can probably weigh in on this better than I can.

I'd like to know as well.