All Forum Posts by: Jesse T.

It is a bad sign that the agent didn't even bother to take a picture.

So the property has 4 units?  Are there similar properties in the area?  Generally properties with 4 or fewer units are appraised used recent sales on comparable properties.

At that price point with such a large potential range in values, it might be worth getting an appraisal first.  It may not be 100% accurate, but it should prevent you from listing at twice what the property is worth.

Has he gotten any interest as a FSBO? Did anyone mention a potential price? Do you know agents who represent buyers in that price range? Maybe they can help you get an idea of the proper pricing.

Try to find out what your rental market is doing each year and then raise some fraction of it.  I would present the whole raise to the tenants and then point out that they are getting a discount based on being a good tenant.  

Another option you could do is offer the small increase or the bigger increase with a small upgrade.

A lot of times what happens is the areas that are the last to see appreciation are the first to see depreciation.  In the scenario you describe rising prices in the desirable city eventually forces people to the suburbs to buy - so the increase occurs later.  

However once prices start to stagnate or decline it hits the suburbs first since there is less demand(and possibly more supply).  Also a lot of times the people in the more desirable areas tend to be dealing more with "paper" losses and gains so they generally won't need to sell in very weak situation.

From a quick search on RealtyTrac it looks like Portsmouth has a pretty high level of foreclosures.  I think you will have to factor foreclosures into what you can get for your property.  Traditionally banks have sold without repairs, but some are now doing at least minor repairs, so the difference in quality may not be as dramatic. 

What are the expenses for a buy and hold?  There might be a deal for you to buy and hold if the expenses are not too high.  How would it compare to your current properties in terms of cash flow and appreciation potential?

If your seller is not expecting you to wholesale - don't do it.  You very well could burn relationships on both ends(buyer and the seller).

Do you have a property that you could borrow against for either the entire balance or the deficiency?  

While you still will be down 20K, you will be free to sell the property.

Would the tenant be interested in purchasing and able to get financing?  That might net you more than having to go through the costs of putting it on the market even giving them a small discount.

One thing that can happen is cash flow that looks great on the purchase price doesn't look so attractive based on the appreciated value.

It seems like the subject was trying as hard as possible to pay a mortgage that was not affordable and has little to no equity.

I think this makes a lot of difference.  What area and how is the market currently?  In areas where the market is fairly good, foreclosures don't seem to have as much effect.  In slower markets they tend to sell at a discount and pull down values for other properties.

Are you selling it vacant?  This may make foreclosures more relevant, because buyers will know you are motivated to some degree.