All Forum Posts by: Jesse T.

I ran into a similar situation when my house was listed for rent.  This is a slow time in the market.  The weather may be less of an issue in Florida, but I would think the holidays are still a factor.  If you continue to have a lack of interest, the first thing to look at is the price. 

I bought a SFH in Reston, VA in 2007. We moved down the road to Herndon, VA and listed our previous home for rent. We have a short-term renter moving in.

We are considering selling when the renter moves out.  The property dioes seem to be positioned well for appreciation within 1.5 miles of a new metro station, but the ratio of rent/property values aren't great.  The house is worth somewhere in the low 600s and rent is currently 2800 and would probably be less on a 12 month lease.

The "bones" of the house are in fairly good shape.  We have some old sliding glass doors that would need to be replaced.  Based on an estimate from Anderson, we will probably let the next buyers do that themselves.

We did some basic updates to the powder room.  We have some linoleum flooring that IMO needs to be replaced and also some dated light fixtures, even if it isn't a good % return, I think it will help it sell faster.

IMO the big question is the kitchen and MBR, should they be updated before selling? 

Definitely do it in writing.  I would probably split 50/50.  It sounds like your 50% would be 100% financed.  His would be about 60% cash/40% financing.  The deli rent would be split 50/50.  If the 1 BR/2 BR rents are close, you can just split the amount of the rental income 50/50.  The other option would be he would get the 2 BR rent and you should be the 1 BR rent - although vacancies would have to be factored in some way.

Whatever agreement you come to, make sure it is in writing.

I would make an offer with an inspection contingency.  Even if it isn't the norm, the building is 40 years old and this is your first multi-family property.  Maybe as you get experience you will know what to look for, but I definitely wouldn't go without one on my first large property.

If the contingency is holding up negotiations, you might put a limit on what the seller would be required to fix.  Limiting it to major issues would probably make the offer stronger.  If the seller is willing to give you a couple of days, you could do the inspection before submitting/accepting an offer/counter.  

In general I agree with the posters who say that the Make it Move listers generally are asking well over retail.  Most are not going to be very motivated.  I think the numbers would likely have to work at the Zestimate to get anywhere.  So you may get lucky if the Zestimate is a lot lower than the actual value.

It doesn't cost anything other than time, so it might be worth a try.

How much underwater is it based on your contract price?  It might be worth contacting the holder of the second lien and saying how much it would take to clear the second lien.  Ideally 1st lien + commission + reduced amount for 2nd lien <= contract price.  You could also look at the sellers agent's commission if the numbers are very close, but don't quite match up.

If you are looking to real estate for investment income, the multifamily route is likely to be more likely to meet you needs.  Not to say you can't accomplish it with single family homes, but it will likely take finding great deals, rather than merely a very good deal or two.

Given the appreciation and it looks like your need to sell to get a down-payment, selling your current house now is probably the best idea.  If you have another source for a down-payment consider renting out, but it will probably be best to sell within the 3 year window where you get the exclusion.

Initially I would look for properties that would work using 1/3 to 1/2 of the proceeds as a down payment.  That way you have reserves and funds to potentially buy a second investment property.  

I would be inclined to try to repeat what is working very well.  In a higher market you will have to be very selective and probably make offers on multiple properties to avoid overpaying.

It looks like owner occupied financing would be the way to go.  One thing I would recommend if possible would be to have the units rented out before moving into the new place.  I would definitely not abuse the flexibility, but there usually is some flexibility in occupying for owner occupied financing.

I think the multiple offers approach via the agent is the way to go.  

If they have interest in doing seller financing and counter with something that is close, it might be worth meeting in person(both agents and you and the seller).  I think the structuring of the deal is probably going to come together more quickly and smoothly if you aren't playing a game of telephone.  If cash or traditional financing is the sellers preferred offer, it is pretty simple and I would just go the normal route.

If you use 75% of maximum rents to cover commissions/property management and vacancies - your cash flow shrinks to $250/month.  That also assumes there are basically no major repairs/capital expenses.

Unless there is something closer than the metro area, the location seems like a big red flag.  Not only will it make vacancies harder to fill, but it will also likely have a negative effect on appreciation and the ability to raise rents in the future.