All Forum Posts by: Joe Splitrock

I question if two platforms are worth the effort. Are you having trouble getting bookings on VRBO? We used AIrBNB exclusively and it stayed pretty much completely full. Now you will have two platforms to understand and support which makes your job harder. Not the end of the world, but I would avoid unless you are having problems getting bookings.

Was your attorney involved in the original contract? If so, you should consider a different attorney. There is three issues to consider:

1. Any purchase agreement needs to have an expiration date.

2. The buyer should sign first.

3. The contract needs to stipulate deposit/earnest money. The contract should offer a deadline to pay such funds, so even if both parties sign, the contract is invalid if the buyer doesn't pay the deposit.

The good news is that since no money changed hands, there is no valid contract at this point. 

As others said, the term over pay is very subjective. Some consider paying above asking price as over paying, that that assumes asking price was fair in the first place. I have paid over asking price and gotten amazing deals. Some deals I wouldn't touch for 20% under asking price. 

It really comes down to the numbers, specifically cash flow and future appreciation. There could also be other factors that may cause you to overpay. Maybe it is your first deal and you are house hacking. It may be worth paying a few extra dollars, since there is a personal benefit. Another reason to overpay may relate to taxes. Maybe you have a large portfolio and are looking for acquisitions to reduce tax burden. You may pay a premium to get acquire a nice asset, understanding it has overall benefits to your portfolio.

Most importantly, figure out if you really are over paying. I passed on countless deals over the last few years saying "who would pay that much". Today I would do any one of those deals that those prices, so I lacked the ability to predict future appreciation. I keep that in mind today when looking at deals, so I don't have the same regret in five years. 

It depends on your target tenant. If you want to cram three young roommates in the property, they may look past not having a living room. If you are trying to rent to anyone with friends or family that wants space to have visitors, you need a living room. I would never delete a living room, because I don't like renting to roommates. Just more turn over and more drama. There are people who pack in roommates and rent them by the room, so it can work. 

@Paul K. not to beat up on you, but next time look at Google Maps, both aerial and street view. Do that before you ever send boots on the ground to the property. Look for proximity to things like train tracks, but also major highways, industrial areas, etc. 

The train tracks were there before you owned the house. The city or train operator is under no obligation to accommodate your noise concerns. Cars getting hit on train tracks is a far greater concern than noise. Also be aware that even if tracks are quiet today, they can get busy in the future. I have seen tracks go from one train a day to one coal train every four hours. Coal trains create noise and nasty dust, so just be aware it could be worse. Nothing you can do about the trains, so deal with mitigation.

The curtains may help, but really window replacement is your best bet. My parents live on a busy street and had 1950's era single pain glass windows. They upgraded to new double pain glass windows and the noise disappeared. 

Whatever route you choose to rent the property, deal with the noise problem upfront. In your property listing, be very specific about the noise. Put a clause in your lease that the tenants must initial, accepting the noise. Do not hide the noise issue. 

As others suggested, consider renting to more challenging tenants. That could be low credit score, felon friendly or accept dangerous dog breeds. Someone with a problem you are willing to look past is willing to look past your noise problem. 

I wouldn't call it a scam, but they are fee heavy, including really high sales commissions. This is why "financial planners" spend most their energy selling insurance. I don't fault them for wanting to make money, but it skews their perspective on what is good for you. The marketing materials to sell these plans really oversell the benefit. They try to say "be your own bank" when in reality to access the cash value in your policy, two things need to happen:

1. You need to have cash value, which means making massive payments and paying massive fees.

2. You take a loan from the insurance company and use the cash value of your policy to secure the loan.

You are not the "bank" in this scenario, the insurance company is the bank. At the end of the day, insurance companies take your money and invest it in bonds, mortgage backed securities and the stock market. You can invest directly in all these vehicles without paying high fees and sales commissions. There can be some benefit to these plans for tax planning purposes, but that is mainly very high net worth individuals. If you are just starting out, save your cash for real estate deals or put the money directly into index funds. I know the financial planners (insurance sales people) will disagree, but selling insurance is how they put food on the table, so you can't blame them.

@David Siegel I never leave any food or condiments in the fridge. I have been to AirBNB, where there is all sorts of nasty questionable stuff left in the fridge. Even half used ketchup bottles or butter is disgusting in my opinion. We leave the fridge completely empty and completely clean. 

I don't see an issue with leaving bottles of water or packs of chips, but I wouldn't leave anything spoilable. We provide a selection of coffee and tea, sugar, salt, pepper, cooking oil and that is basically it. 

I wouldn't get into the business of selling food. It is just too much effort for minimal benefit. People don't expect food and it is not going to help your host reviews. Focus on providing a perfectly clean unit as your highest priority. 

@Howie W. even though you didn't authorize the work, you are benefitting from it. Your AC unit had limited life left, so you were going to have this expense in the near future. If I am understanding correctly, the company who performed the work was given authorization. I realize you didn't authorize the work, but they acted in good faith believing they had authorization from the correct party and believing they would get paid. Someone needs to pay the company that did the work. And paying that company isn't just for the parts, but also the labor. Obviously paying the marked up ridiculous price of $7450 would be insane, but offering $1500 for a $4000 job isn't fair in my opinion either. 

It sounds as though there was a mistake/miscommunication at the property management company. I am not sure that means you should get a brand new AC unit for $1500. You could call a local wholesale shop that sells the model of AC unit you have installed and find out what the actual cost is of the hardware. Offer to pay that full cost and tell your PM they need to pay the labor / profit or other padded fees on top of the hardware. 

Either way, I would open a discussion with the 3rd party and explain to them that you agree they need to get paid, but you didn't authorize the work. That means you need to get the PM or whomever made the mistake to pay up.

In a perfect world this should have never happened, but it did and you did benefit from the mistake. Try to be reasonable and pay a fair portion. In the end (for example) if you get a $4200 AC job for $2200, that is an amazing deal. Focus on that instead of feeling you are wronged and should owe nothing. 

 I think it is even worse than what you two are saying. It is not just blue collar jobs. People get engineering degrees or computer science and then complain about their "soul sucking" career in corporate America. The drum beat is "retire early" through the FIRE movement. People are leaving good white collar jobs in their 30's.

The problem is with less people working, the economy becomes unbalanced. It will drive up the cost of goods and services, at the same time decreasing the tax base. The result will be new taxes on passive investments and probably more consumption based taxation. 

It isn't the best idea to take money from family members. If they feel it is risky, tell them to stand down. Can't you find people who are not related to you that are willing to invest with you?