All Forum Posts by: Kelly Pierce

The increase in supply we hope to see because of vacinations is from sellers who are also buyers. That is a net zero for the market. True supply is new construction and deaths; people live longer, boomers are not selling.

The US is short about 4,000,000 homes - that is the new construction undersupply since 2008 when many builders went bankrupt or scaled down. We have started building more, but the wrong kind (at least here in Milwaukee it's only luxury homes) and the cost is going up quickly (materials, supply chain.. not only lumber, which has quadrupeld).

Demand is comming from a shift in demographics: millennisals are now the largets group of home buyers, 82 million, 39 years old - they are not going back to rent. That is actual demand, that consumes additional houses. They don't have one to sell.

I talk about this on my YouTube channel a lot, we have entered a new phase. This is not a temporaty situation, this market is here to stay. Ask anyone in CA how that works.

We have lost the ability to make new homes on scale, we don't have the trades, we don't have the land, we don't have the necessary zoning for high density, affordable Sf with city sewer and city water. Everything, at least in the Milwaukee area, is zoned for large SF on 1-5 acres with pricate well and spetic - 500 to 700k. That is not what we need. We need volume under 350k and it is physically impossible for a builder to do.

A lot of factors influence the market, like you have pointed out @William Allen - interest rates, goverment policy, money supply, stimulus, forbearance etc - but in the end it comes down to supply and demand. And that will take a while to balance out.

Capitalist markets are self regulating between supply and demand; of course we will expand supply, but that will take time (need more young people in trades..). The only other solution is that we reach a balanced market through price - one prices have gone up far enough, demand will be reduced and more people will rent, because it's cheaper. Right now thats still not the case in Milwaukee - much cheaper to own a home than to rent. I expect this to change over the next years.

I appreciated this thread Marcus. I'm a CA realtor (Sacramento capital area) and I agree with all you've said here. Unfortunately here in CA it's MUCH cheaper to rent than to buy and has been for a long time. I personally rented after my divorce because it allows me to live where I want for 1/3 of the cost. So to combat that I have multiple rental properties here and out of state......speaking of, if you have any good potential rentals in your area let me know.

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I did find this:

In a decision passed down earlier this month, a California court of appeal ruled that a right of first refusal contained in a written lease is a nonessential term that expires when the lease term ends and the tenant becomes a holdover tenant, unless the parties specifically indicate that the right of first refusal shall carry forward into the holdover tenancy. In so doing, California joins the majority of states on this issue, declining to adopt the minority rule that would carry rights of first refusal over into holdover tenancies.
Ref: https://www.ravidlawgroup.com/...

So basically the right of first refusal would apply until the end of the lease, so once I do not renew the lease and give notice of the sale. I'm free to sell normally once they move out at the end of the lease. If this info is still accurate. I feel like I'm missing something with all the COVID landlord/tenant changes.

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Originally posted by @Caroline Gerardo:

You cannot kick them out during lease period in CA. You can offer them money to move. You don't have to allow them to buy it first. It's difficult to sell tenant occupied properties as the tenants could make the unit as smelly and messy as to discourage the highest and best bidder. The CA market is hot now, and no idea what it will be in February. Even if you got both listed on the same day there's no guarantee you can close on the same day. I assume you want to lump them together into a 1031 to buy something more expensive than one alone. My suggestion is to talk with the tenants. Tell them you are planning to sell and see what they say.

Yes we may have a conversation early so it will also give them time to "break the lease" if they find an alternative sooner. Also definitely won't sell with tenants in place (unless to them which is highly unlikely) because it wouldn't make a good rental for an investor, definitely owner occupied. I don't think I need them to close on the same day, just in the same window would be helpful for identifying replacement property. Thanks!

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Originally posted by @Peter M.:

@Kelly Pierce You have to wait until the lease is over to get them out unless you talk to them and they are willing to go voluntarily. Like a cash for keys situation. Guarentee all their deposit back and maybe give them extra for moving fees?? As for getting them to sell at the same time you can just go month to month on the first one that expires. Or you could sell them with tenants to another investor. An investor would understand the 1031 process and you could make it contingent on finding your replacement property. Not sure about the right of first refusal laws in CA. Good luck

Thanks. I've done the cash for keys before but don't plan to take that route. I may just go month to month on the one so I can sell them together in Feb. I do believe we must give right of first refusal if we "terminate the lease" to sell here in CA though.

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I have to register both of mine in CA but only on required an inspection but not annually.

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I have two SF rental properties in CA. I'd like to (potentially) sell both of them. DISCLAIMER: I've been fortunate and have great tenants - none of which have missed a beat during COVID. The rentals (in CA) just don't make financial sense and funds could be better used elsewhere for better investments.

I'm curious where to find current legislation or rules about this. Q: Can I give 60 day notice anytime during the lease that I plan to sell and need the tenants to find alternate housing. Or do I have to wait until the end of the lease (60 days before the end)?

Q: I believe I have to offer the home to the tenants to buy it first....if they are interested I'd likely miss the bidding wars currently happening in CA or would they need to bid with other bidders?

Lastly, these will be tricky 1031 exchanges and I'd like to do them together or near the same time but the leases end in Sept & Feb.

Any thoughts and/or advice would be greatly appreciated. Also thoughts on what to seek out for my replacement propertie(s). I have some ideas but would love to hear the thoughts of others.

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Thanks @Daniel Johnson the name of your business alone tells me I should maybe talk to you ?

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All Forum Posts by: Kelly Pierce

Kelly Pierce has started 9 posts and replied 59 times.

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