All Forum Posts by: Kenny Smith

@Alfredo Sanchez

As a few people already mentioned, sometimes it's the agent, your offer, or just the luck of the draw! You can get lucky and lock in your first offer, or it takes 5, 10, 20 offers sometimes.  

I don't know your market exactly, but I do thoroughly believe there will be more and more opportunity the next several months.  Your everyday home buyers aren't typically looking around the holidays.  And, most sellers know if they want to get top dollar, they should wait until the spring to sell.  So what you get is the people that are selling in the "off-season" are typically very motivated.  Maybe they are going through a divorce, relocating due to a job, finished a flip, or simply have to sell for financial reasons.  Regardless, these people don't want or cannot wait to sell their home.  

Yes, inventory is typically lower so there isn't as much to choose from.  However, with this year and rates almost at the mid 7's right now with the potential to go up even more, buyers could really back off.  Which means current houses that are on market will sit longer, building up inventory which means opportunity.

Lastly, something a lot of investors/agents aren't talking about right now is what the future buyer demand is going to look like.  Yes, we all know there is much pent up demand right now.  But many people don't know that we saw a very large birth rate spike back in 1990.  That is significant because the average age for a first time homebuyer in the US is between 34-36.  That means over the next few years, you are going to see even more buyers enter the market which is going to make buying later even harder.  Rates go down, and it's going to be a feeding frenzy.

Word of advice, get in now.  Don't wait, you will regret you did.

Best of luck!

@Tyler Woolums

First off, sorry you're dealing with this.  Definitely not fun right after you close on a large purchase.  A couple things.

1. I am not sure why your agent did not request to see all receipts and invoices by final walk through.  That is negligent on their part.  They are certainly not obligated to do anything, but if I didn't get the invoices or receipts for work we asked to be repaired, shame on me.  I would feel responsible to help my client out in some way.

2. Although your agent can now no longer represent you in any way as the transaction is over with, you could always reach out to the seller and talk to them directly.  I would just be honest, but professional, and call them out.  Tell them you want to avoid taking this to small claims court, so you'd like to get them to pay.  They may or may not go for this, but it's worth a shot.

I would say these are really your only 2 options, and of course small claims court afterwards if it's worth it.  To someone else's point, probably not worth it over a few hundred bucks.

Best of luck!

@Francesca Zanzucchi

great question.  So we have a number of MTRs, and I will say I have never gotten a 6 month rental.  I know there are plenty of people that have in their properties, but depending on who you're catering too, that may be tough.  If the goal is to cater to travel nurses, their contracts are typically 13 weeks, but could vary by a few weeks give or take.

I don't know the AZ market, but you are certainly limiting your MTR pool by requiring 6 months.  Travel nurses certainly aren't the only ones to market to when it comes to MTR's, but they are a very large chunk.

Best of luck!

@Douglas Gratz

To better understand the situation, Is there any specific reason you'd like to do that?

If it was me, I'd have him pay half of your closing costs, cap ex/maintenance, and current equity gain since you've bought the property.  Anything that has come out of your pocket, in my opinion, is only fair to have them compensate.  You took all of the risk when you bought the place, therefore, you need to be compensated on what looks like a great deal on paper.  They are walking into a cash flowing property with little to zero work or risk on their part up front.

Best of luck!

@Alexander McConaughey

Everyone has made good points here, but you also need to ask yourself what your net worth return on investment is. COC return plus the equity you've grew in the property.

Couple questions...

What do you owe on the property?

What is your expected average appreciation over the next 5-10 years?

Have you looked into other rental strategies to increase cash flow?

If it is appreciated well, have you looked into tapping into that equity through a HELOC or second home loan to continue to build your portfolio?

What is your current interest rate?

And if you haven't lived in the property 2 out of the last 5 years, you'll have to pay Uncle Sam his capital gains tax on $105k or do a 1031 buying something equal to or greater value.  And to Nathan and Jon's point, if you don't have another plan where you could get better returns elsewhere, inflation will eat away at your money as it sits in the bank.  The fact is, you're not going to hit a home-run on every deal.  But it is really important you look at all possible scenarios and potential outcomes before making a decision to sell.

@Erika Martinez

I used Grayce property management for a while on my condo at 8%.  They were great, and I've established a really good relationship with them even though I self manage now.

I am not sure what type of property you have, but I would assume they charge slightly higher for a SFH vs a condo due to less maintenance.

Shoot me a DM for contact information if interested!

@Brady Mullen

Great question!  As I tell all my clients, you have to look at the facts and the data of what is going on in the market and based off of that, make your best educated guess of what could happen if you wait to buy and keep renting.

First off, interest rates. We have seen rates continue to increase, with rates hitting a 23 year high last week at a national average of 7.49% for a 30 year fixed mortgage.  With all that said, now is a great time to buy. Think about it like this, if you are on the sideline waiting for rates to drop, so is everyone else. There is insane pent up demand right now, and when rates drop, everyone is going to get back into the market, and home prices will sky rocket again. Especially with inventory going to continue to be a problem in the coming years.

Regardless of the rate, prices have kept going up or stabilizing because we are dealing with such low inventory. This is not good for both buyers and sellers. Buyers in the fact their monthly mortgage will go up tremendously, but also sellers for those who want to trade up, don't want to because they become a buyer in this market. Also, if they bought or refinanced during COVID, they likely have a very low rate they don't want to give up. For those reasons, sellers are holding onto their homes until rates go below a certain percent. Who knows what that number is, maybe between 5-6%?

If the rates keep going up, it is actually a good thing for investors and buyers. This will scare a lot of buyers out of the market and they will wait to buy. Those that are savvy will get into the market, negotiate a lower price on a home (especially in the offseason), and refinance the mortgage/rate if and when rates drop.

You can also negotiate into an offer what is called a temporary rate buy down paid by the seller. That can help alleviate short term interest rates buying you time until they drop and you refinance permanently.

Lastly, if demand isn't at an all-time high right now, we have a record number of early to mid 30's in the US right now.  Back in 1990, we saw the birth rate here in the US skyrocket in comparison to previous years and following years.  The average age of your first time homebuyer here in the US is 34-36.  All of these buyers have or will enter the market in the coming years pushing demand even higher.

Waiting to buy is only going to cost you more and more the longer you wait.  Hope this gives you some ammo!

@Jaden Duclos

Ryan is correct, add a door connecting the 2 units. If you have it walled off, then yes, that would technically be considered an illegal duplex.

Also, if you have a second full kitchen downstairs, most building departments don't allow a second oven without it being zoned R-2.

I'd call your building department and get further clarification on what you are and are not allowed to do to make you feel more comfortable.  Who knows, it could already be zoned for what you need it for.

Best of luck!

@A. Berk Gokce

Great question!  So I can't speak specifically about your market, but I can give you an idea of what is happening in a general scale nationally right now.

First off, interest rates.  We have seen rates continue to increase, with rates hitting a 23 year high last week at a national average of 7.49% for a 30 year fixed mortgage.  With that, buyer's affordability is taking a hit.  We've seen the luxury home market take a hit, and has been pushing buyers into the entry level home market more and more.  Whatever your entry level  home price is, there is likely going to be even more competition for those homes.

With that being said, prices have kept going up or stabilizing because we are dealing with such low inventory.  This is not good for both buyers and sellers.  Buyers in the fact their monthly mortgage will go up tremendously, but also sellers for those who want to trade up, don't want to because they become a buyer in this market.  Also, if they bought or refinanced during COVID, they likely have a very low rate they don't want to give up.  For those reasons, sellers are holding onto their homes until rates go below a certain percent.  Who knows what that number is, maybe between 5-6%?  

With all that said, now is a great time to buy.  Think about it like this, if you are on the sideline waiting for rates to drop, so is everyone else.  There is insane pent up demand right now, and when rates drop, everyone is going to get back into the market, and home prices will sky rocket again.  Especially with inventory going to continue to be a problem in the coming years.

If the rates keep going up, it is actually a good thing for investors and buyers.  This will scare a lot of buyers out of the market and they will wait to buy.  Those that are savvy can get it, negotiate a lower price on a home (especially in the offseason), and refinance the mortgage/rate if and when rates drop.

You can also negotiate into an offer what is called a temporary rate buy down paid by the seller.  That can help alleviate short term interest rates buying you time until they drop and you refinance permanently. 

I would recommend reaching out to a Realtor in your area to help guide you through this process.  If you don't have a Realtor in mind, I have a very large brokerage and would be happy to refer you to someone out there.  I'll shoot you a DM.

I hope this helps!

@Jennifer Stammberger

What type of businesses do you want to cold call, and what is your angle specifically?