All Forum Posts by: Kevin Koffman

Vacant Motel lot is up for sale. $500k. Walking distance to Gatlinburg‘s downtown area and trolley goes right by the driveway to bring you, or your vacationing guests, home. In the heart of the great Smoky Mountains. Level lot for building your dream home or a motel, zoned C-2, general business district. Appraised in Jan 2021 for $520,000. Realtor.com has estimate of $563K.

Does this sound like a fair price to move it quickly or would you ask for appraised value?

604 Cherokee Orchard Rd. Gatlinburg TN.
On Zillow. 

@Jacob Stokes, You dropped a lot of info in the post above that wasn't in the original post. In a case where it won't qualify for FHA or VA financing AND the house needs repairs AND it's been on three market a long time... OF COURSE a cash offer is going to make a BIG difference.

Tell your realtor to write the offer EXACTLY how you want it. That’s it.

If you’re wrong and the seller doesn’t like it, you can usually just increase your offer during negotiations.

I have found there are many “retail” R/E agents that don’t want to low-ball.

I have also found some excellent “investor” R/E agents that are happy to write any offer, knowing you can’t buy a property until you write an offer.

If you have to continually fight with your agent to do what you want to do, get a different agent.

Thanks. That’s exactly the kind of info I need. A starting point. I may end up selling it but I’d like to explore what else I could do. 
I’m thinking of getting an appraisal, too. 

I have .66 acres in Gatlinburg TN.

604 Cherokee Orchard Rd  

Walking distance to downtown Gatlinburg.

It used to have a Bed and Breakfast on it, which is no longer there, now it’s vacant land with just the concrete slab.

I’m not a builder, but I do have experience renting out houses and condos. 
The land is owned free and clear. 

Any thoughts on what I could do with it, besides selling the land?

I found a good multi family deal in Fort Lauderdale. But, I am bidding against cash buyers.
My problem is, I found a great lender who will finance the project for 3.375%!   my credit score is very high. That’s great, but...

This lender won’t do a cash out re-fi. So I can’t get hard money and then re-fi with this lender. I have to buy it and finance with this lender to get that rate. (Also, I’ve never borrowed from a hard money lender.) But I’m probably going to get beat out by cash buyers. The sellers realtor says the cash buyers are “pretty close” to full asking. I’m willing to pay full price, because I can get a great interest rate. The sellers don’t need a fast close but they would prefer a closing without finance contingencies as opposed to maximizing their profit. 
Any ideas?

Kevin

Just listened to a BP podcast that answered your EXACT question!

Q: why would I keep this property and only make X per month when I could sell it and make $50K?
A: "BP podcast #398.22 - BRRRR Properties in under 10 hours per week with Tarl Yarber".
question Starts at time 40:30 and answer ends around 40:33, 3 minutes. 
To summarize, in the short run you’ll be very happy to sell and get the money. In the long run you’ll be very happy you kept it as a rental. 

I know this is true because I bought 2 identical properties for $50k in 2000.   In 2005 I sold 1 for $175k, making a whopping profit and return. A triple!! For 10 years I was SO HAPPY I sold it. I kept the other one that I still have today. Now that it’s 20 years later, I am SO HAPPY that I kept the 2nd one because it’s paid for and throwing off $750 a month and the money from the first one I sold 15 years ago has been spent, long ago.  
So I was happy with both decisions. But one is longer term happiness than the other. And for 10 years I was wondering why I didn’t sell them both when the value dropped Back down to $90k in 2008. But Now, in 2020, I wonder why I didn’t keep them both.

As a side note, I am now under contract to buy another (3rd one) in the same complex for 138k. Because I want the cash flow.  Cash flow is king. 
Honestly, you’ll be happy either way. Once you Make a decision, don’t look back. You’ve got a great “problem” to have. Check out that podcast. 

"Selling it to invest elsewhere"... Assuming you're selling it to get the equity out. You don't necessarily have to sell it, Re-finance it. BRRR.
Get super low interest rates and use that money to buy another investment. Grow your assets AND sit on it for a few more years. Do both. 

Depends on your place. On an older unit that is at the low end of the rental market, I get first and security. 2 months rent.

On a higher end beach front place, I get first, last and security. And demand a high credit score. 
when a recent tenant applied to the beach place with F/L/S but had a non-existing credit score, I turned them down. They came back and offered 2 extra months of pre-paid rent and had an excellent rental reference from the previous landlord. I accepted. 

If it was my previous home, as in your situation, I would definitely get F/L/S and I would want to see a 700+ credit score. 

You will need to get a blank application from your condo association, they usually want their own form filled out by tenant.

- Place an add, Zillow or with a R/E agent

- have tenant fill out associations’ condo application and Your background authorization form

- get app/background fee from tenant 

- Screen the tenant, (full background check)  If you approve them:

- get cashier check or money order for  at least 1 mo rent as a deposit to hold property and sign a lease. 
- submit application and lease to condo association 

- get condo association approval of tenant in writing (email is fine)

- get remaining $$ (last & security)
- give them the keys.

My advice is to wait til the end of the year to see if there is going to be a correction like many people are talking about, with $600/Week unemployment benefits running out.  If so, swoop in and buy low. If there’s not a correction, you can still buy multi-family within your 12 mo time frame.