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All Forum Posts by: Marten M.

Marten M. has started 4 posts and replied 14 times.

Post: How Would You Run These Numbers?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

Makes sense, I appreciate the insight guys! I had a feeling I was over-analyzing the situation but I wanted to make sure I wasn't missing something or making a large error in the way I run my numbers moving forward. Appreciate it!

Post: Is This A Red Flag For You?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Mike McCarthy yes I slightly misunderstood what their counteroffer actually was. I do think you're right - he is trying to weed out the tire kickers. I'm considering agreeing to their terms and paying the $500 for the inspection - I can still back out of the deal and will only be out the cost of the inspection.. not the end of the world but would be nice to at least put eyes on it in person before coughing up the money.

Post: Is This A Red Flag For You?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Nick C. I wouldn't call it unbelievably good, but it's a good deal on paper (at least with the numbers I ran). I have seen pictures but I don't know how dated they are. I do agree there's a good chance the reason he's doing it this way is sheer laziness, but I also think he's trying to add a little pressure by forcing me to pay the inspection fee prior to any initial walkthrough. 

I would feel more comfortable if I had more experience and knowledge, but this is actually my first deal. I've ran the numbers and it should be a cash flowing property, but obviously there's a little uncertainty. As you said, worst case scenario I'd only be out $500 for the inspection so it's not the end of the world.

Post: Is This A Red Flag For You?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Patricia Steiner yes I got clarification on the actual "inspection period", which is still at 10 days. That's a good idea to specifically ask if the tenants can be present as it gives an opportunity for us to converse with them and ask questions. However, this PM is wanting the exact opposite of that, hence allowing us only 1 day to access the property. At which time I'm assuming the tenants will not be there.

I'm finding it more difficult to actually receive accurate and current rent rolls/lease agreements from the seller's agent/PM than I would expect. Both tenants are on Section 8 (I verified with SPHA to confirm) in this case. The PM sent me a current lease for one of the tenants which expires in a few months. Then he sent me a lease for the second tenant which expired in 2018. He's apparently been on month to month since then and they didn't realize it. It was my impression that Section 8 tenants had to be on a yearly lease so that raises even more questions. It seems more like they're lazy and/or unorganized more than anything, but it's a little frustrating.

Post: Is This A Red Flag For You?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

Thanks everybody for the quick and helpful responses. Let me clarify on the situation a little bit as my agent just sent me the seller's signed counteroffer and I slightly misunderstood what he explained to me:

The seller's counteroffer was simply that the initial walkthrough and inspection should be completed on the same day. On day 1 of the contract I have to put $5,000 into escrow as a down payment. I still have 10 days to make a decision before completely backing out - at which point my $5,000 in escrow will be returned. 

Essentially what I believe he's trying to do is make sure I have actual skin in the game in the form of a $500 inspection before I'm granted access to the property.

Post: Is This A Red Flag For You?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

I just put in an offer on a duplex yesterday which the listing agent said the seller agreed to, but did not sign the contract. Initially they would not allow any buyers to do a walk through without a signed contract in place. Our offer was to put 10K in escrow as a down payment and they would allow 10 days for an initial walk through and then an inspection/appraisal before finalizing. 

Today, the selling agent countered with a 1 day inspection period, at which point I would have to make a decision and would not be allowed access back into the house. This may not necessarily be a deal breaker, but keep in mind - I still haven't even seen the inside of the house outside of pictures on the listing. The listing agent is also the property manager and his reasoning was simply that he "doesn't want to disturb the tenants", but the fact he's insisting we pay for the inspection up front and can only access the property one day makes me feel uneasy.

I may be overthinking this, but I was hoping to get some feedback from the community - would you be concerned?

Post: How Would You Run These Numbers?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

I have what I imagine to be a pretty common scenario, but I'm having trouble wrapping my head around the proper way to run these numbers.

I just recently pulled equity out of my current house. I plan on using roughly $40,000 (20%) to renovate this house and the remaining $160,000 (80%) will be used to invest in other properties. The problem I'm having is when I run numbers on the current house I have, do I calculate the full amount of the P+I which is $910/mo. or do I only account for 20% of the P+I ($182/mo) as the remaining 80% will be invested in other properties?

If I calculate the full P+I, the house is negative cash flowing (which is somewhat okay because I currently live here, can raise rent for the second room and have a 3rd room that is empty I could rent out). If I calculate only 20% of the P+I, I pretty much break even - again, I still can increase cash flow by renting out the 3rd room so it's not the end of the world, but I'd like to know the proper way I should be doing this.

Hopefully this makes sense and I appreciate any insight you folks can give me.

Thanks!

Post: Solid Cash Flowing Property. Offer Above Asking Price?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Evan Polaski That's a good point. I've been searching for and analyzing properties daily so I'm sure something will work out soon. I already have pre-approval for funding but the inspection is something I wouldn't want to take out just yet as I'm not comfortable spotting issues that could be a major headache to deal with.

I do have a handful of older listings that I'm looking closely at, but it seems more often than not that these properties have not sold for good reasons - won't pass 4 point inspection for some reason, sitting on an unmitigated sink hole, etc.

Post: Solid Cash Flowing Property. Offer Above Asking Price?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Evan Polaski Got it, thanks for the explanation there. It makes more sense now. This particular property was sold to somebody who was able to offer a larger up front cash offer anyway, but I do think it was a pretty solid deal. Oh well, back to the search. 

Thanks again for the responses guys!

Post: Solid Cash Flowing Property. Offer Above Asking Price?

Marten M.Posted
  • Investor
  • Saint Petersburg, FL
  • Posts 22
  • Votes 4

@Evan Polaski I see, makes sense. I was under the impression that taking 10% of the monthly gross rent would account for those capex items, but it sounds like what you're suggesting is to itemize them individually in addition to a flat 10%? 

As far as the leasing commissions go, I did not think of that at all. When calculating that, you're saying take 1.5 months rent divided by 2 years? 0.75 month's rent divided by 12 months?