All Forum Posts by: Matthew Richey

@Matthew Richey, given your stated lower comp figures and its lousy street appeal, and your desire to buy right, and often, I'm wondering WHY you even went up to $290k!?

ie. I suggest that you take their "no" as your opportunity to give it a long, cold, unemotional look.

Ask yourself: what is there about it that makes me WANT to pay more for it than anyone else?

Please, don't get caught up an with an "I've put a lot of work into this and just want it" attitude!

ie. You haven't justified a $290k price to us, (from whom you've asked our help). Thanks...

@Matthew Richey 

Is it/can it be a self directed 401k? If so you can invest it in your properties and if you have a property under the 401k all profits go to the 401k and do not count towards your contribution. That is my understanding anyways. I would talk to an expert on that.

I can't remember where to find it off the top of my head but there is a few things out there that talk about how much you need to make in passive income per month to be able to stop working. The basics is take all your bills per month and add other expenses and that is what you need to make in passive income before you can stop working. The usual suggestion is include the cost of a vacation once or twice a year so add 1 or 2k to the total you get.

@Matthew Richey 

One of the things you should do is pay "rent" on the your side also. if you put the amount you pay yourself into a separate account it will add up quickly and you will find that you can purchase a second property quickly. In two years if you pay 1000.00 in rent you will have 24k to buy other properties. It will also give you a great emergency fund. 

You may want to look at starting a self funded retirement with it also and use it to invest in some properties. You could put some of the rent you pay into it and build it up fairly quickly. I am sure there are several people that could help give you advice with that.

@Matthew Richey, "bad curb appeal" means that your best Offer can justifiably be even LESS than the lower comps! After all, two can play the "it is what it is" game! Cheers...

I am about to close on the purchase of my second duplex in the South Hill Puyallup area. I've been watching the $300-400k duplex market very closely for the last 6 months or so and the majority of the sales have been closing very close to asking price. The one I'm buying was listed at $420k and we settled on $410k. Good luck in your ventures @Matthew Richey!

@Matthew Richey

I am looking to do the same thing very soon in that area as well. Maybe closer to Tacoma. I am following this post, please keep us updated. Good luck.

@Matthew Richey

I took a good, hard second look at the area, the home, the comps, and I have to stand corrected.  I'm with you...I think you are in the right range.  Hats off to you for having 25K.  But for whatever reason, this seller has big ideas for the price he wants.  The spread between list and sale on your comps is much more narrow than the spread you are shooting for.

I love your idea of adding a unit, but watch out for zoning.  Make sure the city permits a triplex at this site.  It probably is, but good to check on.

The psychology of sellers is hard to predict.  I've seen sellers in my market just hold on forever until someone gave them their asking price.  But this guy seems to be in a hurry.  If your financing is solid, with pre-approvals in place, that may buy you some price reduction.  But the comps belie that the spread between asking and sale price is much narrower than a 25% spread you are going for.  Hey, I hope you get it.  

Concerning the 2% rule, what determines the 2% is your gross rents divided by the purchase price of the house.  So if each unit rents for $1100.0,  assuming you rent both, than this property at $260K is a .08%.  

You are 22, you have 25K, and you have the guts to invest in real estate, so you are ahead of the pack.  One thing to consider.  In 2006, the owner purchased it for just 52K.  He has a big capital gain coming.  Find out if he owns multiple properties in the area.  You can do this by looking up tax records, then cross reference his name to see if he owns any others.

Knowledge is power in negotiations.  If this is his only rental, you know something about him.  If he owns many, he may prefer an all cash offer because he intends to roll proceeds via 1031 exchange to another property.  I bet its the former...the impatience is there.  There are a lot of variables here still to consider, but you are off to a good start.  Please post what happens.