All Forum Posts by: Michaela G.

I think a lot depends on your local market. Is it in a nice neighborhood? Is it low-income? Does it need a lot of work or is it move-in ready?

One thing that's worked for me, when making a cash offer, is high earnest money. When I offer 10K for a property, I offer 10K earnest money. That makes me look so much better than all the wholesalers, who offer $ 500 or $ 1,000. It shows that I'm serious.

My experience has been that a bank will always counter. I think it's in their instruction manual. So, don't ever make your best offer right a way. Give yourself a little breathing room, so that you can come back once more.

But there are parts of the country now (west coast) where a lot of cash is coming in from China and it's difficult to compete, even with cash

I admit that I did not read all of the replies, but I thought i'll give you some of my experience:

I had some extra money and bought in a particular in-town neighborhood in Atlanta. With purchase and fix-up I'm in the SFH at 15-20K and the duplexes at $ 20-25K. This is a 99% black low-income neighborhood. I had property management when I bought, because I was in California. Then moved back to Atlanta for 1.5 years and managed myself. Then found someone to manage again and that was a disaster.

- Tenants in these neighborhoods typically don't have bank accounts. They deal with cash and money orders. They're used to paying rent directly and will not mail. So, you need to go by and pick up or come up with other scenario. Can be labor intensive, if you don't live close

- Tenants often live paycheck to paycheck and don't actually have much in savings. So, one emergency can create chaos and they'll have to chose between fixing their car to go to work, getting food for the family or paying rent. So, there can be a lot of evictions and turnover.

- It's the kind of neighborhood where certain people watch and the minute a house is empty they will break in and take anything they can sell - water heater, heating system, tear open walls and take wiring etc. So, I put a wireless alarm system into each of my units, so that I get an immediate call, if someone's in there.

- People can get very nasty, if you have to evict. They will call code enforcement and even bust out a window, just so that they can tell the inspector what a horrible landlord you are. And once there and told a sob-story by said tenant, they will find all kinds of little things in an old house.

- Appliances disappear with every eviction, so I only buy used ones. I have a great appliance guy. If something breaks I can just give him the address and the tenant's ph# and he takes care of everything. If the repair is high, he'll suggest for me to get another used one for $ 200.

- I learned that most property managers don't want to handle the low income neighborhoods, because it's labor intensive and their overall take-home is smaller than in a more expensive neighborhood. The few that do work there charge a high monthly minimums, like $ 100/unit, when I have some 1/1 with $ 300/month in rent. That makes your management percentage wise quite high.

That's just off the top of my hat. Overall, I don't regret it. And if I had more money I'd love to buy more right in that neighborhood. I bought with cash, so I don't have to worry about mortgages. Something called the 'Beltline' is being built in Atlanta and my neighborhood is bordering it. So, while I have good cashflow now, there's stuff happening that will be icing on the cake.

Wayne Brooks, but wouldn't paying off the wrong mortgage be a title issue and the title company could put pressure on the closing attorney to correct this? Of course it depends on where this is and whether closing was done by real estate attorney or title company.

Wouldn't the closing entity also have insurance that covers them for any mistakes made in-house?

They don't have to put in the work, but you can maybe get some bids for a new roof and then ask them to lower their price by $ 4,000 or put $ 4,000 in escrow for a new roof or whatever number you agree on.

If you walk away, it'll cost them more than that in lost rents. The market is slowing down and it might be another 3 months before they'll find another buyer.

I don't necessarily suggest for you to pull out of the deal, but make them think that you might. Bluff! If they think that you're completely emotionally married to the deal they won't negotiate very much.

is there something that the property doesn't absolutely need right now, but that could come up in a few years? New rood? New paintjob? New heating systems?

Ask them to lower the price, if there's nothing else that you can think of.

Also, when negotiating, make sure you mention the big risk you're taking that the tenant might do a lot of destruction to the property, in retaliation for the eviction. Don't let them talk you into only considering 1 month's rent or other small amount.

I've never done this, so take what I'm writing with a grain of salt.

Every county is different. It's not just the size of the lot, but road frontage that makes the difference.

For example, this could be a very long and narrow lot - 75' wide, with 1 house built behind the other. The zoning might have a requirement of 60' road frontage for each house. That would be a problem and you'd have to deal with easements etc.

If it really can't get subdivided, maybe there's a way to treat it like 2 condos on a common piece of land?

What jumps out at me is that there's no title work.

Did you pay for title work? Look at your closing statement. If not, then you would have specifically turned it down before closing and you'd remember. Personally, I always get title insurance.

Could it be that they just say that there was no title insurance, because they don't want it to get back to the title company and hurt their record?

I would look at this as a great opportunity to renegotiate the price or bluff to not close ;-). The seller is not holding up his/her end of the bargain, so, you should get something out of it or be able to pull out of the deal without penalty.

Are you planning any renovation? Maybe you can ask for a certain amount to be put into escrow for repairs, so that it's rolled into the mortgage and you don't have to come out of pocket.

The seller is in a tough spot and you have all the power. If you were to walk away they'd have to start all over with finding a buyer. In the meantime they have no rental income and it will likely cost them more than a discount to a sure buyer would.

I

Just for fun I've been tracking listings in Realtor.com for the past month and while inventory slowly climbed, this weeks seemed to have an extreme jump. Was labor day some kind of cut-off for bank inventory, maybe?

This is San Francisco bay area

date Hercules Berkeley 94801 San Rafael San Jose

8/8 22 99 39 ? ?

8/23 28 105 48 149 1871

8/29 33 104 46 148 1814

9/4 31 149 60 163 1891

9/5 33 160 83 184 1994

What's going on? Has anyone else noticed such big jumps in their area?

Michaela