All Forum Posts by: Michael Lee

Just to update this old post, we ended up selling the property by connecting the seller with the end buyer, and we received a “fee” from the seller. We didn’t need to close on the property ourselves, and we received the difference between what the buyer is willing to pay and our agreed upon price with the seller. If we were to this again, we would’ve gotten a power of attorney to make the transaction go smoother.

Hi @Sandy S.

As you may already know, the commission you agree to pay (that 5 or 6%) is split between the listing agent (your agent) and the buyers agent (whoever brings the buyer). For example, the split might be 2.5% to the listing agent, and 2.5% to the buyer's agent. The dual agency form lets you know that if the your listing agent finds his/her own buyer (a buyer without representation by another agent), that your realtor will be able to get the full commission (the other 2.5% from the buyer side as well). 

You are correct, if your agent finds a buyer, he/she cannot put you in his/her best interest.Your agent will act as a transactional agent at that point to keep everything fair. If you do not feel comfortable with this, you can tell your agent. Some agents will be ok with it, and will ask someone else in their office to represent the buyer.

Another thing you can do is to ask your agent to reduce their commission if they find their own buyer. (For example, you list with them at 5%, and if he/she finds their own buyer, their commission is 5%, which is a win-win because you're also saving money)

I am an agent myself, but I also use agents to represent me for my listings as well. The most important thing for me is getting the transaction done! Having an agent represent you as well as the buyer makes the transaction so much smoother, because it's 1 less agent to deal with :)

Hope this helps!

buying a property as-is (no repairs) and an inspection contingency are 2 separate things. If you have an inspection contingency clause in the contract stating you have x number of days to perform an inspection (most state contracts have that especially if you’re using a realtor), then you can legitimately cancel this contract without losing your deposit. Then you can negotiate a new price if you like.

Hi Kibby,

Seems like you are looking to purchase this for the appreciation? As you mentioned, it's not a solid cash flow property. Are you buying this property under market value? Is this property a value add? (Will you be doing work to increase value?) If so, what is the ARV?

Of course, everyone's strategy is different, but personally I would not consider buying anything strictly for appreciation. I would only buy if it is value add / good cash flow.

Just because multifamiles are rare, doesn't make it a good deal for investors!

Gotta be careful, mold is a health hazard. I would definitely look into the cause of the mold. Hot showers shouldn't be the cause of mold, but maybe you can ask them to keep the door open after showers. Would it be possible theres a leak from above, say the roof?

Also, the town will not reassess it based on what you do with your refi/heloc, their appraisal is for the purposes of knowing how much they think your property is worth and how much they can lend you.

BRRRR stands for buy, renovate, rent, refinance, repeat.

Basically this strategy is you buy something cheap enough and renovate it, so you can refinance out of it and get all your money back.

EG: Buy a house for 150k, renovate it for 50k, rent it out for $x/month, have it appraise for a refinance for $285k+, and take out all your initial capital. Banks on a refinance typically lend at 70-75% (70-75 LTV) of what the new appraisal is. At that point you have a property that cash flows and you have no money in the deal :) And repeat

Hey Demetri,

Welcome to BP! I live in Lyndhurst as well. 

Rent for a 2/1 newly renovate is around $1900-2100 depending on the finish. My neighbor spent a ton of money renovating one of his unit (literally the best 2/1 you can find in lyndhurst) for ~$1900. You're competing with the luxury buildings that are popping up everywhere now, some with amenities.

I finished reno on my property here in June of last year, haven't gotten any tax increase yet (fingers crossed).

As for your next deal, I would agree Heloc is probably a better way to go rather than a refi for the reasons mentioned by @Jaysen Medhurst. If you do a cash out, you ll have money sitting in a bank, not making you any money until you find it/buy, while your existing mortgage will go up, interest rate also went up a bit. You ll get hit with all the fees associated with the cash out as well. With the Heloc you can use what you need and put it back once your done.

I think whether or not to add dormers or even adding a level, will be dependent on the town and comps. Not all areas make sense to do it. Plus adding dormers will increase your hold time with getting permits and inspections. If the numbers work and its an area for it, go for it! 

Does your comps have cape homes with dormers? Will the area support a colonial at a higher prices to add-a -level?

Hi Ani,

Welcome to BP! Good job on running the numbers in detail. Did you purchase the property primarily as a rental or for yourself to live in? Based on the numbers, it is not a cash flowing unit. The tax and hoa alone is $700.

There really isn't much that can be done; only other factor would be if you can raise the rent (by renovating/upgrading the unit if it's not already done). But not knowing what area this condo unit is in, it's hard to tell what the rent amount this area renters are willing to pay. 

Or you can manage the property yourself. Vacancy and repair are reserves; of course you can always count that towards your cash flow as well.

Capex is for major components, in your case probably just the hvac, since roof and everything else should be covered by your hoa.

Sounds like it was suppose to be a primary residence for you, and you decided to rent it out. If this was purely an investment property that was suppose to cash flow, you could've ran the numbers prior to buying it and know that it's not a good deal. If you're looking for cash flow, consider selling it and buying a multifamily.

The good thing is, the tenant is paying down your mortgage, helping you build more equity.

Things like these is only an issue when you get sued. 

Its good to have a partner, so I dont have to give offers :)