All Forum Posts by: Mike Palmer

I am not sure I follow you Mark--the 50% rule does not take mortgage into account. How much did you pay for the place you have there now?

I am not that familiar with it, but I have never heard this. Yeah it probably is hotter than regular grass, but I doubt it is anywhere near as hot as rocks, concrete, or asphalt. And I personally would not be the least worried about toxicity--if it was (or became) toxic it would be recalled or have lawsuits and no longer be available. I know you can order it from Costco (among many other places). That doesn't make it the best solution, but one more option to consider. 

Sounds like you need to partner, or give the lead to an experienced investor for a bird dog fee...

What about artificial turf--costs more up front but requires NO water, NO mowing, and NO weeds...

I think this is may make or break your deal. Did you put down earnest money? If so I don't see how they can claim to not know what they signed or what is happening. If not, I think you chalk it up as a learning experience and/or follow @Jeff Rappaport's advice. 

Bear with me here--this is a long post and I am going to go out on a limb because my take on the interest rate vs. price is a little different than most. It seems EVERYONE says that interest rate is most important. Well it probably is in general and for the everyday homeowner's monthly payment, and if you are only talking about paying an extra $5k for a property and getting a super low interest rate I would typically agree. People often even pay $5k or more just to buy down their rate, or overpay by that much or more to get seller financing or better terms, etc. 

But the flip side that I never hear ANYONE talk about, is that if you overpay for a property you have overpaid and there is no way to change that. There are multiple ways to manipulate the interest rate (refinance, sell, pay off, etc.), but you only get one shot at buying for the right price. Most people tend to sell or refinance every 7 years anyway. If you are planning to buy and hold for 50 years and never refinance, you may have a lot of capital locked away that is no longer helping you buy more property. 

There is also a reason that hard money lenders exist--you can WAY overpay on the interest rate up front if you buy right, but you cannot ever get out from overpaying (except through foreclosure/short sale/etc., which I don't include). 

I think you need to factor in both (among a variety of other things), but I certainly wouldn't overpay (by much anyway) to jump in now just because rates are low. And if/when rates go up, property values tend to stagnate or decline anyway...

It sounds like you are also only considering conventional financing. There are a lot of other avenues of buying/financing property (such as seller financing, private money, cash, options, sub-2, trading, partnering, etc.). The interest rate is only one factor to a deal, and frankly I think it is silly to overpay for a property just on the premise that interest rates are low. Yes the interest rate is an important factor, but it is not everything. 

I remember sitting in the living room of the apartment I was renting in 2007 watching Suzie Orman babble something about buying a house, and I was going through the same thing then that you are now--thinking I have looked everywhere and tried everything and the numbers just didn't make sense, but to me they didn't so I didn't buy. I made offers and had a few things under contract, but pulled out of all of them for one reason or another. I was frustrated and didn't like the idea of continuing to 'throw my money away' on rent every month, but most of the people I know that did buy then regretted it. All that money I 'threw away' continuing to rent saved me 10 times what I paid in rent for a few years. I then came in and bought a house a few years later from someone that took the plunge and found out later the numbers didn't make sense...but they got caught up in the hype and the 'buying something to buy something before they were all gone', and they way overpaid. I would still say owning is better than renting, I am just saying it doesn't make sense to buy just to buy.

Look at the whole picture, establish YOUR criteria for what makes a deal worth buying, and then only buy if it fits your criteria. 

Based on her response it seems to me she either didn't fully read or didn't really understand your first email (you already answered #4 in your email...), and/or doesn't really understand wholesaling. Given that she said it is worth a try I would give it a try, but you will probably have to coach her through the deal. Assuming you are not an agent and won't be using one she will be getting the full commission, so you should be able to get her on board with helping you complete the deal, or you could try convincing her to reduce the commission if there is no buyer's agent on the deal, and then maybe lower the price accordingly. 

I would reply that the answers to her questions will all be covered in your offer, and that you will write one up and submit it. 

Is that factoring in the HOA costs? Why are these in an HOA, and what does the HOA do/provide in this case?

 That looks great!

I am a little curious about some of the comments here about seller's markets being where you would buy. I understand that prices MAY continue to climb somewhat, but why would you want to buy in a hot seller's market competing with several other buyers? Wouldn't it make much more sense to buy below value in a buyer's market (that is why they call it a buyers market afterall)?

I am just curious of the thought process behind buying in a seller's market. Like the original poster I am actually thinking about selling some properties while I can get top dollar from all the crazy bidding going on and then buying again later when people are trying to unload when there are no buyers around. 

Those of you that are saying to buy in a seller's market can you share more about your thoughts on that?