All Forum Posts by: Nick G.

@Megan Greathouse 

If those are your feelings, you may want to consider getting your license and representing yourself. There's a pretty long list of reasons why being an unrepresented buyer is a bad idea, at least in my state of California. You may be thinking purely of the property-finding aspect, but there's a lot more to consider.

First off, as an unrepresented buyer, the only sellers who will take you seriously are usually going to be FSBO's, who may not know any better, or scumbags who know they can take wild advantage of you - any listing agent worth their salt is going to see an unrepresented buyer as a tremendous liability and amount of work for themselves and their seller.

From a liability perspective, you probably would have little to no idea what you're doing, which isn't anything against you; most people, sometimes even seasoned investors, don't either. They can crunch numbers and make logical decisions pretty well, but their knowledge on risk management, the contract, and covering their own backside is usually pretty terrible, especially when it comes to technically tricky issues and problems arising within an escrow.

Now, granted this may be 100x bigger of an issue in my highly litigious state compared to yours, but I still think it's important wherever you go.

Additionally, getting rid of your "middleman" might sound appealing, but - assuming you have a sharp agent - it's often about as smart as getting rid of your attorney and representing yourself in a lawsuit, or performing a surgery on yourself. Everything may seem straightforward... and in some cases, it actually may be! But when things go wrong, do you have the skill set and expertise to foresee far-reaching consequences, make the right calls, problem-solve, and protect yourself?

Again, this all comes out of a Southern California mindset, but I think it's pretty valid in any market. I, by the way, don't have a super great opinion of most agents, or attorneys for that matter - I'm referring to the minority within each profession that truly are experts in their field.

Hey @Chris Virgil-Stone, I personally like laminate a lot and it's my choice for most properties, it's 1000x better than carpet (except sometimes in bedrooms, depends on the place) and much more affordable than hardwood. It looks good, it's cheap, and it's pretty durable. Yes, moisture is its Achilles heel similar to real hardwood, but as long as you don't have a leak directly onto or under the floor for any extended period of time, it shouldn't pose too much of a threat. Plus it's super easy and cheap (and wise) to store spare slats just in case.

Just for technical accuracy by the way, Pergo is a brand of wood laminate flooring, not the type of flooring itself... but everyone knows what you mean.

Hey @Tony Cardello, you really will want to defer to your agent on this one, I have no idea how these things normally go in your market or what rights and protections are afforded to you in Oregon.

However, I can tell you that if anyone ever asked me or my clients here in CA to do such a thing, I'd tell them to take a hike.

What happens if the work isn't done properly? What happens if, unrelated, the roof randomly caves in? What happens if anything happens that results in you needing to leave the escrow despite your best intentions?

I don't know how it works in Oregon, but those would be my feelings.

@Jay Sechowicz There are 90% options out there, not too uncommon as long as the property is owner-occupied. The one I'll be using very soon is an 80/10/10 refi, where there's an 80% first at prime, a 10% interest-only second at roughly 6%, and the other 10% is your required equity. I'm not a lender so I can't help you with much more than that, but just for your own knowledge about what might be out there.

@Terrence Ward, you should read Kiyosaki's books. He educates on the value of working hard, often for free, in order to learn and become sharp and successful (no mention anywhere of paying a guru.) I wouldn't be paying much mind to the company that he started that bears his name, but has since been sold off. Plus, your friend already told you he wasn't impressed.

In the future, try searching past forum posts to begin your search for feedback!

See: https://www.biggerpockets.com/forums/79/topics/316...

and this https://www.biggerpockets.com/forums/79/topics/131...

Cheers!

@Agypse Gos

To your first question, it will likely affect interest rates, which will probably do nothing but fuel the market.

To your second question, do you live in Guam? Lol. In all seriousness though, it's unlikely to have any perceivable negative affect on U.S. real estate. If anything, it would fuel it, since falling rates fuel purchasing power, and rising rates fuel purchasing activity (fear of missing out.)

@Jennifer Cheu I can't comment toward your agent, I can only assume they're doing their best to look our for your interests and your interests only, since they have a fiduciary duty to you. On the other topic, in my state, all homes are sold as-is unless otherwise negotiated. It may or may not be the same in your state, but what that means in CA is that requests for concessions following inspection are intended to be for unforeseen issues that were discovered during the inspection period. It also means that whatever price of the home is originally agreed-upon is understood to be the price of the home as-is, including all issues and problems. In other words, the price of the home already factors in obvious things like an old roof, which means asking for a concession for that item would be trying to double-hit the seller for it.

That may not be the case for you, I'm just speaking broadly to how it works in CA. If I were in your shoes, I probably would have at least tweaked the request amount just to avoid it looking the way I mentioned. Lol.

I also agree with your principles on why you're buying a "meh" deal by BP standards. I did the same thing and it was an excellent decision on my part, congrats on almost being a homeowner, and giant bonus points for buying a multifamily to do it.

@Jennifer Cheu In my experience, a verbal offer is a nonexistent offer, and operating otherwise is unprofessional and unwise. Also for your consideration, you originally offered $420,000, which is $15,000 less than what you're currently under contract at. So your attempt to ask the seller for $15,000 comes off as a thinly-veiled and obnoxious attempt to get back to your original offer amount. 

To me, it would communicate that you never had any intent to actually be under contract at $435,000, which demonstrates bad faith and unfair dealings (which in CA is a breach of contract,) and I'd be kicking you to the curb and trying to keep every dollar of your EMD that I could. I'd also be blacklisting your agent for suggesting to a client that such a thing was a good or fair way of conducting business.

None of this is directed at you, by the way, I simply have sharp feelings about the advice you may be being given, which of course is only based upon my own practice in my own market.

@Kimberly H. Real estate agents are recognized as quasi-attorneys with legal real estate expertise of an extremely narrow scope. Discussing how offers and counter offers work completely falls within that scope and 100% should absolutely be explained to every single client an agent works with. Not only is it good business, it's just the right thing to do.

It all starts off with your goals @Scott Howell. You need to dial in what you want your financial scenario to look like in the future before anyone can possibly help you answer that. You also should dial in what kind of real estate you are comfortable doing, since there are so many different ways to be successful. Those two things are necessary for anyone worth their salt to really give you decent advice.

That may sound off-topic, but that is first and foremost the best metric to figure out what you should be doing with a property, since properties often will often serve one type of goal better than another.

As for evaluating the numbers on any property, they all use the same fundamentals:

1. Current value based on comparable sales.

2. Current rental value based on comparable rentals.

3. Future value based on repairs/value-add.

4. Current and Future Market Conditions

Good luck to you.

HI @Sam Smith. Your questions are best suited for a local real estate professional, probably a Realtor, but I can answer your question generally.

At the end of the day, you should base your purchase price on comparable sales, it's the safest route to go. If I were in your shoes, I would enlist the help of a local agent, one whom is savvy with investors (hard to find, that) and determine roughly what you believe the fair market value is.

Based on that, you make your offer. Since homes not sold between investors are often bought or sold based on emotion, you must keep that in mind. You may decide to start by offering a lower number with the intent to negotiate back and forth to arrive at a compromise number that both parties find acceptable. However, if you go too low, you may offend the seller, which ends up backfiring and taking away a good amount of your negotiating power. If you offer too much to begin with, you may be giving up negotiating room.

It all comes down to what your goals are. On this particular instance, knowing nothing about your specific market, I'd say a home that has been on the market quite a long time may be a good opportunity to offer the seller less, since they may be more motivated to sell at this point. Keep in mind though, assuming your numbers are accurate, a home that is that overpriced indicates either a seller or a listing agent with unreasonable beliefs or expectations. Therefore, do not expect your reasonable rationale to be met with a reasonable reception.

Just some initial thoughts, but again, you should defer to a local agent who is knowledgeable on the trends and characteristics of your area.