All Forum Posts by: Nate Richards

Update - So it's been a while and I ended up getting this property mentioned above. I used the rationale provided, that it's the listing agents responsibility to obtain the highest offer to entice them to counter. 

Heres how it went. I responded to the listing agent directly (cc to my agent) for fear of being censored by my agent, that 

"XXX,

Thank you for the opportunity, however I do not participate in bidding wars. I can reply to a counter offer immediately (within an hour). Should you choose to counter, my offer will still be an all cash deal. Feel free to contact me once you are in a position to accept an offer."

4 working days later I received a counter offer $200 above the "competitions" initial offer. It was not an all cash offer. 

We closed 10 days later.

Thanks to all, who got me thinking about this scenario how to leverage the listing agent for my benefit. 

I completely agree with Marcia on this one. With SFR the only person who cares about the lawn is also maintaining it. On multi units bite the bullet and hire a service, they typically handle snow removal around here too. You won't have worry about supplying salt from 1500 miles away either, or who's going to sue you for not knowing how to operate motorized equipment.

Welcome! I'm local and just getting started as well. Bought 2 properties this first year. Keep us posted on how your REIA meetings go. They have yet to show me a compelling reason to join when you visit their website. BP rocks!

@jay hinrichs, are you suggesting that I am possibly only bidding against myself? 

Yes an agent must work in the sellers best interest. But is the agent only expected to be truthful with their own client? They aren't being asked to look out for the buyer, (I have my own agent for that), just not be dishonest. You say this (dishonesty) is par for the course, so there are potentially no other bidders. If I've been misled 2 out of 2 times already that I know of, I should assume they are also lying about having multiple offers. No? 

Time to walk. I'll avoid this agents listings in the future. Thanks! 

Thanks everybody for the quick responses! Tons of good info as usual. 

Yes i am a novice, offering on 1-2 properties per week.  Trying to aquire 2-4 properties a year. 

This is a probate case, I've bid on half a dozen estates but none probate, so the 2-3 week thing is throwing me. 

(Not disclosing that only a full price offer could close quickly is deceptive - which is unethical)

Someone suggested I was potentially angry, I'm not, it's a math problem plain and simple. However, it's frustrating to be deceived for no reason.  (Told it's able to close quickly, and told its being evaluated. When in reality they wanted to hold out for a higher number)

In prior experience dealing with listing agents for estates, they have disclosed that they were delaying to see if a higher offer comes in, and sometimes even provide a time frame.  That is completely reasonable and understandable.

In this case we were led to believe (told explicitly) they were seeking court approval but in reality delayed that submission until multiple offers arrived. Deception plain and simple. From college thru my entire working career I was taught that intentional deceptive practices were indeed unethical. Past history with other agents would seem to confirm as well, though surprisingly not viewed that way here.

I'll sit on it, if the sellers agent is truly trying to get the best offer they can then it's their responsibility to investigate via a counter to my offer with something they have in hand. After all, they don't even have a deadline requirement for my highest and best offer, since they dont know when court will reply. A 4th bidder could jump in 3 weeks from now while waiting on the court. If they won't, oh well.

Thanks again for the great feedback everybody!

Hi Guys, 

I have a question, due to a situation that has me a little flustered to say the least, and quite frankly wondering if the listing agents actions are; (1) ethical or (2) legal. Please let me know some opinions.

Setting - Location NE Ohio, estate sale, SFR listed slightly below market but needing minimal repairs; new roof, int paint, & BA update which would bring it back up to a full market value investment, and advertised as a "Quick possession, estate to be sold "as is" condition".

Situation - I personally inspected and offered via my agent @ 20% below list, all cash, 3 day close, on 1/15 (2 days on market). At that time there were no visitors to the home (snow was undisturbed). On 1/17 we followed up with a status request, and reply that Atty was reviewing the offer. On 1/20 we followed up, and were informed that the Atty was requesting the judge approve a sale below list price, which was also the tax appraised value. Late on 1/21, we followed up again on court status and were informed that there is now another offer, and court review will take 2-3 weeks. Today, 1/22, we were asked to submit a "best and final offer", as there are 2 and soon to be 3 offers. I could have closed on this home by 1/19 if the seller was actually able to do a quick possession as advertised. We requested confirmation that the court has approved a quick sale and that we be informed of their best offer/counter when they are able to sell, and I will respond within 1 hour. They have replied that they do not know how long approval will take and that I need to submit my best. So my questions at this point;

(1) Can you advertise as quick possession if you cannot complete a quick possession, this seems like false advertising?

(2) Is it unethical as an agent to sit on an offer for 7 days in order to create a multiple bid situation?

(3) Is there a way for me to compel a counter which I can accept or decline, especially since my offer was in uncontested for so long?

I have heard that an agent is supposed to disclose the value of the competing offer if you request it, but I am not an Agent. This also seems like unethical and possibly illegal behavior.  In the past I have submitted a "best offer" (a unique one like $123451), and been "outbid" by $1, ($123452 listed on the transfer) on a number that could not have been duplicated by another party, so I know that my bid has been shared with 3rd parties in the past. 

I like the property, but we're pretty close to "all the money", and I would like to get it if possible, which is why I am requesting a counter when sale can be completed. On the flip side I'm frustrated enough that have contemplated just jacking the price up way over list and walking away after 45 days as no deposit is required.

Sorry, (serious question) where is he making 5-10% in real estate on a small amount like 9000, which he can start immediately in the next 1-5 days like a car loan? (and get out of on short notice) If that investment is available, haven't we already been earning 5-10% while we accrued this 10k?

We have to assume this is personal, (a beginning investor) not an S corp, or his accountant would have made the appropriate tax based business recommendation. Most of these comments like to use the argument of % return vs. an arbitrary "I don't want a payment". The same persons however don't "invest @ x%" the 2.99 they saved daily on coffee, so it really doesn't hold up. 

I would love to see the numbers on OP's DTI impact with and without the car loan, @ 100k gross income (ave joint income), with a typical 25% ratio for the primary home. How much investment property financing does he give up for the same amount?

Shooting from the hip, the car payment of $161 looks a lot like a 30yr payment on a 35k rental that generates $850 gross/+$200 net so I'd rather trade the car payment for a house payment (which a newbie can't do while holding a loan on the car due to cash flow DTI limitations)

Since this is ultimately a personal finance (not business finance) question it becomes more individual preference and the calculations have not all been factored in. He hasn't even stated that the balance would be invested at all if not used for transportation. 

I would lean towards reducing required negative cash flow at this point. Too many unknowns.

Welcome Sakeena!

You have found a great site to learn from. After years on the side lines BP answered most of my questions and allowed me to finally take the plunge. 

Feel free to reachout, I'm local and invest in North Hill. 

Best of luck! 

Welcome Jesse,

I currently invest in the 44310 zip code, so take this advice with a grain of salt, I am your competition after all! 

It is as you describe, C class homes with good cash flows. However, as mentioned in many, many, many podcasts including the latest, the area requires intimate knowledge of it, as the values and rents change from block to block. Literally, a 1000 block 3/2 can rent for 25% less than a 900 block 3/2 and vice versa. My wife grew up here and her mother still lives in the zip after 30 years, so I have a leg up. 

There are roughly 14 zip codes in Akron and about 1/2 of them are what I would consider acceptable. The flip side to that statement is that my neighbor owns 20 units in Akron zip codes I wouldn't touch and she does quite well too. The bottom line is, how confident are you with the boots on the ground? I have seen a recent jump in purchase prices which is also a bit concerning as the rents are going to stay put for a while IMO. I wouldn't touch a flip there, not enough profit and too long to turn over. Good luck, and don't out bid me!

Hi Tammy,  

I live in Tallmadge about 15 minutes south of Hudson. Any adjoining community will be great. Stow, Streetsboro, Twinsburg, Cuyahoga Falls, Kent, Tallmadge, Boston Heights, Macedonia. I'm a newbie so I stick to Akron (affordability) and trying to get into Cuyahoga Falls for higher rents. You'll be shocked at the home prices, and don't sweat the traffic. The worst day here is better than what you are used to any day. 

Feel free to contact me anytime. I  travel ne Ohio for my day job so I've at least seen most of these areas. All the suggestions have been spot on.