All Forum Posts by: Page Huyette

Thanks Matt Devincenzo for sharing your story. I was about to post my success story with the title: My Success: The Deal I Didn't Get but you beat me to it.

Actually, upon writing this post, its getting a bit long so I don't want to steal your thunder. I'll post my one which can compliment yours. Thanks for sharing.

Update: after the second look and more research into how high in rents we could go with a basement unit, we decided to pass and look for something that we could force appreciate more.

Instead we made an offer on the OTHER duplex I referred to with money down and seller financing that also needs work. This one has a newer, separate second unit with a lot of amenities, front unit has more curb appeal and is larger, and the lot is located in a business district on the edge of a neighborhood, so there are options. Offer was pretty low. Should hear feedback on the offer by this evening.

If they take the offer, great. If not, on to the next deal.

Just last evening I was reading through this thread after emailing my agent to clarify our relationship.

The challenge (and resulting clarification) came when she was showing us a multi-family property and my husband mentioned a different, similar property we'd seen with another agent a few weeks prior. This other agent had contacted me about the property after gaining our contact info from an inquiry I made on an REO that she had listed last year.

I explained through email later that evening to my preferred agent that we didn't have multiple agents running all over town for us, and I planned to use her for any transactions involving an agent. I felt it was necessary make sure she understood that I valued our professional relationship. I also think it's fine to use multiple agents if you are in a large metropolitan area or are looking for different types of properties (commercial vs. res, etc).

Richard P how do you factor in HOA fee increases? Do you base it on previous increases from the complex or???

What other expenses would I incur that would differ from SFR or multi-family investing that are unique to condos?

I tentatively type this post, as I normally cringe at the thought of investing in condos due to the lack of control over several variables.

However, since our market is hot and inventory is low, I'm staying open to all options. There is an affluent vacation area nearby, where long-term rentals are in high demand and extremely scarce (think--how much do you want for that closet, and will a futon fit in it?). I connected with an experienced agent that specializes there, and am looking at some condos with good locations, stable HOA's that she believes would be easier to sell than others.

I'd be interested to receive feedback on the good, bad and ugly to help me in my research. I enter into this as a skeptic, but willing to learn. If you run screaming from the thought of a condo purchase, please share your reasoning so that I many learn from it. Had a good experience--love it!

I'd likely be going for something that needs some work, would consider short sales and REO and would also factor PM fees into costs. A rough first pass shows typical HOA fees in the area running roughly the equivalent of 3-4% of purchase price.

I would start out smaller, with a duplex or home with apartment until you have more experience as a landlord and investor. Choose a property with a strong exit strategy with rents that will cover most of your expenses.

With this one under your belt, you can then go to friends, relatives and other lenders for funding the next one.

We bought our second property using the equity from the first as the down payment, held onto the first until it paid off the line of credit through rents, then sold for more than double the purchase price.

Jerry W. thanks for the ideas. When I did talk to my lender, they said there couldn't be more than 75% out in loans of any combination on the property. This was during a general financing discussion about a different property. That's not to say that another bank wouldn't do it, but their reasoning made sense.

I suppose a similar approach could be to grab the 20-25% down from an equity line on a primary residence.

Dan B. thanks for the detailed response. I would prefer not to rent to students due to the amount of repairs and turnover, but since this is a top/bottom duplex & not side-to-side, that is likely the target market. Your idea about renting per student could be more labor intensive, but it's definitely something to think about.

I especially agree with your #1 and #3 responses. I don't count on appreciation, but I do take it into account as part of my exit strategy, and if there is a refi out of seller carry as part of the deal.

The second duplex I mentioned, while in a less desirable location (still decent) might appeal to couples or families just starting out more, and I might be able to get that one seller financed more easily, at a lower price. That one has issues as well, but one of the units is very new and might be able to pull in higher rents over the long term.

What to do? Flip a coin? Put in an offer on both? Hold and wait? Thinking I should walk through both again on the same day and decide.

Scott W. I am estimating high on taxes in the event that we add the third unit, and have also padded the insurance to include an umbrella policy. The state reassessment is also coming up in two years (8 year cycles) and if prices keep rising like they have been here, taxes will go up even with it sitting as a 2-unit. I'd rather not count on appreciation or rent increases to cover it.

Nuhan Demirkan thanks for the kind words, AND the additional info. Just talked to our agent and was told that the seller's agent encouraged us to submit and the seller won't be responding until Monday due to technology constraints. Thinking the other offer may be pretty low. I talked to my local bank, but since its a new relationship with them from an investment perspective, I'm not going to use them for this particular deal.

We'll do a second walk-through tomorrow and compare our original rehab numbers with a second look. There's another duplex in a nearby neighborhood we looked at recently which, interestingly, is penciling out to be very close in operating costs and rents. That one has been on the market even longer, and has a more challenging location with no room to build, but I've been told the owner WILL carry, so I'm doing the head swivel between the two.

I'll decide whether to jump on one or get off the carousel in the over the weekend--stay tuned. Also not afraid to walk away. It seems once you get your head in the game there are opportunities everywhere. The important point is to jump on the right one.

Also wanted to provide some background on my pricing strategy. Last week a triplex two blocks away went on the market at 299k which is very low for the area. Condition is superior, 3 units with a wider lot and more architectural charm. Went under contract within 24 hours with 6 back-up offers. This duplex has sat for months with no offers. My agent and I bantered that, based on above comp, this one should be listed around 265k or so starting price. So, using that as my reference, and all the work needed, AND the DOM I don't feel badly offering 100k less than asking. I seem to remember someone mentioning in another post that if you aren't embarrassed by your offer, it is too high.

Trying to embrace that approach, with the numbers to back it up.