All Forum Posts by: Rob Forest

On my recent inspection of one of my units there was an insane stench of dog urine on the floors. A previously decent tenant had just let his dog have his way with the place. It's likely a serious health issue. He even replaced all the carpet himself and it had zero effect. Got a quote from a disaster restoration company and it came in at $16,000. You read that right. Quite a bill for a unit that rents for $700 a month.

I can end the month to month lease and insist the tenant pay the cleanup bill, but they will likely just skip town and I'll never see them again. I don't mind going through small claims to garnish wages, but the limit is $5k here.

Do I have any other options? Thanks for any advice.

Quick question: The 31 day rule in SF for STR is because tenant protection kicks in at 32 days, no? Are you worried someone couldn't claim tenant status? SFRs aren't rent controlled, but they would still need to be just-cause evicted. Just curious what your thoughts are, or if I have this wrong.

Great answer jeffmorelock, thanks. This is exactly what seems to be happening. I called the listing agent and it sounds like the two BPO estimates have gone in and they are deciding whether or not to repair the place or sell it as it is. My original question still stands though. If the auction bid started at 140k, and the BPO estimates are in the 200 range, there must've been a reserve price, correct?

 I hope I don't have my expectations set so high that I expect to get it for 40% off retail. It would be nice to get it at 75%, as an as-is sale, and do some repairs myself. If for some reason they prefer owner occupants, that may be a possibility as well. Financially I don't understand why they wouldn't just go for best price, quickest though.

 I don't mind haggling or waiting or any of that. I'm not a high turnover investor or anything.

That's what I'm getting at. If the difference between auction is, as I understand it:

Auction: may have liens, no inspections, lower information purchase.

REO: Bank is looking at outstanding debt, doesn't know the market.

So the question is: if there were no bids at auction, does that give you good information about the market or is the starting bid a pipe dream ? Is that a reasonable starting point for valuation or does that price represent the additional risk premium bidders take when buying at auction?

Thanks!

Hello,

I'm new at thins and looking at an REO to buy and hold. I have my eye on a particular property that did not sell at auction and really have no idea what a reasonable listing and accepted offer price will be once it's on the MLS.

The fair market value is about $180k, it got no bids at auction at $140k. It's underwater, and total outstanding debt is $300k.

A few things I'm wondering:

Was the $140k starting bid at auction just a teaser rate and the reserve would have been much higher?

Am I dreaming if I think it didn't sell at auction for $140 so they would accept lower when it's listed?

Thanks!