All Forum Posts by: Richard Mollel

I recently was aiding my client in bidding for a property on xome.com auction site. The bidding was set at $5K increments. Our maximum offer was $194K, and "another bidder" took it to $199K (5K increments) and "yet another" to $204K in the final minutes. It closed at 204K. The next day, the site reflected a "final bid" of $195K! This should be impossible since the bid increment amounts were $5K, and we have a system confirmed bid amount of $194K.

I sent a complaint email to xome.com, questioning how could there be a final bid of $195K, whilst my client's bid was $194K, and the final bid on the website on the day of the bid was $204K? Their answer was that the final bidder ($204K) walked away. Even if that were true, the next highest bidder should have been $199K, and not $195K. Further challenges to xome.com went unanswered. 

It appears to me that these auction sites could be bidding against real bidders to get the price up, then if real bidders walk away, and the site operators end up as "highest bidder", they "walk-away" from their own bids and arbitrarily select "a winner" as it happened in this case. 

How can consumers seek transparency against these auction sites? How can we ensure the bidders are actual, and not the site operators themselves? Has anyone else encountered similar challenges with an auction site and can share their experience? Any suggestions for steps to take?

Hi,

If the basement was finished, you could have asked and got as much as $2400-$2500/month. With unfinished basement, you will be competing with townhouses, though you have the advantage of two car garage and hopefully a spacious backyard for this area. So I would say about $2200 though if it shows very well, I would start a bit higher. The rental license will be from PG county, not the city of Bowie. 

I believe its best to start with a positive attitude....and look at where your rental yields could be higher with pool of high quality renters. Think about who your potential renter could be, and where they would likely want to be, based on their social and economical activity.

E.g you want to focus on IT guys with security clearance (high pay), then HW, AA, Northern PG area would be your best bet. If you are seeking nurses/doctors, find areas near major hospitals or even downtown Baltimore around UMD, Hopkins area. If you want to attract bar-hopping millennial's, think of DC or some downtown Silver Spring areas. If you are thinking College kids, then College Park or areas around Towson U. in Baltimore. You want to attract Govt contractors working Downtown DC, any metro accessible location will be your best bet.

Most folks don't wish to be evicted, thus it is a rare occurrence, unless of course, you don't do your homework and end up with a professional defaulter.

Hi,

As a beginner investor, I am surprised why you would start off with such an expensive area of the DC region, where outright, the total mortgage will not be covered by the rent? For investments, I usually assume the entire purchase price has a financing cost, even if the intention is put a huge down payment. For homes in the 650k+ range, a reasonable rent should be 6.5K/month (1% rule) while the reality is not more than 3.5k/month. You will definitely be subsiding this investment with a cash infusion for some time to come. So, if your intention is to "park" some money, I would say go ahead. But if you are looking to grow your investment, I would not recommend buying in this area as you definitely are only banking on property appreciation which may or may not materialize. The best investments have either cash flow or fast equity accumulation via shorter amortization (e.g. 15YR loans).

Property appreciation should be considered as icing on the cake.

I often invest in PG County, but recently discovered a new area, Owings Mills, MD. My new niche is 2B/2B garden style condo within a good school district, low crime, great community amenities and finally, cash flowing properties. I only seek properties that do cash-flow on a 15yr mortgage, not 30. So when asking about cash flow, be specific as to whether the loan is amortized over which term. Anyways, Owings Mills properties do cash flow about $400/month ON a 15yr mortgage, ie. after interest taxes, insurance and Condo fees are paid. If your interest is on long term financial stability, and you redirect all this cash flow towards the principle payment, you may be free and clear in about 9yrs or so. 

Howard County homes are generally highly inflated price wise and it would be difficult to find any decent returns there. If I were you, I would look into areas drivable within 1hr, such as Upper PG county - Bowie, Greenbelt, Laurel areas and Sub-urban Baltimore areas, such as Owings Mills.

I personally do have interests in these areas and I can tell you that homes in Upper PG county do receive multiple applications and rent out generally within 1 week, while Owings Mills, you should expect a vacancy of up to a month.

Montgomery county (MC), the purchase prices are inflatedly high and generally fetch lower rents. A 2B/2B Garden style Condo in Bowie, MD could be bought for about $145K couple months ago and easily fetch upto $1900/month. That price point, if you can find one in Montgomery, would only fetch around $1400-$1600 (in Germantown or the Layhill area of Silver Spring). The typical price for a 2B/2B condo in the areas I mentioned above for MC is closer to 180-200K, but the rents remain constant. Owings Mills has plenty of decent offerings in $145K range that easily rent out at the 1% rule.

[Btw, my first post in BP]