All Forum Posts by: Richard Marshall

@Eric F. Yes but if they bid it too high and they are the final bidder they are S.O.L. And when that happens they have to go back to the next highest bidder and ask if they're interested in their most recent highest price. Had that happen too, the buyer usually comes back thought.

I'm a broker and have sold a few deals for clients on the site, but not at my recommendation because I believe a 'standard' marketing campaign is more beneficial to the highest price and finding the best buyer. It's not that it isn't a good platform for selling, but there are so many little things that I feel hinder the buyer pool. Each buyer must register, provide proof of funds, and place a deposit (can be done in the form of a credit/debit card hold) in order to bid on the property - These rules I don't mind and think they show the seriousness of a buyer. And I will say, out of the dozen deals I've been involved with on the site, we've had decent success, just a limited buyer pool in comparison to a typical marketing (read the reason's below). If the broker you hire to run the deal along side auction.com knows his market and who to call, you'll do just fine. 

What I dislike a lot about the process is four things:

1) I dislike the bidding process on this site because ten-x (auction.com) can bid the property up themselves - and yes, it's stated in the terms when you register so it's okay for them to do so. So not only are you bidding against potential investors but the auction site has the ability to bid up the price to meet the reserve.

2) Each buyer has to pay a $50K premium/"transaction fee" or 5% of the purchase price upon closing- whichever is higher. Just an extra charge that could keep a buyer from being able to go a bit higher in pricing because they know they have that additional charge to take into account. For example, we recently sold a deal for a client on the site and the buyer's final bid was $1.3M but they had to actually pay $1.365M at closing.

3) The terms/contract process can be very difficult for first time buyers or people with less experience. If you are the winning bidder, there is NO NEGOTIATION over contract length, contract terms, etc. Once the auction closes, you have 24 hours to sign their contract, start the process, and close within 30 days.

4) Lastly, i dislike this platform because buyers must pay cash only for any property they purchase on the site. There is virtually no time to arrange financing in a 30 day close. Although the buyers know what they're getting into, the issue is that not everyone has the ability to buy all cash. Lots of people have the 20-25% down payment to purchase a property, but much less have the ability to pay 100% of the purchase price in cash. Thus my biggest gripe with selling on auction.com, it cuts your buyer pool down substantially.

Hope this helped! Feel free to message me with any questions 

@Stephanie P. @Anthony Chara I appreciate the feedback! At this point if we decide to move forward we would only want to refi the deal if they'd do it on appraised value, otherwise we are content holding for a year or so and improving the property and it's operations then refi'ing. As someone commented above, they know of a few small local banks here in Ohio that may be willing to lend on the appraised value sooner so i may take a stab at talking with them. 

@Dell Schlabach thanks for the heads up, i was hoping to shop around a few smaller banks to see what each was able to offer.  I have a few clients in the Mount Vernon area actually so maybe when i go to meet with them i'll kill two birds with one stone! 

@Julie L. that's basically what I've been reading so i kind of figured as much, but I wasn't sure if maybe there were some smaller banks out there that would do it sooner on appraised value. We would certainly prefer to wait if we have to and have the refi on the appraised value because quite frankly it will be much higher than what we may buy it for. The gentleman is on time constraints though so us getting a mortgage up front is probably not in the cards, that's why we we're curious.

Appreciate the response!

My business partner and I are considering purchasing our first multifamily rental in a small rural town in OH. We are working with an owner who purchased the property in 2012 when he retired and came into money. He has since taken over the family business which takes up all of his time, thus gave up management to a family member. Low and behold the family member started a second business and now has no time to run the property either so the seller is willing to part ways with the property.

He purchased the property in 2012 for $600K - putting 50% down - and is now willing to walk away for $370K (the amount of the mortgage balance and the money he has invested). Rents are $550-650 depending on the unit and tenant pays for gas, electric, water/sewer, and trash. The property is all 2BD/1BA town-homes, all brick construction, and the windows/roofs, and parking lot are in fairly good shape.

Our question is for anyone who has purchased all cash before and attempted to refi the property ASAP. I've read a lot saying that lenders typically have a 'seasoning period' of 6 months to a year (which would be fine) but we were curious as to if there is any possibility to refi sooner? The property would most certainly appraise for at least $500-600K given the current financial's, and we we're even conservative on our underwriting ($600 avg rent, 90% occupancy, $4000/unit in expenses, @ 8-8.5% cap). I've heard a few podcasts by investors who used this process and had luck talking to any/all lenders who would listen until they found one willing to refi quickly, and off the appraised value. Just wanted to know if anyone had the same experience or any additional advice?

Thanks! 

My business partner and I are considering purchasing our first multifamily rental in a small rural town in OH. We are working with an owner who purchased the property in 2012 when he retired and came into money. He has since taken over the family business which takes up all of his time, thus gave up management to a family member. Low and behold the family member started a second business and now has no time to run the property either so the seller is willing to part ways with the property. 

He purchased the property in 2012 for $600K - putting 50% down - and is now willing to walk away for $370K (the amount of the mortgage balance and the money he has invested). Rents are $550-650 depending on the unit and tenant pays for gas, electric, water/sewer, and trash. The property is all 2BD/1BA town-homes, all brick construction, and the windows/roofs, and parking lot are in fairly good shape. 

Our question is for anyone who has purchased all cash before and attempted to refi the property ASAP. I've read a lot saying that lenders typically have a 'seasoning period' of 6 months to a year (which would be fine) but we were curious as to if there is any possibility to refi sooner? The property would most certainly appraise for at least $500-600K given the current financial's, and we we're even conservative on our underwriting ($600 avg rent, 90% occupancy, $4000/unit in expenses, @ 8-8.5% cap). I've heard a few podcasts by investors who used this process and had luck talking to any/all lenders who would listen until they found one willing to refi quickly, and off the appraised value. Just wanted to know if anyone had the same experience or any additional advice? 

Thanks!