All Forum Posts by: Ryan Thomas

So, here are the specifics...the neighborhood in which I bought my first house has blown up for some reason. Our area in general is probably up 30% from last year, and this neighborhood is probably up closer to 50-60%.

Purchase price was 53k, and I've been offered 90k cash, out the door. After taxes and everything, that gives me 36,500 to do something with after I pay off the remaining mortgage (47k).

I've calculated that that's about 10 years worth of net profit on the rent. So here's the gamble: I hold onto the $$ until this bubble pops and buy back in at the bottom (in my area, 36500 would be two down payments on two solid rental properties in a "normal" market). Or, the "bubble" isn't actually a bubble (historical evidence strongly contra-indicates this) and prices never come back down, so I'm left with one less rental and a pile of cash that's being devalued by inflation.

What say you? Take advantage of this historic market and try my hand at timing it, or just keep going slow and steady? I'd have 2 other solid cashflow rentals if I sold this one, but again, I'd plan on reinvesting those profits in more rentals when/if the market returned to sanity.

Ok, so I'm looking at this house as rental property. It was built in 1990, recently renovated, and I've had excellent luck with this same style of house for renting.

We know the HVAC is on its last leg, but everything else *appears* to be pretty solid. My realtor suggested putting in an "as-is" offer to incentivize the seller to give us a bigger break on the price. Is this advisable? No disclosures were made on the listing (termite inspection or otherwise) but it was not listed as an "as-is" property either.

I've never worked with this particular agent before, but he seems solid. Still--trust but verify and all that.

 So I'm guessing that's a vote for "you should definitely back out"?

I have enough $$ to put down payments on one property per year (roughy) and max out my IRA contributions, so this will probably be the only property I can afford this year and still have enough cash reserves to be safe (we keep 5k per property and 6 months of our mortgage on hand as a lowest acceptable cash reserve baseline). I am not particularly wealthy and my and my wife's jobs are somewhat vulnerable at this particular moment. We still have them and don't have any clear indications that they're in danger, but all that to say that this cash may be the only capital we have with which to buy something for a while.

Full disclosure: I am very, very new to all this. I follow the basic rules: buy 1%+ properties, have significant cash reserves, etc. etc. So far I have 2 rentals that have been doing great and are absolute cash cows.

Property values are insanely low in my city, but the rental market is killer due to having 5 colleges within 10 miles and a rapidly growing city. So the property I'm looking at is a 2 bedroom, newer construction home (2011) listed at 64900 which is considerably under the tax assessment. Offered full price + $5300 in repair credits (the current tenants smoke, so I'm thinking repaint + refloor + install new HVAC, which is unrelated to the smoking) and the seller will pay $1300 of the closing cost. So basically full price, but I get $6600 in cash back essentially.

I would most likely be able to get $700 in rent per month, but that was as of the market pre-panic. And obviously, home maintenance would be next to nothing for the foreseeable future.

Considering the current state of affairs, should I back out? I haven't signed anything yet. Thanks for any advice you can offer.