All Forum Posts by: Ryan D.

@Shaidah K. It sounds like foreign buyers are having a toxic effect on your market, & corroding the ability of those tied to the local economy to purchase homes. I know there was a foreign buyer tax implemented last year, though from what I I've read it hasn't had much of an impact. Are there any other measures that are being taken to confront this issue?

Its a shame the Vancouver has become so destabilized, I've visited several times over the last 10-15 years and it always strikes me as a wonderful place for people live. 

@Charlie MacPherson My comments weren't meant to be taken as a slur to the profession (nor to you directly), so I'm sorry if that was how it came across. Though you, and many other, agents may act to a high standard of morality, its been my direct experience that the industry has more than its fair share of actors who are far less ethical, and interested only in closing a deal. I'll wager you have come across these folks and seen this in play.  

RE is an open bidding process, we all understand this, and getting people to up their offer is clearly part of the job of a good sellers agent. My comments were a statement that the market (and all its many gears) is driving people to make bad/questionable decisions - I don't think there is anyone who will claim that a home buyer purchasing a house without an inspection, is a "good" or responsible decision. Is it the buyers agents job to encourage this? Perhaps. Is it the sellers agents job to strongly discourage this, I would hope so. 

But again, what else does one do when the next buyer in line is willing to make these decisions to win the game?

"What would you do if your home quadrupled in value" in just 13 years?!?! My god, I would wonder what the heck has happened to have caused such an unhealthy market!!! I cant imagine that local incomes have quadrupled in that time frame! Vancouver-metro looks like a crazy bubble, you may want to consider that selling now means getting out at (or near) the top of an unsustainable appreciation bubble. 

@Charlie MacPherson your post about orchestration of a bidding war got me thinking. This type of activity leads buyers to do foolish & irresponsible things, such as waiving home inspections, etc. Of course its not the sellers responsibility to make sure buyers act rationally....that being said, does it not seem somewhat...unscrupulous...to encourage this type of behavior from people looking for a home? 

I'm not talking about investors (who are running a business & are aware of, or should be, the risks involved), but for the average person buying a home for their family, there is no way they are going to know there is termite damage, or wood rot, or mold, etc., hiding behind the fresh coat of paint...or water damage, or faulty & dangerous electrical work, or disastrous plumbing, etc...there is no way they are going to know any of this with out the benefit of a professional inspection, and agents (BOTH buyers & sellers agents) actively encouraging this type of behavior, seems unethical. To me this smacks of the used care salesman whipping buyers into a frenzy and convincing them to buy the car without ever looking under the hood or taking it for a test drive.

Naturally, even an good agent cant MAKE a buyer retain an inspection clause, particularly when the next buyer behind him is willing to waive it.....though if everyone was jumping off a bridge. How do responsible people compete in a market when your competition is willing to do such reckless things to win? 

I don't intend this to be a personal critique on any one agent, its more of an observation on the industry in general, and the things people do in markets (particularly strong sellers markets). 

@Charlie MacPherson - I appreciate your insights Charlie, as you mention there are undoubtedly state-to-state differences. I've been in the Ca, Ma, and FL markets, and have regularly experienced the "best & final / highest & best" sales push in all three (is odd NOT to see it here in Ca) - I've seen agents directly state this on day 1 of an open house, & I've seen it advertised in on-line RE postings as well, etc. Does the using of the words "best & final" carry some legal significance in Ma?

There is a distinction to be made here: A sellers agent claiming there are multiple offers, and asking for your "best & final", are two different things. 

Falsely claiming there are multiple offers on a property carries some consequences, as you point out. Asking for "best & final / highest & best"  causes buyers to think there are or will be multiple offers, but the statement itself is not making any claims. 

Again, please educate me if the term carries any legal significance in your markets, as I am genuinely curious.

Here's one I pulled from Trulia just now, been on the market for 3 days. Stated right in the advertisement "Sellers are looking for highest and best offers". Well, no kidding. Show me the sellers who are looking for the "lowest & worst offers"! It's just marketing, intended to whip buyers into a frenzy by making them believe there are/will be multiple offers (without actually claiming there are). 

"Best & Final" are just empty buzz words designed to get buyers into a frenzy, nothing more. Nothing is "Best & Final" until a sales agreement is signed. 

At $650/unit/month for rent, this property does not meet the 1% "rule" (gross monthly rents should be at least 1% of the purchase price), and is not a good cash-flow investment. 

That being said, numbers you need to acquire to analyse your deal BEFORE you purchase: 

1. rents
2. taxes
3. leases, & if the tenants are current & meet YOUR criteria for tenants.
4. cost of insurance
5. cost of lawn/grounds care
6. utilities (for what is the owner responsible)
7. cost of management (or will you self manage, in which case factor in the value of your own time)
8. rent-control or not?
9. any other cities fees/taxes/etc for which the property owner is responsible to pay

@Account Closed - i think highlighting failures is an excellent idea, with its place & time.

Success stories are for inspiration - Failure stories are for education. Everyone needs a bit of both from time to time. I actually prefer the failure stories, b/c I can learn more from them and I can make my own business better by learning from the mistakes of others. 

As for bad contractors - yes, there are LOTS AND LOTS of bad contractors out there. Unfortunately, odds are near 100% that every investor will run through their fair share. BUT over time, you will figure out the good & honest ones (there are plenty of them out there), and you will do your best to work with them only. Like anything else, it takes time.

1. Ignore all the crap on HGTV and the guru's - they make their money selling you ENTERTAINMENT, not education. En net, all these things have done more to hurt housing markets than they have done to help.
2. Yes, most investors loose money. RE "investing" is running a small business, its not "investing" in the sense that buying stocks is investing. Owning rentals, or running a fix&flix operation, is a BUSINESS, and running a successful small business takes lots of hard work. You are not throwing money at an S&P500 index fund and then putting your feet up.  Once one comes to appreciate this, perspectives will change.
3. 9 out of 10 small businesses will fail within the first 5 years. RE business is little different. It takes a lot of hard work, late nights, and proper analysis of income & expenses. Most folks who get into RE don't want any of these three things, which is why they fail at it. Thinking one can just by a house & be on your way to wealthy with little/no work is for lottery advertisements. Simply put, most people do not have what it takes to run a small business successfully.
4. Long term success comes from lots of little wins all added up over time. You are not going to start a RE business today & retire in 3 years. Sorry, but anyone who tells you otherwise is selling something.