All Forum Posts by: Scott Pigman

@Jim Sokoloff @Matt Morgan  Here's my thinking, if I have two properties that I made the same investment into and I'm getting the same return then I might think they're performing identically since they have the same ROI. But if one property has twice the equity, and hence 1/2 of the ROE, then that should be an indication I should consider selling or refinancing that property so I can free that capital up to invest in more properties.

This is an interesting discussion, but is ROI the right calculation to use for evaluating an investment property after the first year or so that you own it? I would think that that Return On Equity would be the right calculation to use to compare performance and that it would account for changes in the property's value and how much you've leveraged it.

 All things being equal, why not?

For the sake of argument say that the rents are all $500. If you live in the duplex and rent half out out you're collecting $500/month. If you rent out both side of the duplex and rent an apartment you're collecting $1000 and paying $500. You're still up $500 and you get to live where YOU want to live. Plus you can depreciate the whole duplex, not just half.

Disclaimer - I'm just starting out myself.

@Richard C. I never meant to imply I thought anyone was being unkind.

Now I know that it ain't an auction.

I feel like Grandpa Simpson yelling at a cloud. 

Oh, and by the way. This particular house was listed on Saturday. So I'm not buying (Ha! no kidding!) that they didn't have any more time and had to "move ahead" already.

Fine, fine, no one agrees with me. NOT the first time it's happened, sad to say.

But yes, @Wayne Brooks & @Richard C. I DO DID expect it to be run like an auction. What kind of auction would it be if the auctioneer only took one bid? It takes, what, 30 seconds to send a text message, "Your buyer's offer isn't the best." Sure I can see a limit to how many rounds you'd let it go for, but just one? Really?  (yes, yes, I know the answer to that question now).

I get that that there's more to an offer than price, and if we knew our offer was deficient we would have worked on other areas as well. But price is a useful simplification for the purposes of discussion

Sorry, @Gregory Tran , I still am hung up on the realtor actually taking a buyer at their word that their offer really is the highest they're willing to go, especially if they let the buyer know they're going to lose the property otherwise.

Look at it another way. There are all these people on BP who wholesale houses. Now when they go talk to a homeowner and ask, "what's the lowest you can take for your house?" Do they really accept the owners word that they can't go any lower than that if the numbers don't work? Or do they make an offer that does work and see if the owner has more room to negotiate than they let on? 

So today I got a lesson in how realtors work in Texas, or at least in the Austin market. I was more than a little surprised at how they do things and I'm trying to figure out if it's because of some silly regulation, some silly local custom, or if there really is an explanation out there that actually does make sense. 

First, some background on my previous experience with a realtor here in Maryland. When we put our house up for sale we received two offers on the same day. My realtor contacted the buyer with the lessor offer and let them know their offer was low so they had a chance to raise it. He never told them what the other offer was exactly, just that it was higher. To me that seems like the selling agents duty; to try to get the most they can out of the buyer while not being deceitful.

This weekend we signed an offer on a house we were looking at to the north of Austin. The asking price was acceptable and we were willing to pay it, but just the same we figured we'd see if they wouldn't take a lower offer. Doesn't hurt to ask for a discount, does it? Or so we thought.

Sunday our realtor told us that their was another offer on the property and that their realtor was telling us to accept our "best and highest" offer. I heard that and thought, sure, of course he's going to say to submit our best and highest offer, but certainly if we're low they'll come back to us to see if we are willing to go higher.

Well, today we found out that they're selling to the other buyer. No counter offer, no notice that our offer wasn't as good.

My realtor tried to explain this practice to me. I tried to explain why I didn't understand it. I'm not sure that either of us really understood the other. A couple of times it almost sounded like she was trying to tell me that "submit your highest and best" is a de facto code for "YOU aren't the highest and best", but then she'd say no, the may say that to the other seller too.

Anyways, it ain't like they're going to change their procedures on my account, but I'd like to at least understand it better.

@Account Closed That's an option too, within limits. We're not up for a complete rehab but carpets/paint/general repairs could be doable. 

We nearly made an offer on a pre-foreclosure that needs some work, but it looks like by the time we fixed it up we'd be into it for about what we could buy a move-in ready house.

Unless something comes up really soon we'd have to rent for awhile while we search for one of those deals. Which I'm reluctant to do, perhaps foolishly.