All Forum Posts by: Tom V.

http://www.contracostatimes.com/richmond/ci_285208...

I am sure I am not the only reader to pick up this article.  City of Richmond, California enacts a rent control ordinance.   I am not clear on if and how it applies to new construction, but I presume it applies to existing housing. 

Pretty frustrating when the local government can come along and decide to cap the amounts that you can raise your rents and keep you from having your rents keep pace with the market.  

Congratulations!   House looks great.   Nice modern feeling and open floorplan.  

Nice job thinning out that beautiful oak at the main entrance.  Yields much better marketing photos.  Great tree for the next owner.  

Horizontal railing balusters are a great call.  Not hugely expensive, but totally changes the feel of the exterior deck.  

I'm still waiting for a project to use those big panoramic doors.  Beautiful.  

I can feel the dry sunshine hitting that lawn.  Hopefully we'll get some el Nino rain this winter to relax the California water concerns.  It's tough to beat an emerald lawn.  

I am equally impressed by the short turn-around.   Great work.  

@Will Barnard

@Jamal L.

Jamal - 

I'm not sure exactly what everyone here is so enthusiastic about.  You did this wholesale deal with a seller who by your own admission was 74 years old and 'desperate for money.'  You took a 20% spread out of the guy, and now you feel like you have 'checkmated' someone.   You checkmated the old guy with no money?  You brokered a real estate deal without a real estate license (unless I misunderstood that you have a license).  This isn't a business, this is opportunistic treatment of old people in need.  

I've made snarky posts before about people doing wholesale trades like this, and I could go look up the Maryland Real Estate regulators and quote you chapter and verse about how you are breaking the law.  I've been reprimanded by the guys who run the site, so I'll avoid that here.  I would just say, what you have described is not a real business and I know that I wouldn't want to squeeze $6K out of an elderly couple whose principal asset was worth $30k.  You gave him a ride to see his own house?  Wow - big deal.  That's the sort of common courtesy that a real estate agent offers as a matter of course.  

If you want to sell real estate, get your license and sell real estate.  "Helping old people" in this way is not to be celebrated in my opinion.   I would be ashamed to have done this deal the way you describe.  Good luck and remember the golden rule to treat others the way you want to be treated.  

@Jamal L.

Thanks Jamal - I will have to check out the market place post.  

Did you consider listing the house for sale on your local multiple listing service?  I see fixer properties listed all the time that will not qualify for bank loans.  

Would that have yielded a higher price for everyone?  

Sounds interesting!  I love to learn about wholesale stories like yours.  Can you share the numbers?   What did your investor pay and what did the seller receive?   Where was the house located?  What address?

@Jamal L.

@David Smith

  If you are trying to buy in a prime market with appreciating values and rents, you can't do that with 50K.  Most rental properties will trade at very low cap rates (3-4%) and then if you get financing at 4%, you don't have any spread over expenses to cash flow or even pay your operating income.  

Do people buy $1.8mm duplexes selling at 3.5% cap rates?  They do.  They know rents will go up and appreciation has helped values go up.  They may even borrow money.  But they might only borrow 40% of the purchase price, or 50% of the purchase price.  It's all the lenders will allow. 

So what do you do if you have $50K?  You look at outer markets.  You build your capital base.  You find someone you REALLY trust to invest with.  But there are no magic bullets in a land of low cap rates that will let someone with a comparatively low capital base start.   There is no magic trick that special people.  Except VALLEJO...  That's partly a joke, but it's as close to Detroit cap rates as you will find in the SF Bay Area.  

I am a fan of Vallejo as an up and cpming city in the SF bay.  Still lots of houses for less than 300k.   Try to buy near the ferry and downtown.

Looks great.  Congratulations!

I would think about what will happen when your tenant's kid's friend falls of the replacement trampoline and breaks her arm on your property.  

I would use this as an opportunity to say, "I have discussed this issue with my insurance agent and unfortunately we will not be able to allow you to have a trampoline in the future." 

Forget about replacing the trampoline, this is a big liability risk for you.  

I have had some plumbers quote high prices for work inside units that are tenant occupied.   If you have time you should try to get another quote.  If you had a larger property management company, they might have someone on staff to do this work.   Good luck.