All Forum Posts by: Tom V.

Interesting stories in May about Zillow going into the home buying business.  

https://www.geekwire.com/2018/inside-look-zillows-first-home-purchase-real-estate-media-giant-will-buy-sell-houses/

21 day close, easy for sellers, etc.  Hmm, could be a big impact on the market right?

The first home they company bought was 6630 S. Nash Way in Chandler Arizona for $410K on May 18, 2018.  (I wonder if their algorithms thought it was a good value?)  The home which is in lovely shape, was relisted for $425K just a week or so after the purchase.  

No dice.  

Price lowered to $418.5K on 6/14/2018

No dice.

Now asking $415K as of 7/19/2018

Yours for the taking.  That seems like a loss if the buyer's agent gets any kind of a commission. 

I guess this could be the new Uber for home buying, if consumers can get some big tech company to willingly absorb losses, they win all day.  

I would have loved to be in on the strategy meeting:

"Why aren't we flipping houses?  Have you seen the idiots on TV who do this?  It can't be that hard..." 

“If passed, do you think this could potentially encourage San Diego authorities to impose rent control regulations?”

Yes.

Buying your first property off of a web site with your IRA money sounds like a recipe for heartache. How well do you know the neighborhood? Why $7k of repairs? What happens when you realize the property manager is a clown? What about the fees you pay your IRA custodian. Is that in your spreadsheet? You can be certain the Roofstock does not give a rats rear about your one-off house purchase.

You should not go for this. You should find a rental you can drive to and buy it with your regular non IRA funds. Don't waste money you have put away over a long time on a first flyer in the landlord game.

FWIW yes I have an SDIRA and I am a landlord.  Roofstock is for people who want to convince themselves a house is the same as a mutual fund...  Good luck with that.

I find it helpful not to sweat the small stuff too much.  How would you feel if you hadn’t received funds from escrow yet and you were the seller?  No house and no money and no deed?

If a weekend of waiting will blow up your deal, maybe the margin is too tight to begin with.  Just wait it out.  Try to see the other side’s position.  Things will be okay.  Hang in there.

Hi @Scott Choppin - 

Nice of you to document your project.

I understand you don’t want to share price per square foot construction costs.

If you divide your annual pro forma NOI by your total project cost, what cap rate are you building and at what cap rate do you think the market value your project when it is stabilized.

Will you get 200bps of cap rate change?

Keep at it,

Tom

Ferry ridership has been growing 8-12% for the past 4-5 years.  Vallejo will get at least 3 new ferry boats as part of the Regional Measure 3 bridge toll increase.  

Service will improve in Vallejo as ridership increases.

Most of these people drive in and park, but there is no reason why Vallejo residents wouldn’t also participate.  

Vallejo schools are still poor and represent the biggest obstacle to the sort of young-family gentrification that would really move the needle in terms of quality of life.

You need property management software.  There are many dedicated offerings.  I use buildium.com.  It’s not cheap but it’s a good solution.  Many threads comparing options exist on BP.

Are you taking advantage of some nice old people who trust you?

Do you mean $250 more per month?  So, $250*12 = $3,000 per year?

$3,000 / $15,0000 = 20% per year.

If you can find another investment where you can get 20% ROI, you're better off than most professional investors.

If you can really bump rents that much, you're supposed to spend that money every time a unit becomes vacant.  

I did this recently with several of my apartments.  I like my tenants, they pay on time, but their rents were way under market. 

I think framing matters.  I posed it as: 

"First, I really appreciate having you as a tenant.  I want to offer you a new lease at a slightly higher rate.  

I think your house would rent on the open market for $925.  However, I value you as a tenant and I don't want to abruptly raise your rent so much.  I would like to offer you a new 12 month lease at $800 per month.  I encourage you to look around and compare other prices.  I think you will find I am still offering you a good deal. 

Please take a couple of weeks to think it over.  I would like your new lease to begin as of May 1st."

So, don't pressure/hard sell them.  

If your numbers are right, (they are paying under market rent) most tenants will figure it out and agree to your new price.   As others have said, from here on out, try to do little rent bumps each year.

Hope this helps.