All Forum Posts by: Steve Milford

I would say leave it alone, and get a HELOC if really needed. Nobody foresees that we are going back to 3.5% mortgages, so keep it, you can't get cheaper cash. If anything push for rent higher than $2,600 to get max cash flow. It sounds like you are local, so you can handle the issues come up. Screening future tenants is #1. Forget PM, they are just a middle-man sucking money away, until you have more rentals. Read the tenant landlord code in your area, know the rules. They spell out what you can and cannot do. Have a good contract, and keep good records so if you have to goto court or evict you can. Use an online platform to collect rent. Plus now is a horrible time to sell. You can always sell later.

My father had same scenario a few months ago. Everyone he talked with suggested he sell, refi. I suggested he do nothing and rent. He first wanted to sell, then got turned on by easy rent, wanted rent of $1,400 per month and thought it was "fair". I told him, forget "fair", be aggressive. It took a little bit of convincing him but we got it rented for $1,800 per month. Easy cash flow is the best thing in the world. Once it gets going, you/he might find it takes very little time at all. I check in with my tenant every 3 months asking about maintenance issues and annually when we have the "raise the rent" conversation and when I hire a home inspector to do an inspection. All communication by text or email as much as possible.

Hey Victor, the details are in the contract and the contingencies, "if <>, then <>". If you have a Realtor / attorney they can help interpret paperwork. If don't have those, then clarify with Seller, or find new funding, which of course as you are finding might be hard to come by. All hard money lenders I talk with want skin in the game on the part of the investor, so no gap finding. I'd say really look at the deal because if primary lending bailed, then it might not be such a "good deal". But you might have convinced yourself it is. Losing earnest money sucks, but would it be worse to spend more and not be able to flip it? I don't accept anyone's opinion of rehab costs for ARV, as the market just isn't there like that right now with houses sitting 2x as long and labor rates through the roof. I suspect you will never make this mistake again. Give me a call if you need some help.

@Brenda Garcia

Check your state regs. Dual-agency in WA actually means no representation, just facilitation.

I'd say get more bids. Some Buyers will find a nice expensive contractor and bid to encourage dropping price. I have represented many Sellers where Buyers do that. I've seen bids for rotten sub-floor work 10x actual cost and others. The craziest I have seen is a bid for foundation work 20x actual cost to get job done. I've had Buyer's agents tell me, "if you go back onto market, then you have to tell people what we found", thinking this is a ploy to get me to convince Seller to drop price. It's the Seller's choices. It's so funny because each Buyer has different pain points. I've seen where one Buyer will have a problem with a roof and then want to terminate. Another will look at the same inspection report (previous Buyer's report) and say roof looks fine. Recently I was helping a Seller sell their property AS-IS. Buyer asks for repairs. I ask the agent, "so your Buyer put it in writing that they are buying AS-IS, what's up with the repair requests? Does that mean your Buyer was lying?" Agent responds with, "Everyone in my office does this." So I respond back with, lol, "So you are telling me everyone in your office lies?" Agent seriously tried to back-pedal that one. Seller stuck to their guns and yes it sold to THAT Buyer.

There are 2 scenarios here. Don't listen to others who say yes no, because everyone considers from their perception.

1) Are you going to kick yourself later if you don't end up giving it a shot?

2) Does it pencil out? Change your housing value to pre-tax since you would have to pay elsewhere. Considering 25% tax bracket, the sum of this + salary = $73,200. So the spread is $26,800. So with daycare you will wipe that out. And then reduce it further $56,400 for housing.  After year one, you get some of that housing cost back in equity. But in year two and beyond, full housing cost. I've known people go work high-tech in SV. Most end up doubling / tripling up in one-bedrooms just for work housing, their families are elsewhere, and they go home every two weeks +/-. These companies usually are excellent on the resume, but many people don't stay long. Up to you. 

As a single Dad, I could never have taken that chance as my support is where I am at. It just is. If I didn't have a kid, easy choice, I'd go for it. But with a kid it's different because me working a ton doesn't help my kid live a better life.

On my properties I install French drains to lowest point of property. I have also seen where one-way valves are installed under houses in the crawlspace foundation wall. All the cheap solutions usually don't work long-term. Watch the water and then fix the flow.

I would suggest puting your 401k into a rollover IRA. It is pretax dollars and you want to keep it that way. Then you can invest it into stocks/efts of your choice. Or you could put into a self-directed IRA and invest in real estate. Either way, you have to keep investment dollars and returns in same type to protect from taxes. If the money hits your bank account, it is taxed like income and you might have to pay a penalty as well since it is no longer considered pre-tax.

I think the rule should be "look at 100, decide on 1". They're is no magic formula, it is just continuously sifting sifting sifting, every property is a little different. I see a lot of investors "hoping" the numbers work, but you need to evaluate enough until your gut says go. No different than other types of investments, like stocks. Just remember, that sometimes you have to take a chance to win, and just win more often than you lose. That's where you beat analysis paralysis. Wherever you consider, be sure to look at rental code of city. Yes Portland's relocation sucks for landlords. We all want winners, but with a little skin in the game is where we learn fastest. I learn by hard knocks.

If the contract doesn't spell out the usage, it is now a learning experience. Check with your local tenant law and code enforcement regarding yards. In my contracts it states that if there is a code violation, then I as landlord can remedy and can bill the tenant for the cost of any fine and remediation costs. If she is taking over two spaces, it seems to me that she wants to pay for the rental of that one too.

When I am looking for a new contractor, I call all I can in the book, and call other real estate agents and insurance agents if they know of anyone. I have found that those that need the work call back, and then I ask for referrals of customers. It is absolutely amazing to me how many contractors don't call back even a day later. But hey, by their actions they are letting me know that they don't need my business.

It is actually very simple. The agent passes the message onto another party and is a participant in the conversation, advising that client. That is our fiduciary responsibility. When the agent stops doing that, then they are no longer acting in the best of the client = goodbye. You want to come here and offer 8% below list, I will let you do that all day long lol. Most listings here sell 10%-15% below list.