All Forum Posts by: Steve Milford

Here is what you ask your agent, "Are you open to writing offers at a price I want, or do I find another agent that will?"

Now, most agents don't want to write and write and write fantasy offers. That's a waste of time.

But what sounds like a bigger issue, is that your agent might not like conflict. Offering list price and agreeing to everything seller wants tells me that your agent doesn't like the negotiation phase. That's the most fun for me, getting the "win" for the client, aside from presenting keys. Either get your agent to embrace your offer type or dump him. If he doesn't like your offers, he should just be straight up and tell you he doesn't like your style, and maybe help you go find someone else. Then at least he can get a referral from it too. Versus you just walking off. I've done it, not a big deal.

As a renter I personally didn't like them. When I had a lease, I always thought, "Do I want to commit to living here for another year?" The answer was usually no, so I left. Now, as a landlord. I don't push the lease, because I found that most tenants stay longer, because they CAN leave at any time, but rarely do. Something comes up, all the time lol.

@Nick Littleton

It's always price versus like-kind. Same with selling. As others have mentioned, look at like-kind for comparison. Garage vs no garage. Newer inside versus dated. Bright inside versus dark. I look on Craigslist and Rent.com for comparisons, and goto open houses. If everyone offering discounted 1st month's you need to do that as well imo. At the end of the day, like you said, your lender is just going to care about consistently collected rent. I like to improve to market of materials used, but limit amenities as much as possible to keep rent lower to tenant. If they want super duper cable, they can buy it. The flipper and builders in my town paint all the walls light gray, white trim, use a grayish vinyl planking through most of the house, install white cabs, ss appliances, have nicer countertops, and use brushed nickel or bronze a lot. There is no secret, its a rinse and repeat scenario. Play the role of renter, or have a friend do it and let them know why they would or would not choose you.

I do it similarly like Suzanne. Not that hard. Read and follow the area tenent code (look it up) for Oregon, county, and city, use a platform to collect rent, communicate in writing, and run it like a business (yes, emotionless is hard sometimes). You can do it. Hire the PM when you don't have the time and have many units.

@Beau Wollens

If you lived there, what would you fix first? I would fix major systems, and anything to do with water, since neglect there does a lot more damage. Of course, all based on budget. And just like with any house, maintenance is usually cheaper than rehab. If future rent is a concern, you might fix cosmetic fast too.

Save yourself the hassle of evaluating any property before you seek your money. Go to a lender and find out what the maximum is for which you qualify. They will tell you the "rules" of 75% LTV or other etc. Personally, I use a tweaked DSCR ratio that I am comfortable with; it differs from the one you have because my eval is different. I am pretty conservative. Also, I don't really "get into" the weeds based on property value, as I want each property to cash flow more than anything. Appreciation is a given unless the trend is declining in the area.

So considering what I see here. Purchase price of $85,000; 15% down. Bankrate calc @ 6.39% = $598 per mo (PITI+PMI), so $598 * DSCR of 1.25 = $747.50 would be the minimum rent I need to charge for everything to work out and "get by" to cover the debt and have a couple of bucks for vacancy and cap ex. Average weekly wages, https://www.bls.gov/regions/so..., would be 3x rent or more, so that is helpful. Personally, I like a DSCR of say 1.5. That would be a rent of $897. Since you are inheriting a tenant above that rent already, then it would seemingly be a good buy, if the actual financials show that this was the amount actually collected for rent all year. The cost to get into the property would probably be higher closing costs than you have here as it is based on credit, PMI prepaid rate, hidden loan fees, origination, rate paydown fees, etc. The next questions would be, is that rent sustainable for the neighborhood? Also, does it need any repair now? And do you have reserves to cover, if the tenant stops paying?

Treat each party as an individual application. Me? I would probably let the inherited tenants out of the lease if raising the rent was possible to closer to market conditions. Would I rent to the kids? Probably not. I am less concerned about credit score versus collections (aka stiffing other people). Rent will likely be their biggest bill and one of the first to go delinquent when times are tough.

Once you get approved for a loan, then see what you can buy on or off the market, then compare with what like-kind rents are on Craigslist or other platforms. Then you will know if it cashflows.

@John Walston

Make it easy on yourself. Ask the seller, when they are willing to be out, how much they would settle for, and the preferred terms of the deal. Then write ss

Omething as a win-win for both.

When I write an "offer" it IS the purchase and sale agreement. What you put in it is from the conversation. You want an agreement and signature to lock it up. Otherwise someone else might grab it from you. If I had a nickel every time a buyer or seller tells me what they would do lol, you know how that goes!

@Tommesa Mobley

Every property is perfect if we only had the money for it. My 2 cents, find the money first, then shop.