All Forum Posts by: Steve Theobald

@Ammon Ellison. I am researching the Realtor.com issue. The Utah MLS's are very aggressive in protecting the privacy (sales prices) of the Realtors' clients, so my guess it the data freeze applies to Realtor.com as well.

Two years ago the National Association of Realtors appears to have passed a resolution requiring all MLS's to feed data to AVM providers but Utah objected. I don't know the final outcome yet...

Before someone comes to me for a CMA, I'd simply like to know that they have a good idea what the ARV and rehab will be - and that they still think it is a deal after factoring all their other costs. I enjoy doing CMAs, and as long as I am not taken advantage of, I am happy to help.

See my BP blog post

https://www.biggerpockets.com/blogs/8070/51492-why-is-zillow-so-far-off-in-utah-what-is-a-non-disclosure-state

Zillow is a great "first pass" data tool, but it is negatively impacted by Utah's status as a non-disclosure state. 

On the other hand, property owners benefit greatly by keeping sales data out of the hands of the taxation powers.  

Please read my post and share your own thoughts on the topic.

@Lisa S.  Congratulations for being "out-of-contract"  LOL.   It seems I often help talk more people out of deals than into them.  But that is okay; just as in other types of investing, in real estate "Return OF Investment" is way more important that "Return ON Investment," and I truly try to help people see the big picture and be wise.  Hurray, your methy problem is now a thing of the past.  Go celebrate for the deal you DIDN'T get!

@Lisa S.  Good work.

@Lisa S.   Many people misunderstand "As-Is."  It is a specific word for a specific real estate "starting point."  It simply means that the seller is not willing to make any repairs.  That's it.  

You still have your Due Diligence period in an As-Is deal, and as long as you make any price reduction requests within that time frame, then you are within your rights to (1) decide to move forward optimistically with the deal, (2) take a hike and get all your Earnest Money back, or (3) tell the hopeful sellers that you will walk if they don't drop the price into the realm of reality given the distressing discoveries of the inspection.    

Just don't pass the DDD  (due diligence deadline) before you make your move.   It is not cool to wait until the last 30 minutes of your deadline (if you can avoid it), but if you must, I am warning you not to forget to include the "Do or Die" clause:   "Either take my price reduction based on all of the following reasons, or else I am cancelling this stinking deal with this notice--as is my right to do.  Oh yeah, and give me all my earnest money back as the contract says."  (Of course, you don't have to be a stinker about it, but you get the idea.)   

-Steve

p.s.  Because the two units are next to each other and part of the same structure, you should be able to get a big discount on the meth cleanup.  Get several quotes!

@Lisa S.   I am an agent who works primarily with investors in Salt Lake.  Congratulations on being under contract.  I have had lots of deals with meth contamination and have helped with many rentals as well, so I feel qualified - though probably my advice will be discounted by others.  There are lots of opinions out there!

Every single old property will have issues.  Therefore, it's all about controlling risks and balancing this with the cash flow and quality of life for your tenants.

1.  Was the testing company a certified meth remediation company?  If not, then you can get someone to clean it for under $5k.  If it was a certified company, then the property will now (because of regulation) be on the county's "contaminated" list, and you will need to pay $7k to $10k to remediate.  

2.  Meth detection is amazingly precise, but the collection is not exact.  Therefore, if there is a borderline unit, I would be sure to clean that one too.  If you decide to sell later, the end buyer may do another test and it may actually be higher than 1.0 micrograms per 100 square centimeters.   But besides this, the health hazard is real.

3.  The old wiring may be fine.  But to be safe, it would be good to get it replaced.  Not knowing the extent of needed replacements, $5000 may be high or it may be low.  I have a guy who charges 50% as much as most licensed electricians.

4.  This foundation issue is outside my experience.

5.  I don't like the sewer line in water, although this is probably much more common than I am aware of.   The water table is clearly high.  Is there a sump pump?   Did the inspector think that the sewer line was needing to be replaced?  This issue needs more discussion.

So what should you do?  If you have professionals giving you legitimate bids, then you trust those numbers and discount the property by that exact number, showing the bids to the seller.  If they won't budge, then you walk.  Easy.

THERE WILL ALWAYS BE ANOTHER DEAL.   Don't throw good money after bad.  Just because you paid for an inspection doesn't mean you need to now buy the property!    

But before you give your final "price reduction request" double check all your numbers and make sure your Cash on Cash Return and your cap rate are real and acceptable, being sure to factor in vacancies, utilities paid by the owner, property management, taxes, maintenance, and the elusive "capital expenditure reserves" fund for when the roof or furnace, etc need to be replaced.

Let me know what you decide to do!

Steve Theobald

There is a new website called "Out-of-town Landlord" specifically designed for investors looking for properties out of their local markets.

I was privileged to be selected as the first Utah agent on the site.  

Check out my Utah page:    http://www.outoftownlandlord.com/salt-lake-city-in... 

Check out the whole site:  http://www.outoftownlandlord.com/

Welcome to BP @Cody Mortensen.  As an agent who works primarily with investors, I make dozens of offers a week.  And the good news is that I am finally starting to get more counter-offers now than I was 3 months ago.  This means that inventory is finally going up a bit and the number of buyers per property is slowing a bit - putting things back into a more natural balance.   So you shouldn't have to run around like an Olympian Banshee trying to find a deal!   Take your time and be patient.  Now is a great time to start shopping.  (I'd be happy to help in Utah, Salt Lake, Tooele, Davis, and Weber counties for single family and multi-family rentals.)

@Brady Lee  see my blog post with the latest sales graph.  https://www.biggerpockets.com/blogs/8070/51139-sea...

The last 6 months have been very hard for investors everywhere.  The market has been so strong that all the distressed sellers told themselves "I am not going to get suckered into Steve's lowball offer.  I will hold out for more, the market keeps rising and I know I can get what I want!"   

Couple this with all the new buyers entering the market creating multiple offers and you have a deadly investor mix UNLESS you do as @Jeff Rappaport suggests and find your own "off-market" deals. (BTW, my record is now seeing 46 offers on one property - It's nuts!!)

Welcome to BP.  This is a great place to learn.  Congratulations on your purchases!