All Forum Posts by: Jason V.

That all jives - it's just the part about him not even sending the appraisal to the buyer until after he receives the price adjustment addendum from me that I don't like the sound of. 

I'm at a point where it sucks, but my best option is to take the hit and keep moving forward. Not cutting off my nose to spite my face kind of deal. And if it turns out he's trying to pull something (although I'm not sure what, other than to get me to sign a price reduction on a deal that I'll walk away from if he's lying to me about the appraisal) I'll still find out about it after I send him the addendum, and eventually get the appraisal. 

It might not even be anything out of the ordinary - it's just the way he's handling it that's giving me a wonky feeling. 

 That's the plan, but supposedly the buyer won't get a copy until I send the mortgage broker the addendum (per the mortgage broker.) 

Quick background: I'm selling one of my SFRs, buyers are using a mortgage broker to get a USDA loan, which I believe is a 0% down. No RE agents involved. We agreed on the sale price, and 6% seller concessions. 

Now we're about 2 weeks out from the originally scheduled closing date, and the mortgage broker sent me an email saying the appraisal just came in, and we're going to have to lower the sale price by 6% (and still do 6% seller concessions) in order to proceed. 

I asked for a copy of the appraisal, and he said no. When I pressed him on it, he told me "The appraisal is good, they did 6 comps, and I know this appraiser - they are good." I'm still not buying it, and I know of at least a couple of sales in the area that had extenuating circumstances that lowered their sale prices 20-30%. 

He is also refusing to send a copy of the appraisal to the buyers (who I have a very good relationship with) until after he receives a signed addendum, updating the sale price. 

Does this make anyone else's Spidey Sense tingle? 

Due to a lot of other information I don't need to go into, I'm pretty much locked in on this sale - I'm just wondering if I'm getting played here, or if this is typical. 

Even if we do the addendum to lower the sale price, I'll eventually get my hands on a copy of the appraisal, so the broker can't be banking on me being an idiot...right? 

Good Morning BP

Is anyone using a live answering service that they love? I get enough phone calls it's a hassle to pick up the phone, but not enough to hire it out to someone else yet. 

Bonus points if it's a service that can also handle order taking/order placement. 

Thanks!

Argue about Cap rates all day long, but the metric still means exactly the same thing for SFRs as is it does for commercial MF. 

BUT: The primary driver of market price for an SFR has NOTHING to do with its Cap rate, whereas it has a lot to do with the market price for MF.

Yes, the argument could be made that there is a correlation between SFR value and Cap Rate, but no Husband, Wife, and 2.3 kids are driving around the neighborhood looking at houses for sale, and saying "Wow honey, doesn't that house have a great cap rate!?" Residential buyers just don't care, and they set the market price for SFRs.

@Brett Schickler I think we're all in agreement that your BRRRR numbers are correct (nice find on the property too) - how about sharing your rental assumptions as well?

What part of the city is the property in? SFRs selling for $120k at market price, and renting for $1300+ sounds pretty decent. 

I think it's pretty simple: as a couple of well known and frequent posters (and extremely successful investors) are fond of saying - BP is a site for beginners. When you start to look at the entire picture of investing in real estate (let alone the IRR v. MIRR argument) people say "it's too complicated, I can't do it" and walk away. Heck, if you even understand why IRR matters, you're probably in the top of the ranks here.

But there's nothing wrong with that! And the fact of it is, REI doesn't need to be complicated. Once you get over the initial hump, it's actually dead-simple, and you can make a lot of money in both the short and long runs using very simple strategies.

It's kind of like arguing over exercise, anyone who exercises without hurting themselves (probably not that difficult) is going to be much better off than someone who doesn't exercise. Only gym-rats like arguing about sets, reps, tapers, form, etc. 

What is it they always say? 90% of listeners to the BP podcast will never do anything? I'd wager it's more like 98% of BP forum visitors will also never actually do a deal.

I think what you're seeing is a return to the 2007 mentality: if I (as a wanna-be investor) don't get a deal RIGHT NOW, then I might never get one! Who cares if it's 35% over-valued? Appreciation will float it!

So I'm not buying much right now: I'm exiting my properties that have significant equity, and planning to hold that cash for when the correction comes, put it into rehabs of other properties, or invest in different businesses/industries with it. If a good deal came along, I'd jump on it, but the market is just pretty obnoxious right now. 

53 years old? It's practically new!

I live in a house that's a little over 100 years old, and that's relatively new for my area. My In-Laws' house is close to 200 years old, and older homes than that aren't unheard of around here, and are relatively common in the Northeast. 

That said, everyone around here knows the deal with older homes: what to look out for, what to worry about, and what is just par for the course. Just find a qualified home inspector (preferably a Profession Engineer) and listen to their recommendations, especially on anything structural or electrical. 

When it comes time to find contractors, look for guys who are old enough to have done the house when it was new :-) 

You've received a lot of good responses so far, but one thing I don't think I've seen mentioned is that the transactional cost per property can be much higher with commercial because appraisals, etc. all tend to cost a lot more in the commercial world.

You may also find a lack of interested lenders if you're looking at smaller dollar number properties. In my area, the commercial lenders don't want to screw around with what could be residential multi-family properties, because they can't make enough money on them.

Traditional mortgages will be your cheapest money - use it while you can.