All Forum Posts by: Tom A.

At the risk of alienating some agents out there, I don't know of a residential real estate agent certification that I find valuable as an investor. The bar is set so low to become an agent, and for the certifications, that they do little to establish credibility or expertise. One can be an excellent agent without the certifications, or a poor agent with a business card full of acronyms.

Aside from the normal qualities desired in any professional -- good communication, reliability, diligence, initiative, responsiveness -- a good investors' agent needs to have a level of expertise that's hard to get in a classroom. In fact, the reason I got my license is because of the difficulty I had as an investor in finding a good investors' agent. I essentially became my own agent.

I work with some friends/investors as their agent and they've told me they appreciate the fact that I think like an investor -- because I am an investor.

I guess this is a long way of telling you to consider becoming an investor yourself. The knowledge and credibility you gain will be very helpful in obtaining investor clients.

I did a little googling to find some data to back up my sense that Halifax and much of Canada is in a real estate bubble.

All the images are from http://theeconomicanalyst.com/.

Note how out-of-whack Canada's Price/Rent ratio is compared to other countries. Not sure what year they used as their =100 baseline, but the takeaway for me is the country to country comparison.

Here Canadian Teranet data (similar to the US Case-Shiller index using matched-pair sales of single family homes) shows house prices have risen at a much faster rate than Canadian per-capita GDP, per-capita income, rents, or inflation. Looks frothy to me.

Same chart but for the Halifax real estate market. Halifax may not be as bad as Vancouver but there's certainly some carbonation in Halifax.

Halifax incomes haven't kept pace with home prices.

While these are all based on single family homes, it can't be much different for small apartment buildings based on your description, Nick.

So if it were me, I'd sell. There are a number of markets in the US that have already corrected. Some in my opinion have over-corrected. If you're familiar with the 2% rule (monthly rent >= 2% of asset value) you'll know that you aren't getting that now. You can get that in many parts of the US. For example, you can buy houses all day long in the metro-Detroit market that will meet or exceed that hurdle rate. Purchase + rehab = $50K and rent is $1000+/month. Not war zones, but nice low-to-moderate income suburbs. 3 bedroom 1.5 bath brick ranches and bungalows. Or you could do flips or do private lending to investors, but I'd be wary about doing it in Canada given the high valuations. Too many investors got caught with flips or loan collateral that rapidly decreased in value during our RE crash.

Sell, sell, sell.

Thanks for closing the loop Ryan. Did the bank take your $64K counter?

First take $1K and:

- Join your local REIA, attend regularly and talk to the people there (~$150 - $200/year)
- Take some friendly local investors out to lunch/dinner/drinks ($50 per "date")
- Buy some good RE investing books ($5 - $20 each, used or new)
- Pick up a few well-regarded guru courses used on Ebay ($100 - $200 each)

That will give you big head start without having to throw $25K at something that may or may not be what you're looking for.

It would be nice if there were a bright line on this. There's not.

In a "normal" IRA you can spend hours, days, months researching stocks and mutual funds and making trades. That's allowed.

"Increasing the value" on real estate is a tough one. On the one hand, it doesn't increase the value of the property. On the other hand, if you didn't mow it yourself you'd have to pay out of the SDIRA to have it done, resulting in a decrease in the value of the IRA. Or you could require the tenant to mow, possibly lowering the rental income stream if you have to knock a few buck off the monthly rent as an inducement.

Is this the same as if you hired an investment advisorr to monitor your IRA stock and mutual fund investments and make periodic tweaks? I don't know. A little more clarity would be helpful on the SDIRA front.

I don't know about being required to accept cash. Maybe it would play out as you describe in front of a judge, but I just had a half-serious conversation about the feasibility of paying "cash" (greenbacks, not a wire or cashier's check) for a house and the title company said they will never accept cash. They said it was their prerogative to set acceptable terms of payment.

I know landlords with properties in bad areas that require their non-banked tenants to pay with money orders. The landlord collects the rent in person and the last thing you want is to be on a regular monthly schedule, in the ghetto, with $10K cash in your pocket.

It looks really good. I wouldn't say there's anything in the rehab or staging that falls short.

If you're looking to tweak it, I have a few suggestions but I don't think they'll make a significant difference. Anyway, add some colorful plants/flowers in the landscaping bed by the front of the house. As Jon said, lose the mirror in the bedroom. Move the twin bed away from the wall/window. Move the bed in the master to where the mirror is, assuming the photo is taken from the doorway.

In the description, if it has granite in the kitchen make sure that's prominently stated. Are the cabs maple, or some wood/finish that will be a plus if mentioned?

Those are all really minor points, if you don't get showings I wouldn't blame the staging or decor. Is the pricing where it needs to be?

In a normal real estate transaction, price and terms are negotiated and a seller may opt to accept less favorable terms in exchange for a higher sales price. In a short sale, since price really doesn't matter to the seller they can focus on terms. No reason to accept non-binding terms unless those are the only terms they can get. Even then, the seller could offer to knock $5K off the sales price if the buyer agrees to put an EMD down, perform inspections up front and wait 90 - 120 days.

Do the sellers ever have an issue with the terms? Around here there's been a trend to requiring EMD and inspections upon seller acceptance, in return for a binding contract.

The largest short sale brokerage in Metro Detroit gives buyers two options:

1) EMD and inspections upon seller acceptance, buyer can exit in 120 days if deal hasn't closed, seller is committed to that buyer as well.

2) EMD and inspections upon bank acceptance, buyer can walk at any time but seller is free to sign a binding contract with another buyer at any time as well.

While I'm sure you'd perform and complete the purchase, a lot of buyers (retail) would walk if they saw a house they liked better and had no EMD or inspection skin in the game, leaving the seller in the lurch.