All Forum Posts by: Tom ONeil

Hard to say without knowing what the property is, but it couldn't hurt.  It might not necessarily be the walls, but the attic or basement or crawl space as well.  If you have access to a thermal camera you may be able to see from the inside where cold spots are and figure out a way to combat them.

Windows are a big area of heat loss too, if they are old that might be the biggest problem.

For me, if the cash flow is breaking even, I would hold onto it. Regardless of what your paper ROI is, in this scenario if you sell now I would imagine you would take a net loss due to all your selling expenses.

The other way to look at it, see what you would net from your sale and analyze putting that amount into an index fund for five years or so.  See where you think this property will be if you sell in that same five years from now.  

Just my 2 cents.

@Account Closed My understanding from a recent conversation with a lender is that USDA also has 100% loan options now.  Those are usually only available in more rural areas, only certain properties will qualify.

@Shane Gaboury Part of your decision in 2-3 years needs to be what you are holding the condo for.  Are you holding it as an investment for cash flow (looks like there wont be much at that point) or are you holding it for appreciation?  Personally, I look for sustainable cash flow first and consider property appreciation as a bonus, but I do know in certain markets that investors will hold for appreciation, which is a bit risky for me.  

@Kendrick Rutherford Have you discussed this with a lender?  If you are moving into a new home and the one you are renting is no longer your primary residence, cash out refinancing on an investment property carries much higher rates in my experience.  

Other things to weigh in this decision are if you are using the equity you take out to buy properties that will net $500 per month is what are your additional payments on the other mortgage?  Hopefully less than $500 per month.

Having more properties that provide the same level of income has some pros and cons.  Pros would be more stability from vacancy (one property being vacant will not eliminate all or most of your income) and increased equity over time as mortgage balances decline.  Cons, more tenants = more headaches, more maintenance, etc.

@Brendan OConnor My hope is that if there is another correction similar to what we saw, the results will be a bit different.  Lending has loosened up recently but I don't think it is anywhere near where it was back in 2006-2008, so my hope is that people are better positioned in their homes to ride out the downturn rather than be upside down on their mortgages and just walk away.  

I guess my question is, what do people think would drive a market correction?  A couple factors I can think of right now would be:

1) Increased inventory - new homes are being built like crazy all around the area.  We are still in an inventory shortage situation which is driving up prices.  If inventory picks up, prices should go down.

2) Increased interest rates - as rates increase, an equal monthly payment will result in a lower financed value for a house.  This will decrease the dollar amount people can receive financing for.

3) Business growth/Political climate - Have we seen the last of the fallout from HB2 or is there more to come?  

Personally, I feel confident that I am positioned to make it to the other side.  My investments are currently in buy and hold rentals, which have untapped equity and good cash flow.  A 30-40% decrease in current rent prices would be sustainable for me.

@Jason Branch Zillow usually has houses for the last two years in their "recently sold" category. If you don't have MLS access or an agent who you can go to for those questions, i recommend Realtor .com for that info. Their recently sold houses are typically in the last 6 months and more accurate, at least in my area.

@Hannah Wilkinson Not sure if anyone touched on this yet, I skimmed above but aside from what everyone else said about the benefits of working with a buyer's agent, there are also pitfalls to working with the seller's agent without representation of your own.

There are different levels of representation and different levels of service that can be provided based on those.  

Long story short, a buyer's agent always has your best interest in mind.  They can provide you advice and help you negotiate.

Working with a dual agent, where you sign an agency agreement with the seller's agent, that agent will only be able to provide you with material facts about the property and pass communication between you and the seller.  They cannot help you negotiate or advise on how to structure your offer or what things to ask for (maybe include appliances, etc.)

Working with the seller's agent as a Customer (as opposed to a Client in the two scenarios above), you are not represented.  Any information you share with the seller's agent about your motivation, negotiating position, etc, that agent has the duty to pass that along to their client, the seller.  

The difference between a Client and a Customer is very important and one of the most misunderstood concepts.

@Cedric Braggs I would definitely let another agent hold the open house on your listings.  They would do it for free and get to keep the leads.  Getting leads is basically the reason for holding an open house in the first place.  A proper open house has a lot of prep work, follow up, etc. so that agent worked for those leads.  Plus, if they turn them over to you, wouldn't it seem weird for you to contact those people and say, "You went to an open house and met some other agent but now you get to talk to me."?  I would think so.

If you hold your own listing open you may run into a tough spot if someone wants that property but will not agree to a dual agency situation.  If you would like the leads from the open house I would suggest asking another agent in your office if you can hold one of their listings open.

I would choose an agent who you trust.

@Andrew Postell was right on with the introductions to the neighbors.  You can even ask them to tell you some great things about the neighborhood that you can tell the visitors and invite them over to take a look.  Neighbors are usually nosey.

@William Rose I don't think there is anything fundamentally wrong with your strategy here but it may be an issue of how you approach and work with these potential buyers.  The key for me would be to developing a relationship with them that extends beyond follow up with text messages.  Perhaps meet with them for coffee or lunch to learn about their individual strategies, specifics of what they are looking for, and build up a general rapport with them.

As @Matt Lefebvre said, you have to add something of value above and beyond what others are doing for them.  As cash buyers they may already have other wholesalers who they work with that provide the same basic information.  They may already have other agents.  One of the keys is to find this out up front prior to showing.  Do you have agency agreements in place with these people?  

As far as finding and marketing off market properties (I don't think you were saying this other than auction properties), there are some ethical issues with doing this as a realtor.  Realtors are held to a higher standard than the general public and our duty is to look out for our client's best interest.  If you are trying to do a "traditional" wholesale method where you lock up a property and then assign it to someone else, taking either an assignment fee or the difference between the two contract prices, your local Realtors association may not think you have your client's best interest in mind.