All Forum Posts by: Andrew Johnson

Eric Armstrong I get the app crash pretty regularly. It doesn't when I'm scrolling, just when I try to open into a thread. I'm guessing it has something to do with updating the thread, if it's still considering "trending", etc. as it doesn't crash (for me) in other areas of the app.

Danchrisandre Delgado Numbers aside your friends might be concerned about location. If it's a 90 minute drive you could be looking in the Inland Empire. That market crashed and burned the 2007ish crash. If they see home prices peaking again they could be concerned you're buying in a vulnerable market. I know it's a shot in the dark but it would be where a nebulous "be careful" warning is coming from.

@Account Closed I think you might have misunderstood what I meant by DTI. You're right that you can lose your salary job tomorrow. The benefit of that salary job is both salary (obvious) but also that banks look at the salary when it comes to debt-to-income. If you have no non-real estate income you may not qualify for financing and you'll probably have to look at non-traditional financing sources like hard money lenders. Instead of an interest rate of 5% (just for round numbers) you'll end up at 12% (again just for round numbers). Your cost-of-capital just increased ~150%. This isn't about "can't" vs. "could", it's about finding your best avenue towards "could". So questions for you: 1.) How much faster could you accelerate your path to $50K/year if your cost of capital wasn't 150% higher? 2.) If you worked another 12 months and saved enough capital to do 1 more flip a year how much faster would that enable you to hit your $50K/year goal? Crunch the numbers based on your assumptions about flipping houses, timelines, reasonable profit margins, etc. Maybe I'm way off base and those things don't make material difference to a flipping strategy.

Lou Ruggieri If the property is professional managed a month-by-month T12 should show rent collected that month. Additionally, during the diligence phase you should ask for copies all of the leases. That should tell you when they signed the lease. So you'll know if they all magically showed up 3 months ago. Maybe I'm naive but I think the bigger risk is under reporting of expenses rather than inflating top line revenue. All of that aside, if you take the numbers provided as "close to accurate" and establish a cap rate that you'd like are you 5% away from the purchase price or 50% away from the purchase price?

William C. If I could turn $40K into $1K a month I'd do it all day long. You rarely will see a 30% annual return without huge risk.

@Annie Li Okay, well at least things make a little more sense about why the PM was being obstinate with communication, won't forward you emails, etc.  I couldn't figure out why the PM wouldn't at least eat some of the cost to keep you happy.  For what it's worth I don't think that your situation would have made any difference if you had your property in the mid-west or 30 minutes away from you.  You had a PM who had washed their hands of you as a client (not saying it was right) and was going to do the bare minimum that they were required to do.  Sure you might have been able to go over there to see the burst pipe but if you're not a plumber you wouldn't know if it was a $25 fix (what plumbing fix is $25?!??!?) or a $500 fix.  Okay, maybe you would know if it was a $25 fix but I would have no clue.  Nor would I have the time/inclination to sit around waiting for 3 plumbers to come around and give me a bid to fix the burst pipe.  

@Annie Li You're right that there's probably shared responsibility here.  But there's also the practical matter of right vs. legally enforceable vs. cost-effectively legally enforceable.  Try and figure out if there's some kind of win-win to salvage the situation/relationship/etc.  If you view "partially responsible" as 10% of the cost and they won't eat $50 to make you happy that says as much as anything else.  Ask the PM what they would think is a fair solution.  If the answer is "you're 100% completely responsible" then I'd start looking for a new PM (guessing you already started that).  I can't imagine that it's worth trying to recapture anything legally given you're out of state.    

@Dan Lukens You're right that it's best to always have a positive interaction.  That said it doesn't seem like you like/trust/etc. the interaction with this particular agent in the first place.  Regardless, a pain-in-the-rear-buyer that closes a deal is worth money.  The nicest-buyer-in-the-world that doesn't close a deal is worthless.  And, yes, realize that some of this has to do with the bank and not just the listing agent.  Then again if this is the niche of the particular agent then likely future deals will progress the same way: low listing price -> bank refuses -> "high" counter -> negotiation.  It's unlikely he's doing this strategy without the full knowledge of the firm he works for.  So, like I said, you can try going above his head but on a practical level I'd leave your $150K offer as a best and final.  If it is some (unlikely) bluff to boost of commission he'll come back to you if he can't find a better offer pretty quick.

Abad Marroquin This will be the most obvious statement ever but always look at the age of the property. If you have a roof that needs to be replaced, parking areas that need to be resurfaced, HVAC systems on life-support, etc. you'll likely have to come out of pocket as your cash-flow wouldn't have yielded adequate reserves. While it's easier to look at capex as a percentage of rent I always take the approach of looking at timeframes of building reserves needed to pay for them so I don't go upside-down in a property.

Dan Lukens You might as well try going above his head. There's really nothing to lose, the bank either will or won't accept the offer. All of that said, I think most agents would value a "done deal" over getting an extra $15K on a deal. At 3% commission the difference is less than $500 and nowhere near all of that $500 is going into the pocket of the agent (there are expenses, splits with the firm, etc.). While it's possible they are trying to bump their commission I don't think it's probable. Others may disagree :)