All Forum Posts by: Arron Paulino
Arron Paulino has started 58 posts and replied 233 times.
Post: Advice on Stagnant Properties for Sale
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Don Konipol:
Quote from @Arron Paulino:
Has anyone ran into stagnant properties that just take forever to sell? I ask since I have two properties that I really have a hard time moving. One has squatter issues that I constantly have to deal with, and the other has a mortgage higher than the sales price, so I am thinking of going the short sale route or deed-in-lieu, but I do not have experience with either avenue. The first one is free and clear, so at this point, I may just want to move on from it and sell it for anything, but I don't know what to do. Ideally, I was trying to sell the first and essentially break-even selling the second by utilizing the funds from the first for anything due at closing. The original plan was to have these as rentals, where I did rehab them once I got them, but that was a year or two ago. Is a fire sale of some sort worth doing just to move on with property one? Any advice on what I should do?
I have received seller financing offers, but they ask for way too long of a time period. Hence, I have resorted to cash only as I don't want to be attached to the property after the sale.
Post: Advice on Stagnant Properties for Sale
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Greg Parker:
Thats a tough situation. Maybe try a slow flip and find an eager partner with a little rehab money.
I agree. It's been tough and at this point I am just looking to move on. What do you mean by slow flip?
Post: Advice on Stagnant Properties for Sale
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Has anyone ran into stagnant properties that just take forever to sell? I ask since I have two properties that I really have a hard time moving. One has squatter issues that I constantly have to deal with, and the other has a mortgage higher than the sales price, so I am thinking of going the short sale route or deed-in-lieu, but I do not have experience with either avenue. The first one is free and clear, so at this point, I may just want to move on from it and sell it for anything, but I don't know what to do. Ideally, I was trying to sell the first and essentially break-even selling the second by utilizing the funds from the first for anything due at closing. The original plan was to have these as rentals, where I did rehab them once I got them, but that was a year or two ago. Is a fire sale of some sort worth doing just to move on with property one? Any advice on what I should do?
Post: Portfolio Sale Update
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Corby Goade:
Do you have an agent representing you? They should have some suggestions for how to build leverage in your situation, though it sounds like that might be limited.
In these situations, I typically like to require a buyer to put some skin in the game- release SOME of the EMD to me during or immediately following their due diligence. That scares away the tire kickers and forces any actual buyers to get right to work and not waste my time.
Depending on financing, there are plenty of other options for gaining some leverage- requiring faster appraisals, some form of appraisal waiver, higher EMD deposits, faster due dilligence periods, just to name a few.
I do have an agent for both of these remaining properties who has sold the other properties I had in my portfolio. Ultimately, it has been up to me to see what I am able to tolerate in terms of the purchase price.
I was able to retrieve one potential buyer's EMD but the other seem to be tire kickers. Trying to have my agent word it better in that we expect EMD at agreement of contract rather than once their inspection period has ended as they have been able to run away.
The EMD deposits have been fluctuating with each buyer from $500 to $5k.
Post: Portfolio Sale Update
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Bill B.:
You have to price property 2 on what it’s worth. It doesn’t matter own but what you paid for it or what you owe on it.
I assume you aren’t willing to sell property 1 for only $1,000 because you don’t owe anything on it. So you agree what you owe doesn’t matter.
I also assume you are losing money every month on property 2 with mortgage interest, insurance, taxes, utilities, etc etc. You either rent it out or sell it for what it’s worth. You’re just paying out of pocket now so that you don’t have to pay out of pocket later.
Good luck.
Makes sense. I may just have to take it as a loss and prepare funds to have it close at what the it is worth on the market.
I may just end up selling the free and clear property for what market says and get the most out of it right away.
This is correct. I was trying to think if it is worth it to rehab and then rent it out but without having much liquid funds available this play is difficult. I am trying to limit the funds owed at closing in order to sell this one off since it has a mortgage. Just trying to select the best option at the moment. I appreciate the feedback.
Post: Portfolio Sale Update
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Chris Steele:
Does property that’s vacant need a lot of work. And what is asking price. Thanks
It probably needs around $15-20k work. Current asking price is $65k
Post: Portfolio Sale Update
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
I am now down to my last two investment properties that I am looking to sell soon. One is free and clear and vacant with offers that have been coming and going. I have been on contract with some buyers who were interested and willing to buy it as is but either changed their mind at closing, which is inconvenient, or not willing to meet a price. I have already had it on the market for about two months now and taking lower offers than list price and what the appraisal value is just to sell it and move on. I've learned to not be emotional attached to the sale but am bringing a knowledge head to the table and not taking lowball offers. Any advice on dealing with lowball offers? I've had offers closer to list price but they end up taking too much time to close.
The other property has a mortgage around list price which is hard for me to take anything lower without bringing money to the table in order to close. It is a learning lesson and something I'll consider when doing my numbers in the future. It has been harder to get offers for this one as it might be higher than what the market is looking for, but just want to not lower too much due to the mortgage owed when closed. Any advice on this one? Not really sure if rehabbing it is even a consideration to raise its value due to me selling as is.
I am thinking the properties will cancel themselves at the end, which is fine so I can start anew with the knowledge I know now. Looking to sell these two, learn my lesson, and get into better investment opportunities going forward.
Post: MLS Estimate Accuracy
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Marian Huish:
Not at all accurate @Arron Paulino. Contact a local Realtor to provide you a realistic valuation.
That's what I figured, but just had to check!
Post: MLS Estimate Accuracy
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
I see these Redfin and Zillow estimates of what a property is to be worth. Are these accurate? Redfin shows a higher number than Zillow, but I am not sure. I understand comps, but just curious.
Post: Earnest Money Deposit in Contract
- Rental Property Investor
- South San Francisco, CA
- Posts 248
- Votes 89
Quote from @Rick Albert:
Quote from @Arron Paulino:
Quote from @Rick Albert:
Before I chime in please note that every state and area may be different, so I'm speaking in general terms. I'm not an attorney and you seek one if this is of concern.
You are generally officially in escrow once everyone signs off on the purchase contract and applicable counter offers. Whether there is an EMD (earnest money deposit) or not does not matter. It's the paperwork that solidifies it.
The purpose of the EMD is IF all contingencies are released and then the buyer cancels on their own accord, then you as the seller would have contractual rights to keep it. There can be exceptions.
If they cancel and they still had contingencies, then I wouldn't fight the deposit because they would be getting it back anyways. If all contingencies were released and you would be entitled to the money, then it becomes a business decision if you want to pursue it further. It just depends on your appetite.
If you are in a hot market, I've heard that a judge may rule in favor of the buyer only because if you enter escrow quickly with another buyer, then you didn't really incur any damages other than loss of time. I would argue you did because of carrying cost but I'm not an attorney.
Thanks for the heads up. The buyer literally came all the way to the closing date and decided to back out, which is an inconvenience for me since I could've just put it back on market asap. No earnest money was receive after the contract states that it should have been received after the 7 day inspection period was met. I think it was just bad etiquette on the buyer's part the whole way, which I don't really want to keep my head on it, so I've just decided to move on to the next one. Just wanted to see if it would even be worth the time.
I would also have a conversation with your agent. There is no reason why your agent didn't follow up on this early on. It was a red flag that they didn't submit a deposit. It means they likely never intended to.
I ended up moving on from this one as another backup offer was ready to go. I informed my agent to get ahead of this on the next one to avoid having this issue again. Just wish the other buyer stuck with the contract.