All Forum Posts by: Brad E.

@Anthony Harmon

Another way you might consider is going through the list of items in the article and get prices that are typical for your area for the type of property you are targeting and calculate the number once - 182.75 in the example.  If you are comparing similar properties, then use your number rather than a percent in your estimates.  Then you can come back later and do a more detailed analysis.

Personally, I like using the number better because it seems to be more realistic and not necessarily tied to rent figures.  This is not a perfect science of course and you'd still want to go into detailed analysis at a later time.

I also separate this out from maintenance and repairs.

@Ryan Detig

Thanks!  

Where I invest (college town) there is higher demand for rentals. Other than the obvious laws of supply and demand, what other economic forces put pressure on rent prices, both up and down? Thanks for any insight you can share.

Looks to me like your calculations are correct, so I wonder if the input numbers are.  I would take another look at the expenses.  Not sure how that tax you are referencing works.  Also I see you are including utilities which the buyer may or may not pay.  Also the mortgage payment looks higher than the number on redfin.

If you go with the first number for expenses of 5,813, you get a much better looking COC but still not great. One guess I could make about why it went under contract so fast is someone may be house hacking and ok with a less than stellar return in exchange for someone paying the majority of his/her mortgage. Hard to say but if your inputs are correct, I agree its not an attractive investment.

Great. 

Also adding @Myles Mierswa

Guess we should keep the poll open a couple more days.

hey guys looks like 8/24 @ 6:30 works for 3 of us according to the poll.  If everybody is good with that then let's mark it down.

@Joel Snipes 

@Georgui Kasaev

@Jonathan Malnati

@Sterling Cox

I'd look at it like a job interview...for him/her. They are working for you.

I'm interested in this as well. There is a property I know for sure I can get a great deal on (family memeber's) but it's about 2 hrs drive. 

So even though I feel like I can get a good return the rehab at a distance is making me hesitant.

Yesterday afternoon my agent called me about 5:00.  She said that the seller/seller agent is going to move forward with the appeal process.  

Apparently this process can take up to 10 days according to my lender.  The problem with that is my financing contingency expires on Monday at midnight.  My agent let me know we can file an extension though to allow for extra time.  

All that sounds fine but here's where I'm running into trouble, because some of the other things she is telling me aren't making sense.  

My agent says that the seller is saying no matter how the second appraisal comes back he's not going to come down to the appraised amount if he thinks it's low still, or much at.  Furthermore, he says he has a line of cash buyers waiting if this doesn't go through.  

My last question for my agent before hanging up was at what point can the seller walk away from the deal, to which she replied that he can walk away at any time he wants all the way up to closing.

With that said, here's what I'm having making sense of - 
1. If the seller can walk away at any time he wants, what is the purpose of the purchase/sale agreement?  It seems like it would be very common for a seller to back out of any deal when the next guy offers him an extra dollar on the purchase price. (I read the purchase agreement before signing, but I need to go back and read it again to see what it says about this)

2. If he has cash buyers lined up then why would he even bother with the appraisal appeal?  That is going to cost him ~$800 out of pocket to get another appraisal.  I cant think of any circumstance that would make sense.

3.  Similar to #2, if he is firm on his price is, and very confident in the value of it, why would he pay out of pocket for another appraisal? 

When my agent and discussed filing the extension on financing contingency, I said lets go ahead and do it, in order to give the seller more time to respond, to which she agreed.  Later last night she sends me a text message and said she wanted to talk to the appraiser today before filing the extension.  I said ok, but I'm not really sure what talking to the new appraiser would accomplish. Haven't heard back from my agent today yet.

I kind of want to call BS on the seller here.  What my agent is telling me is just not adding up for me.  I feel like I must be missing something.  

Would love to hear thoughts from you guys on this.

For me it has been making a mistake so big it would take me out of the game and I wouldn't be able to get back in. 

To be honest I haven't conquered it totally, but I think recognizing and labeling it helps a lot. 

When it hits me I just try to think logically about what I'm faced with. I know I'm my heart that even if I screwed up major I would still be able to come back from it. People do it all the time. It just might be a lot harder. But like most anything else I think it boils down to how bad you want something and what you are willing to sacrifice to get it.

So I tell myself that, and keep on rolling...