All Forum Posts by: Charles Kennedy

I'm also in the ATL and would like to house hack in mid 2018. Only problem I forsee is my work is in west midtown and finding something close to the area may be difficult.

Hey Joshua,

My experience has been in commercial, but I imagine @Mike Cumbie may be able to tell me if this is allowed with residential sales as well. 

When multiple offers have come in on commercial properties and owners want to maximize sales price, they will have multiple "rounds". First they will take all the offers and select some that they know have the financing means and ask them for their second round bids. This will cause them all to offer more. After that they request one more round for highest and final offers. 

I guess they believe the second round will cause the price to go up a bit more, which for how little effort, may be worth it.

Hey Joshua,

My experience has been in commercial, but I imagine @Mike Cumbie may be able to tell me if this is allowed with residential sales as well. 

When multiple offers have come in on commercial properties and owners want to maximize sales price, they will have multiple "rounds". First they will take all the offers and select some that they know have the financing means and ask them for their second round bids. This will cause them all to offer more. After that they request one more round for highest and final offers. 

I guess they believe the second round will cause the price to go up a bit more, which for how little effort, may be worth it.

With my job we have the good fortune of having access to co-star where we can find recently signed leases on commercial properties for similar asset classes within a selected mile radius. However, even without a paid service like costar, when determining rental rates, comps are king. You should look around within a relatively close radius to find properties that also look similar. Ask yourself very honestly, would I rather rent at this property or my property? If the answer is your property, you should be higher than them, if the answer to that question if their's: maybe you should be lower (or if they are fully occupied, match them or be higher!). 

It's also fine to take an average of of about 5 comps near your property, but make sure they are similar (don't compare SFR 2 bedroom houses to a 2BR apartment unit).

To fully answer your question though, I think zillow can be good, but definitely leverage your network and talk to other investors and property managers in the area to ask their idea of rents.

Could anyone chime in one who they are sending these to? I guess your trying to get people who are absentees or have tax liens, but how do you go about getting this list?

Also, what do you say when the person calls? I'd assume they would ask for a price? I guess you can tell them you want to a bit more research on the property and you just liked it, ask them if they have a price in mind and then conduct your analysis?

$500 is ridiculously steep in my opinion when it seems he may have to do nothing. A prepaid gift card of $100 would be nice, but I suppose it depends on your relationship with this person. Since you say he's a friend this sounds more like a favor so a small gift would be fine. If it was a more professional relationship, higher compensation would be appropriate, but in this case a gift showing your appreciation would be appropriate.

I was just listening to podcast #196 about taxes, LLCs, etc. The guest on the show stated that he always thought @Jeff Copeland 's method was the best, until he heard about an investors kid who was drunk driving and caused a bad accident and they went after all of his assets that were not in an LLC. The guest who was a CPA said similar things that you can mostly transfer it, and cure it if they do have the due on sale clause, so I guess it's risk, but doesn't happen to much.

I think this is something where having a good relationship with your lender is key. If you have had plenty of loans with the same bank, always paid on time, etc. they would have to be fools to call a loan on you for something like this. 

For a commercial loan the property is more important to them than the person, at least in comparison to a residential loan. They will want to see the financials of the property before they are comfortable making a loan.

@Mitch Messer 

Thanks! I always include vacancy in my proformas, but I'm typically looking at commercial deals. What do you put in your proforma for a SFR or duplex? 5% just to be conservative? Thanks for the management and legal expenses! I forgot about those.

@Jeff Kehl Great response. I am recently out of college and have yet to own either so it's better to hear insight from people who have been around and have real experience! I'm not sure I agree with the management and roof argument. I feel the management fee would be about the same if you consolidated it all, but your arguments regarding appreciation and lack of turnover in houses is a great point! 

Thanks for sharing.