All Forum Posts by: Mark F.

I wouldn't say every area gets "pounded". I'm an absentee owner and I get maybe 2 mailers a year - and one of those mailers is usually advertising property management services.  Where we're invested is a big college town with a high demand for rentals, so it doesn't seem like there's a whole lot of people sending mailers out. 

There's good niches all around the country where there's not that much competition, it's just a matter of finding them.

@Joe Aagaard 

Hi Joe, those numbers look pretty decent as far as I can tell, but what's your loan amount and what kind of property are you buying?

Also, if you're willing to come in with 25% down, you might be able to get the lender to cover more of your costs at the same rate.

This is a really great discussion. I've been in sales for a long time, and again, I've found that it's critical to put value into your offer beyond just price. If you make the conversation with the seller just about price, then of course that's what they're going to grind you on and you're going to hear all kinds of things like "well, Zillow says..." or "my uncles dog's hairdresser's nephew says it's worth...". 

On the other hand, if you make it about a positive lifestyle change, price becomes less of an issue. In other words, you ask great questions to find out why they need to sell, then your offer becomes less about price and more about being able to sell quickly so the seller can take that job in another city, eliminate the financial stress of deferred maintenance, or get rid of the headache of a bad tenant, etc. These types of offers are much stronger because they're about more than just price, they're about making one's life better. You're bringing more value to the table than just the money it takes to close the sale. 

The key to asking "why" is doing it casually and conversationally. If it seems like you're grilling, interviewing, or interrogating, the seller is going to shut you down. Probe about the "why" in a casual, conversational manner. Just get to know them and let them get to know you. This builds trust with the seller, which means they'll talk more openly with you and reveal information that can help you build a ton of value in purchasing their home beyond just price. 

The truth is, if it's a seller who thinks their home is worth full retail, but they've got tons of deferred maintenance, their home is not worth full retail. Most retail buyers will shy away from such a property, which means the buyer pool consists mainly of investors who need enough margin in the deal to fix it up and sell (or rent) for a profit. The home is worth what an investor is willing to pay to make the numbers work. Asking great questions, building rapport and trust with the seller, and uncovering the "why" behind the sale enables you to get past price and explain the situation as it is. This makes it more likely that you'll come to an agreement that is good for both buyer and seller. 

In CA it's implied to be a month-to-month lease if there's no formal contract in place and the tenant is writing checks and the landlord is depositing them.

@Bob C. Hi Bob, it's just the nature of the beast that you're going to get tire kickers a lot. Not everybody is motivated, and it's very difficult to try and make somebody be motivated if they're not. Just filter those out and maybe plan to follow up in a few weeks. It may not be a "no", it just may be a "not yet". If you're courteous and helpful on the phone, they'll remember you and call back when they're ready to roll. 

Also, another great tactic is to try and uncover the "why" behind their desire to sell. Don't make the sale about the price you're going to pay for the house, make it about how their life is going to be better by them selling to you quickly. Find out why they need to sell in a casual, conversational manner and make your offer a lifestyle solution, not just a price on a contract. 

As the old adage goes, people don't buy the drill, they buy the hole. In other words, what is selling to you going to do for me? How is it going to make my life better? That's what your sellers want to know. This won't work for everybody, but building this kind of value in your offers will help strengthen your offers.

Good call on including the property management. You may be managing it on your own now, but circumstances could change and you may change your mind in the future.

@Omi C. Hi Omi, sounds like you got a good deal on that loan. That's not bad at all for an investment property. And I agree, the loan officer should have communicated with you better so you were 100% clear on the requirements and it wasn't a surprise at closing. 

 What he said! :)

@Alex E. 

Hi Alex, yes, "primary residence" and "owner occupied" mean that you're living in the home. 

The official guideline from HUD about FHA financing is as follows:

@Jaksh H. @Evan Manship Be careful when you're quit claiming from you to LLC. Many loan contracts have a "due on sale" clause. In other words, if the title ownership changes (as it would with the quit claim), the loan becomes due and payable in full. Again, check with a good real estate attorney to avoid these headaches.