All Forum Posts by: Dan Bernstein

@Brian Becker, There are still areas near DC where the numbers make sense to do a flip.  I like @J Scott's advice, pass and find something closer.  

Good Luck.

@Wilhelm J. Lieto, I would also recommend a duplex or quad in the DC Metro area.  $350K is not enough to buy a quad.  In NOVA, most quads close to the beltway are going to be over $500K...We are working on one in Falls Church that is over $600K.  Arlington has a large supply of 4 units, but nothing on the market and like Falls Church, those are going to be out of budget.  Duplexes, however, are in budget.  

You could Buy a duplex in DC in an area like Trinidad. Use your VA loan and try to roll in closing costs in the deal. Take your $20K and refurbish the units so you can get the maximum amount of rent. Hold the property for 5 years, save and do a condo conversion and sell the units, then roll that profit into a 1031 exchange into a 4 unit or other larger multifamily.

If you buy a multifamily under 4 units, you can use a residential loan and rents are considered during loan approval.  Do you have $250K in cash or have you been preapproved for a loan amount of $250K?

@Rob Lawrence, In the DC Metro, Most listings are offering 2.5%-3% to the buyer's agent. I have noticed that listings below 2.5% tend to sit. Its weird, because even in the DC Metro Area, you have more listings offering 3% commission in VA and 2.5% in the district. Agents shouldn't look at the commission being offered when showing properties due to ethical reasons, however thats an impossibility, because human nature is driven by incentives. There is a fine balance between incentivizing people to act and budgeting on your end. Most people don't consider the time and cost on the agent's side. Your listing is in the low 200s, I would think that 2.5%-3% would be a huge difference. When you are looking at $500K plus homes, this difference would be less drastic to the agent's bottom line. Its hard to quantify, because you could be losing more money in decreasing demand by disincentivizing agents to show your property. It is impossible to calculate this number, because you will never know who didn't show your property.

Good luck!

@Caroline S.  I sent you a PM with my phone number...PP won't allow posting phone numbers on forum posts.

@Caroline S. Interesting that the EMD is paid in installments. Usually a builder will ask for the EMD upfront in one lump sum. Are you sure its an EMD deposit, meaning your money is being held in a separate escrow account? Has the land been taken through entitlements yet and when is the build start date? There are too many unknowns here to give you good advice and without looking at your contract, it would be hard to advise you. As far as the EMD is concerned, both parties have to agree to disperse the funds and there should be a termination/default clause in the contract. If it is a large builder, like Ryan Homes etc etc, they will most likely return your money if you bug them because they typically don't want to deal with the headache of you tying up the property over a few thousand bucks. I've had a handful of clients that have backed out of a new construction contract without contingencies to fall back on and in all cases, since they were large companies, the EMD was returned. In one case, I was shocked that they gave the client's money back.

Happy to chat, PM me.  Good Luck! 

I'm sure any of my title companies can help you...i'll pm you.

Wholesaler friendly?  What do you mean by that?  

Doesn't sounds right.  PM me and I'll look into them.

@Leland S., I think you are looking at this whole commission thing wrong.  You are paying a commission to a buyer's agent to incentivize the agent to bring the buyer and close the transaction.  Without skin in the game, why would an agent work hard to close a deal where he/she is not getting paid.  Further, most states require an agreement where a buyer represented by an agent has to pay X% commission.  From the buyer's perspective, that commission has to be paid and is factored into the bottom line of the transaction.  

Also, all of the data I've seen suggests that FSBO's sell for way less on average than traditional sales once the sales price exceeds 150-200K.