All Forum Posts by: Dan Maciejewski

Quote from @Will Barnard:

Quote from @Diane Tycangco:

Hi, I was planning to just look in Redfin, Zillow, etc... To look for properties.  Do I still have to be a member of the Sac/Fresno associations to use my license to get a discount when I buy? 

Thanks

You do not need to be a member of their association to earn commissions, but for access to their local mls, you may need to be. Contact their board and inquire directly.

Technically, the offered commission is only to members of the MLS. Most agents will pay, but CYA says to get a commission agreement (or in this case put the credit in the contract) signed at offer acceptance.

 Usually, we (people in general) are very bad at judging ourselves.  I have found doing actual market research to be an invaluable tool in almost everything.  Whether it's interviewing ideal clients to see what they are looking for to interviewing ideal tenants / guests to see what they are looking for.  

AND, asking people that surround you, from family to coworkers to supervisors and direct reports about what they think you're good at.  The answers may surprise you.  Here is a template that I used for my most recent ask:

Hi [contact.firstname,fallback=],
I’m attending a training program that’s helping me figure out my own unique abilities and the person who’s directing the training encouraged us to ask a close friend to provide some feedback on what you believe I’m skilled at and not skilled at. Here are the questions:
1. What are my strengths? What can you count on me for? (Please use 3-4 things)
2. What are my weaknesses? What can you not count on me for? (Please use 3-4 things)
3. What is my unique ability? What am I the best at?

Thank you so much for your time. This will help me to 10x my service and be a better Realtor and person!
Have a great day!

Also, use some personality tests (not meyers-briggs) that give you a concise profile.  The ones I like are: DISC, Enneagram, KOLBE, and 80/20 marketing.  They can give you a snapshot of what your personality would be good (and bad) at.   They should be fairly consistent, and with ga few, you should get a great idea of what you should pursue that can provide value (the true secret to everything) to the world.

For example, this is from an old DISC profile of mine -- it looks like I'm in the right career:

Based on how you prefer to behave, an ideal climate for you is one that provides you with:
• Highly specialized assignments and technical areas of responsibility.
• Operating procedures that support sometimes complex processes.
• Variety in the work tasks and multiple projects.
• Freedom of speech and expression.
• Activities to get and maintain the attention of others.
• Quality standards in which to support and maintain.
• An environment that supports your critical thinking skills.
• A democratic supervisor and work environment

Quote from @Dominick Marschall:

Hello, 

I'm selling a duplex I have. I have a signed purchase agreement from the buyer. We are supposed to close on April 1. They bought with no inspection. The appraisal came back exactly at the home selling price with no repairs needed. 

Yesterday, they came to my realtor and said they want to cancel and have their earnest money refunded. They sent over their cancellation later, I have not signed it. They were buying my home by doing a 1031 exchange. They put their other rental on the market after signing my purchase agreement, but later found out they have a large repair bill on their rental in order to get it sold. Hence the reason they are trying to back out my buying my house. I knew this may come up as an issue so we made sure to include the verbiage in the PA "In the event **their rental address** does not sell and close by 4.1.2022. Buyers agree they can still perform on the closing of **my home address** on 4.1.2022 using traditional lending." 

So in essence, they still have to buy my house even if they do not sell their rental and do a 1031 exchange. My realtor is reaching out to their broker to get some document (I forgot the name) in order to make sure that financially they would still be approved for a mortgage and cannot back out based on not having financing fall through. 

In my eyes, this deal is closed and they cannot back out, but I was hoping to hear if anyone has had a similar situation and how that may have played out. I'm located in Minnesota. 

Or what is the most probable outcome of this?

What should my next steps be to prepare ? Should I contact a lawyer or at what point should I get a lawyer involved?

FYI the buyer is a real estate agent. 

Thank you, 

This will depend on the contract.  You'll get a better answer from someone licensed in Minnesota, but I thought I'd chime in.

I am not a lawyer or licensed Realtor in your state -- this is not legal advice.

A quick look at your contract shows that you have an inspection addendum.  It looks like they can cancel (with an unsatisfactory inspection report -- which they all are) within the inspection notification period. 

If they are in the notification period, they can cancel and get their EMD back.  My guess is that, if the appraisal was done, then the inspection and notification) period  has run out, but you'll check your contract.

This is with the caveat that most earnest money is chump change.  If you dispute it and they make a claim on it -- it can get pricey to fight over it.  More people let it go than not in my experience but there are always people that love to litigate!  The EMD is definitely negotiable in my experience -- sometimes you can ask for it all, or split it, or give it back and get them out of your life, and everything in-between!

Also -- I love/hate that MN needs a Meth House clause in the contract!

There are amazing opportunities for great ROI in certain locations in Pinellas County.

Even with the elevated purchase prices, high insurance, and increasing interest rates, there's still room to cash flow.  In the right place you can see ADR of $300-350 and occupancy at 75%+ at purchase prices $450,000-650,000

Just to clarify:

There are a lot of cities, each can have their own rules.

St Petersburg only allows 3 rentals of less than 30 days in a rolling 365-day period.  So basically, no Short Term Rentals there.

St Pete Beach (a different city) has several (most) residential zones that do not allow STR, or only allow a limited number of turnovers per year. You're pretty much limited to purpose-built condos that allow it, and they will limit your max ADR because your competition/neighbors isn't necessarily motivated to push rates. M Ost other beach towns have the same types of regulations.

Clearwater does not allow rentals of less than 30 days.  And they aggressively enforce it.

There are great locations close to the beach, and on a few beaches that do very well for STR/vacation rentals, though!

Also, as you look in Florida, know that the rules can't get stricter -- the State passed a law that says if the cities regulate STR to make it harder, they can lose all restrictions.

Quote from @Joshua Slatton:

Rehab property in Oldsmar under contract, looking for rehab bids.

E: [email protected]

 If you find someone good, let us know.

One of my referrals is no longer doing anything residential - only commercial, and another is too backed up to bid on anything.

Quote from @Brandon Wallace:

Do FHA 203k loans require all the rehab to be done by licensed contractors or am I able to do the work myself?

 Yes, licensed contractors need to do all the work.

Talk to a lender that likes these -- not many do, but some lenders LOVE them.  They will be able to talk you through the whole process and they will have contractors that like working with them,

No, it's not common, but people are always coming up with ways to "get one over" on the world!  Everyone wants to have their cake and eat it, too!

The pre-paid guests should have their payments transferred to the new owner.  Just like with long-term tenants.  You are taking on the liability of hosting them, including insurance and cleaning.  They don't get to keep profits forever ADN pass of the cost of doing business-- if they want the income, they keep the property.  Technically, all bookings should be cancelled and possibly given the option of re-booking with the new owners.  Here's a thread on Airbnb Community Center:
https://community.withairbnb.c...

When selling a business (as STR / Short Term Rentals are), you should be accounting for everything at the closing. There should not be business that carries over, unless there's a new contract for that. As @Joe Splitrock says above -- they factored that into their sales price.

If the property is being sold with the bookings in place, that was the deal, the buyer gets the bookings.  Obviously you can negotiate, but that's my thought.

I'm not a lender but I've some experience with this.

The answer is no.  You cannot get a second home loan on a property that is built and managed as a vacation rental.  Or to put it as Fannie/Freddie do:

the property itself needs to meet certain guidelines. It must be:

• Occupied by the owner for some portion of the year
• A one–unit home (not a duplex, triplex, or four–plex)
• Suitable for year–round use
• Owned solely by the buyer
• Not rented full–time or operated under a timeshare arrangement
• Not operated by a property management company that has control over occupancy

The good (not really) news is that the advantage of the 10% down second home loan is going away. Fannie/Freddie are now treating it pretty much as an investment loan, and the rates are going up to match investment loans. So the only advantage is a lower down payment, but your monthly payment will have the PMI and a higher rate, so your cash flow is going to tank.

They basically do not want to buy any more investment condos.  Period.  They made it much stricter last year (limiting the number of them that any given lender could have in their portfolio), and now they are raising the rates to disincentivize buyers.

But there may be non-conforming loans/lenders that can get you in for 20% down.  You will want to ask about non-warrantable condos.

AS @Sarah Bojorquez says, check for an assignability clause.  My state's contract has an assignability clause built in with 3 options:

May not assign

May assign but buyer is still liable to uphold contract terms

May assign and be released from contract terms

It sounds like you don't know your state's Realtor contract, so you should definitely read it.  It will give you some pause about your contract.  Every clause in there came from some BIG litigation.  It's a lot of CYA, but needed.  Real Estate is the most litigated area in the country.

AFAIK, anyone can use any contract.  If you can see it, you can use it -- it's not copyrighted or anything!  

I can second Pinellas County.  I have a lot of clients in the West and Midwest moving their money via 1031 in to my market.  Or simply expanding their portfolios to include Pinellas / Tampa Bay Area.

Be warned, though -- we look nothing like some other markets!  A lot of people come here and expect their strategies to work here.  If you simply look at list price to sale price or appreciation, sure -- the whole country is "hot."  We are seeing 40+ offers on homes, appraisal gap waivers in excess of 10-20% of contract price, 50%-80% cash sales depending on area and price point, homes selling for 30%+ over ask, nobody wants to see "escalation addenda," etc. . . 

For your questions -- you might want to look for areas / cities / strategies before asking for people. Most of us will tout our areas!! I have heard that the FL panhandle has goo ROI, but I'm not investing there so I don't know. Also Gulf Shores AL.

And, if your returns are looking good, you may want to just invest your proceeds instead of getting out of your current investments.  You may just need better tenants / property managers.  If you're seeing great returns despite the houses being high-maintenance, then that's not a bad trade-off.  Although, great percentages but low cash flow does get old.  Revenue fixes everything and you can't put percentages in the bank!

So, a lot of people decide that an area can be "topo desirable," and forget the returns and just refuse to compete.  Despite all that, our returns are still above average and looking better despite the rising costs of acquisition (mainly the purchase price).