All Forum Posts by: Dennis Cosgrave

The worst thing you can do is overprice a property. A good rule of thumb is that if the property is priced fairly, you will know within the first 3 days that it is listed on the market. Realtors will be calling. If the realtor receives no calls in the first week, you know the property is overpriced. As you reduce the price, it raises the question, what is wrong with this property, which will just invite low ball offers. If it sits on the market long enough, it will only sell at way below asking price. The best solution is to take the property off the market for a few months and then relist it at a fair market price. 

I don't believe there is just any single tool to analyze any property. Just as each deal is unique, each property is also unique. You are better off developing your own system which will take into account the state of repair (or disrepair), renovations (and the cost of those renovations) that can justify higher rent, the regulatory environment, as well as neighborhood conditions. 

You're welcome. When it comes to real estate, due diligence is the key to all aspects of it. You can never do too much homework.

I agree with Robert Comstock. I got started when I was in school by buying a 3 bedroom condo and rented out 2 rooms to other students. The rent covered all the costs so that I lived for free. I had a part time job, saved my money, and when I graduated and got a full time job, I sold the condo and bought my first triplex. 

The best practice is to plan for the worst and hope for the best. If you have had these experiences before, then you have a good idea of what those costs will be. If you are renovating, it is always wise to add 10 to 15% for unexpected issues that you may encounter. Better to be pleasantly surprised than shocked.

If he has significant credit card debt, I would sell and pay off the high-interest debt. Chances are the interest rate on credit card debt is significantly higher than any return he can get on an income property. Once the debt is paid off, he should have disposable cash to save for a downpayment on another property. 

It is standard procedure to pay a deposit or at least a percentage of the cost of the work upfront. However, before I would do that, I would check references and see if they are registered with the Better Business Bureau. Be sure you are dealing with someone reputable before you hand over any cash. 

My experience has been that the municipality does not negotiate. Pay what is owed otherwise the water will not be turned back on. As far as Cook County is concerned, everyone knows that the county, as well as the state, is desperate for revenue, so that makes it even more unlikely that they will negotiate. 

The first question that came to my mind was, Who is going to manage your property while you are on your world tour? Do you have someone you can trust and who is capable? I would suggest you set the wheels in motion to plan for your future financial independence and THEN travel to your heart's content. 

I think it is a function of the severity of the correction. In 2008, no area (with the exception of Texas), was immune from the crash. Texas real estate never appreciated that much prior to the crash because of the low oil price environment during that period. If you were to extrapolate that to current conditions, it suggests that the safest markets are those that have seen little or no price appreciation in the past 7 years. Then the objective would be to find properties with good cash flow with no expectation of capital appreciation.