All Forum Posts by: Dennis Cosgrave

Internal rate of return is your return, net of all expenses (do not include the principal portion of your mortgage payment. Divide that number by the total amount of money you have invested in the property, including closing costs. 

If you can sell the property for $1M, I would sell it and 1031 into a larger property, preferably in another state. Yes, your tax base will be higher but so will your income. You need to do an in-depth analysis and find a deal that works better than what you have now. Given what you have to work with, they are definitely out there. 

Based on your description, it sounds like it is not going to cost $100k to bring it up to marketable condition. I would list it at the lower end of the range, as is, and see what happens. You can always lower the price later if you get no response. 

If he wants to counter, he will. I would leave it alone. Once the offer expires, you might want to keep an eye on it and follow up in a few months if it is still not sold. In the meantime, keep looking. Don't wait for him. 

This may sound a little weird but I developed a 6th sense for problem tenants. I just get a bad feeling regardless of how good the paper work is. Another little trick I learned, was to take a look at the prospective tenant's car. If it was dirty and the interior was filled with trash, that would usually reaffirm my bad feeling. If that is how they treat their own property, are they going to treat your property any better? Btw, I had only 2 evictions in 25 years with 50+ units. 

Powell is definitely encouraging higher inflation. That will mean more money printing which will inflate asset prices. That is good for real estate. The downside is that inflation will permeate through the entire economy making everything more expensive, leaving less disposable income for consumers. That will likely increase downward pressure on commercial real estate as if COVID has not done enough already. 

I went through this situation once. The wife of the seller refused to move. She called me and told me. I immediately called my attorney since I had already sold my house and I was planning on moving into that house. My attorney said, no worry. If they do not close, move all your stuff into storage and check into a hotel. The breach of contract lawsuit will cover the costs. 

I have lived through distressed markets before. My strategy was to follow the sales statistics; number of properties sold and the average selling price. I waited until both of those statistics turned positive for 3 consecutive months. That was usually the bottom. 

Jeff S. I think when a private lender is charging you 12-16% for a loan, which is more than double the market rate, they can easily afford to insure themselves. Asking the borrower to cover those extra costs is adding insult to injury. 

After I was fired from my 3rd job, it became clear to me that corporate politics was not for me. To guarantee that I would never get another job, I sued for wrongful dismissal and won. I was blacklisted in the process. Never looked back.