All Forum Posts by: Jason Chen

I've seen these types of deals before, and this is what happens.

Someone inevitably will buy that property sometime within the next 2-12 months. We don't know who it will be, but it WILL be someone, and that someone will be a SUCKER.

Most likely the price will be about $225,000 or so, and the investor will think he is getting into a pretty good deal (hey I got this 9 unit property for only $225,000!). They will basically do a disastrous job at evaluating and estimating rehab and repair costs, and by the time it's all said and done, the deal turns out to be sub-par and an utter waste of time and money.

The reality is this - either you get it for $50,000 or walk away. Most likely some investor will be willing to bid higher than that, but I'd still put in the offer, if for no other reason to start a bidding war and cause your competition to make a mistake.

Time to re-lie and do a double lie, and finally admit that you DO in fact own $1.6 million dollars free and clear in rental properties that net you 18k a month. Then we can all get back on topic.

A lot of opinions from both sides

I like Nathan's the best. We can't judge how uber will exist or not 6 months or 6 years from now, because they could just as likely get fired from their W2 job 6 months from now.

After hearing both sides, I think it's totally up to you. Just use common sense. If the renter hasn't been evicted before and has had a reasonably stable employment history and great credit, it's not likely for them to start habitually getting kicked out of apartment after another. If it were me, and their income met the minimum requirements and etc, I'd give them a go. Out of all the units I have, they'd probably be the only uber driver anyways.

Will - I didn't even look at the numbers after I saw the price of $700,000 and 10 units. That's $70,000 per unit. Maybe you could negotiate the price down to $600,000, which would still be $60,000 a unit. This deal is about as exciting as watching paint dry. I'd rate it a 1 / 10 (seriously)

For $700,000, this property better have been built in the year 2065, not 1920.

I could tell just by the general shape and structure of the house that this isn't going to be a cash flowing property. In fact, it's not even a good deal. In double fact, it's a terrible deal.

This house for this price is a classic career-ending deal, even if you plan on living in it. 

I've seen similar types of homes in my city of Ocala, where these houses were built in the 1870s (literal Civil War era time). Some investor thinking he is smart buys one up for $300,000, puts $50,000 in renovations into it, and lists it for $475,000, only to have someone offer him $200,000.

Just LOL @ paying $370,000 for something that literally generates you ZERO cash flow. Is this in Mobile, Alabama? Even worse of a deal now, as you can forget about price appreciation helping you out. If you value your future and your money, I would run away from this deal as fast as possible.

......but for $75,000 I would buy it 

Step 1: Go to the bank

Step 2: Get a loan of $100,000

Step 3: Buy $100,000 worth of cryptocurrency

Step 4: Wait 7 years

Step 5: Collect $1.6 million 

Step 6: Buy $1.6 million in real estate rental properties

Step 7: Make a post on biggerpockets about how to prepare your $1.6 million in rental units for retirement

Step 8: Sell all properties

Step 9: Buy $1 million in cryptocurrencies

Step 10: Wait 7 years

Step 11: Collect 100 million dollars

Upon a third review, I think the real mistake isn't even really location. It's that you really should've accepted the property for about $290,000 or even less. $300,000 might've been ok. There was a probable misappraisal when you first scouted this place of about 12-15%, and that's all it takes to differentiate a solid flip vs. one that might bite you a little bit. The good news is that the worst case scenario is that you sell the house for much lower than anticipated, and you lose just a few thousand dollars which really ISN'T disastrous in this game. 

I have reason to believe that this area is all about the marketing. The highway stuff is probably BS

If you look at the price history, you can see that they paid $340,000 total for the property. They probably spent let's say $80,000 total to renovate it to make it look the way it does today. That brings the total to $420,000. They need to sell it above $450,000 to at least make a little something, but the problem is that it doesnt appear that even an offer for $450,000 has arrived yet.

Also, another look at the price history will show you that the original listing price for this place was $496,000, and it sold for $340,000 after several price drops. It sat for 5 months for sale before the current owner bid $340,000 and wont at that price. This should be an indicator that this area is not in high demand. Not even the realtors or the bank knew how to correctly appraise the property at first because activity around here must be really low.

I am like 95% sure it is all about marketing at this point. Nobody is aware, and because of that, it becomes difficult to command a price above $400,000

One suggestion which might sound silly, but then again I'm just throwing out random stuff at the wall to see what sticks.

I noticed the lawn was very bare. Sure, there is green grass, but there's not any interesting landscaping going on. Don't underestimate the power of curb appeal. The lamest stuff like $1,000 in a nice flower garden and some bushes/shrubbery/small trees, and mulch and bricks and stonework could alter people's opinions a LOT. Learned this from people who were masters at their craft. The shrubs and wooden plants I see are bare. Some don't even have leaves.

When I walk up to your property, I'm thinking in my head that it's worth about $100,000 less than your asking price of $499,000. This doesn't "seem" like a half million dollar property upon my first impression when walking up to it from the front as I pull up. People make home buying decisions mostly upon emotion. This isn't news, but it's easy to forget. The house looks plain on the outside, and I don't get the sense of modernity in any of the design or the exterior architecture of the building. If the comparable sold near you look the exact same, then you might as well disregard everything I say. I just hope you didn't pay much for this place just in case you have to lower the price even more.

This is odd

On one hand, is it because of the marketing? Or is it the highway? Or is it a combination of both?

You've stumbled on to one of those pretty uncomfortable deals where everything looks good on paper, and even in person, but for some reason, it's just not selling. Also, the answer isn't super obvious. There is however, a solution to your problem. We just don't know what exactly the solution is yet

I know that for me, living next to the highway for a home that much would be a GOOD thing, as I am someone who likes to drive often, and I am sure the highway is super convenient for me to visit close by areas.

Let me ask you these questions that others have not ask yet:

1. How close it it to shopping areas, like WalMart?

2. How close is it to the post office?

3. How close is it to the nearby schools again?

If the answer to question 1 is more than 20 minutes, then that might be why it's not selling too quickly. It might be too remote, and the customers for that area might want to patron shopping centers more conveniently.

Also, how many potential buyers have stepped in just to preview the property? If the answer is not many, then I don't think it's really the price. It might be because people are simply just unfamiliar with that neighborhood/location, and it's up to you to aware them. Everything looks good, and I'm sure the price is reasonable.