All Forum Posts by: Matt E.

Mehran,

I messaged you a referral. Sorry that he's in Madison but still might be worth your time contacting.

@Brett Russell

@Brett Russell

@Mike M.

@K. Marie Poe

@James Gefke

@Beau Ryan

Taking all of your advice, I told the seller that I didn't feel comfortable purchasing above the appraised value. She asked if I was willing to "take an average" between the old and new appraisals and suggested the price of 160,000 or 165,000. That's 7,000 to 12,000 extra in cash. Awhile back, I had expressed an interest in buying one of her flips and a different property as well. She mentioned reducing the price on these a bit for me if I was interested in the future in exchange for paying "a bit more" this time.

I know, it sounds like a used car salesmen pitch to sell me a lemon. I still want to trust her, admittedly with some skepticism. Since she would become my property manager, I thought about negotiating on price if she could operate the property with a reduced property management fee over a period of years. In the end, I may just have to pass.

Yes, it's about money and basic principles for buying real estate as an investment. But it's also about character. If the person who I've considered a mentor does not have my best interests at heart, it's time to part ways. Since I'm trying to do this internationally it's so important to me that I have people I can trust. And no one wants to feel taken advantage of.

If my thinking is all wrong, you would being me a huge favor by hitting me over the head with a big inflatable hammer that squeaks. Maybe they only sell those here.

@ Beau Ryan

Thank you for your suggestions. The seller was disappointed that the appraisal was low and she acknowledges that this was a game changer. She's not a person who would take advantage of me; she just wants to get out what she's put into the property.

After everyones's input, I clearly understand that overpaying would be a mistake. I trust people, but that doesn't mean I won't do my homework.

@ James Gefke

Thank you for your response. It's 3 unit multi-family in Steven Point. If I were to overpay by 25,000, I can't imagine an outcome that I wouldn't be losing money in the end.

I initially applied for a 30 year fixed loan but the bank could only offer me and adjustable rate in-house loan because the address I list on my tax returns is overseas.

@ K. Marie Poe Thank you! No, the cash-flow is not out of the ordinary. You're right. The seller is a reasonable person--if she were in my place she wouldn't being paying the extra cash.

Thanks again. It's so nice to be able receive thoughtful input before I make a decision.

@ Mike M. I will look at the comps again over the weekend. Initially they look very reasonable. I don't feel comfortable paying more than appraisal. I'll let her know that.

Thank you for mentioning the option of owner-financing.

@ Mike M. Thanks. Does that mean a second loan from the seller?

@ K. Marie Poe Thank you for your advice! Yes, the property is turn-key with long term residents in place. She would manage; her contractor would continue with maintenance.

It's good to know that the 2010 appraisal does not mean anything.

@Ramon Jenkins I definitely don't think anyone would pay 25,000 cash over appraisal. I don't even like the idea of paying a few thousand cash over that amount.

She and her partner have a 1031 exchange lined up. I was hoping to compromise somewhat on price because of all that she has done for me, but man, this comes to a surprise.

I truly admire all of you who are able to succeed in this business. Thank you so much for your guidance.

Matt

@Brett Russell Thank you, Brett. I'm financing the property with a 30 year 5/1 ARM starting at 4.75%. I can come up with the extra cash but I feel like I'd be a fool for doing so.

Last night the appraisal came in ahead of my first deal. The property was valued at $153,000. My offer was $178,000. The 2010 appraised value was $172,000; rent has increased and they've made improvements to the property since then.

The seller is a friend of my mothers. She's been my mentor and was going to be my property management as well.

Is there anyway that I can still make this deal work? I live overseas so maintaining this relationship is especially important to me. Nevertheless, I don't want to start my investing career with a poor buying decision.

I would really appreciate if anyone could steer me in the right direction.

Thank you.