All Forum Posts by: Michael K Gallagher

Hey @Oswaldo Torres welcome!  and congrats on jumping in.  Its not a book I read when I was starting out but it is one I wish I read earlier.  Its called "the 4 tendencies" and it will teach you a metric S**t ton about yourself and why you do what you do....and that is a very powerful understanding to have when trying to be productive and grow.  Any particular asset class jump out to you as fun or exciting in Real Estate?

Fantastic deal!  If you don't mind me asking what are the rents like for each unit?  Are you doing normal long term rental or getting into any medium or short term?

@Alan Walker Thanks for sharing.  Thats fascinating to see.  Here in Central OH we only saw about 13% YOY increase in price.  Out of curiosity have rents in your market increased proportionally to the home prices?

Congrats! if you don't mind sharing what is the JV deal structure? Just curious as to what options are out there.

Hey @Tony Win If this is a property on the MLS then the Seller already has an agreement with the buyer as to how much the seller will be paying in commissions on the sale. Just because the listing agent showed you the home does not mean they are representing you. Now if you had them write up an offer thats a different story in my mind... Regardless of what the listing agent said unless you signed a contract with them to represent you, you are free to bring your own buyer's agent...at least from what I can tell.

@Jason Winter why would you have to pass on the deal?  Was the verification of rent stipulated in your contract?  If it was then its pretty easy to delay closing until you get that, or extend your inspection period until you get that.  If it was not in your contract then yes it is reasonable to expect them to be able to provide that....but in the case that they cannot, which I think is your question, you are wondering how to handle the worst case scenario.  

Then I would weigh the benefit of the house hack, or having that rental income in 12-18 months, vs the potential short term pain of a tenant who is not paying.  It sounds like if the one is not paying they are about to go month to month and you can simply not renew the lease with proper local notice followed. 

If you truly can't get the seller to provide the rent payment verification then its just a matter of how much is the benefit worth to you in the 3-5 year view.  And if a worst case does arise, is there a way to handle that?

  

I'm not sure what is specific about Cali laws but it would depend on your agreement with your agent.  Normally the tenant side comes out of the full commission paid.  But it would depend on what your commission agreement with your agent has in it regarding paying out other brokers.  

@Ignacio Linares Its not impossible but its not common. Certainly its doable, especially if you are doing full rehabs or doing off market deals. 

Hey @Jason May that is kinda tricky, now keep in mind I'm not an appraiser and I don't live in your market and this isn't official advice and all that....but There are a couple ways to go about this in my mind.  Where I would start is finding out if there truly are no 2 bedroom houses that have traded in recent time to be able to run comps, I'd then either look on the auditors site and start seeing if there are actually ones with a 2 bed layout, and then simply seeing what and when their transfer price was on the auditors site.  If the transaction was too long ago to be relevant, you can try to extrapolate with some easily accessible economic data like inflation numbers or average rate of real estate appreciation in your area from that year until now....

Or as you eluded to if the square footage is simply less say 1500 sf for the 3 beds and 1100 for the 2 beds, you could figure a price per square foot on the 3 beds and then apply that to the 2 beds.  However, I'm not a huge fan of that because in my market 3 beds are in higher demand than 2 beds, its just a fact.  2 beds do make great rentals though...so it does take a little bit of art and knowing your market to do this.

Fantastic Deal!  My aunt is on faculty at Embry Riddle so we have visited Prescott a couple times.  Its a great town!