All Forum Posts by: Patrick Long

Hi BP, 

I'm a CPA, Berkeley graduate, aspiring entrepreneur, professional poker player, badminton athlete, crypto-currency enthusiast -- now interested in investing in real estate! 

I stumbled upon this forum as I was browsing the net looking for like minded and useful research in learning more about real estate. I've been lurking for awhile now and finally decided to officially open an account. 

I've heard great things about this site and its community and I hope I can learn and contribute. 

Fellow investor, 

Patrick

@Ryan Landis - Here are the answers to your questions: 

1. I would guess he is expecting something around the $470K range? The best units were going for $480-500K, so my guess is that this until without any remodeling and with a dual agency discount, I'd get a better price. I'm hoping to negotiate a bit and would be happy if I could get it down to $450K or lower. 

2. He won't be able to deliver it vacant, since the old tenants are Section 8 and I believe they need a 90 notice prior to kicking them out. Also, he seems reluctant to kick them out (My guess is that they are his family friends.) and would prefer that they stay. I was thinking I could build this as leverage and negotiate a lower price. Perhaps letting them stay for longer (a year), and absorbing the negative cash flow to save on a purchase price. 

3. Good point. I will check on this with my realtor as soon as I can. 

4. Do you think it would be wise to wait for a buyer's market? I've always hear the aphorism to "buy low and sell high". Isn't buying in a seller's market terrible then? I don't have a rush to purchase or anything. I just want to make a sound investment, since it is a sizable chunk of cash. 

5. The problem is that my Realtor is talking with the Seller and Buyer and most likely will be acting in dual agency if this deal goes through. He has opinions obviously, but it's hard, since there may be conflicts of interests. (I know there are laws against this, but who knows?!)

Patrick (go bears!)

Hi all, 

I'm a newbie real estate investor. I just graduated about a year and a half from Cal and have been working since graduation. I've been saving hard for a down payment and now I think I might've stumbled across a deal and wanted to hear BP's opinion! 

Details: North SJ, near the future BART station, town home, 2BD/2.5BA - 2 master bed rooms, low HOA and well maintained, near future developments and another town home complex to be built nearby, ~1100 sq. feet, decent school district (Piedmont High School, 4/5, 10/10 on Redfin), 1 car garage and 1 carport w/a private patio, close to Target and other shopping areas, laundry downstairs and in the building. I went to the complex with my realtor and everything seems to be in good shape. The property is currently being rented out to Section 8 for $1750/month; however, market rates on CL are $2400-2500/mo.

Price: Town homes in the same complex were listed around $460K and selling around $20-30K above listing price; however, they were remolded prior to selling and staged. This property is off market and the seller is motivated (lost his job), so I hope to negotiate the price lower.

Here's the big catch on this property. The seller recently lost his job and wants to sell it dual agency so that he can save on commission costs. Because this property is off market and the seller is motivated, I think I may be able to get a good deal out of this one. I plan to live in it for a while and perhaps in a year or so rent out the entire town home to working professionals in SJ. 

I'm slightly worried because I'd be buying in a seller's market and property prices in the Bay Area have been rising so quickly the past few years (so, they might fall?). Furthermore, the property is cash flow break even, thus any gains will be in the appreciation, small rent increases in future years, and principal pay down. However, because I'm not as experienced and still young, I want my first property to be one I could potentially live in as well as have tenants that are high quality professionals that won't give me much trouble. 

It seems like the seller wants to sell this thing ASAP, since he lost his job and I want to see what BP thinks before I make a decision. If you want to see a more detailed financial breakdown of property, PM me and I can send you my Excel with all the specifics. 

Thanks, all. I really appreciated the help! 

Patrick