All Forum Posts by: Edward Peugh

@Mark DiGioia some might, I don't.  Once the offer is accepted your attorney or title company will do a title search.  At that time issues like this should be identified.  

These taxes are the responsibility of the seller, so in most cases they will simply take home less money.  However if it means that they will have to bring money to the closing, then you will need to work this issue out.

Good Luck! 

Ed

@Max T. great job engaging the tenant in a positive way.  This enabled you to convert this unit while the tenant was still in place!  Great work!

@Albert Smolinski you don't really "set" rent.  Rent is established by the "market" (or what people are willing to pay in a given market for a specific property).  What you can do is properly position your property by Features, Location, and Condition to maximize the amount you can charge.  

I think your question should be asking is "how can I ensure that I am charging market rent?".  This is accomplished by sampling and testing the market.  What rents have others received in the market?  There are websites that can share this information with you (just google "market rent" or something like that..)

Otherwise, you can tell simply by the amount of interest you are receiving in the property.  Too much interest you are priced too low, too little interest you are priced too high.

Hope that helps!  Good Luck!

Ed

@Edward Hayes I think you would benefit from developing sources for off-market properties. 

I use to data-scrap the local MLS and I had a program that would assign values to every property. What I found was that 80% of properties that were priced properly for investment purposes (buy/hold or fix/flip) would be under contract in 3 days. We prefer now to operate in an environment where there is less competition, and as such better values.

This is only compounded by the short supply that is now present in our market.

Ed

@Edward Hayes We continue to find a number of opportunities (In fact we walk away from quite a few based on bandwidth).  Both for Fix/Flip or Buy/Hold, many are subject to.

My suggestion would be to expand your networking opportunities. 

What are you doing every week /month to expand your circle?  I try and make a habit of reaching out to a new Meetup group or other local real estate club at least once a month.

There are some great groups in the Metro Area.

Ed

Yup. You got it. Again just focus on the Cap Rate, verse ARV vs. Purchase Price Delta. I would be happy to help with the analysis if you like.

@Julie Marquez there isn't really a mechanical difference caused by having tenants. 

You will have to mange showings a little differently (an open house style will be better than individual showings, so you don't disturb the tenants much)  

Your target market will be investors verse home buyers.

And as a result you will lead your marketing efforts with Cap Rate and less of a focus on Delta between Purchase and ARV.

We use a term "Turnkey Rental" when marketing something like this.  I am happy to help with the analysis if you like.

Ed

@Donald Beamon No Problem.  Good Luck!

A couple of thoughts on being an owner occupant.  First, when you move someone in next door, tell them you are the "Site Manager" not the owner.  This will give you the ability to give the answer to various requests of, "let me check with the owners".

Second, even though both units will need to be updated delay "cosmetic" repairs to your unit until you are ready to move out.  Focus any given rehabs to the unit that will generate cash for you.  After all if you have to look at an orange countertop or green carpets for a little while, you will be ok.  your tenants may not be as patient.

Once again, Good Luck.

Ed

Yeah, so considering that I think (if my assumptions are right) that you then end up somewhere around 4.9% Net return before Maintenance and Management Expenses (Even if you don't actually pay this, your time is worth something).  This is surly why you are feeling so constrained from a cash perspective.  You probably feel pretty good when the tenants don't have issues, but as soon as they do, it will remove all of your profit in a given month.

I still think liquidating one or some of these properties, might help you reposition at a better rate of return. When I have been in this situation I have listed a property (on MLS/or not), just to see if there is any interest.

I wish you all the luck!

Thanks,

Ed