All Forum Posts by: Rick Albert

To be honest if you can't rely on your agent, then you need to find someone else. 

A solid agent will understand that there is a financial gain, but this is a relationship, so if it isn't the right deal, they can be honest with you and you are more likely to use them again and refer. I've told clients not to sell before, and then a few years later we put it on the market. I've closed three deals with him and he referred me to someone where I closed another three deals. 

I've heard mixed things on Section 8. One thing to keep in mind is it is my understanding (you would need to verify) that you get one shot per year to increase rents, but they can say no. That means you may not be keeping up with inflation. 

Rent backs are super common. There is specific California Association of Realtors forms for those staying 29 days. That is key and would recommend going that route.

The problem is there isn't enough information and everyone uses different metrics to determine a "deal."

1) What's the condition?

2) Rent controlled? That plays a role.

3) Where this gets complicated is you are doing commercial financing. It is 6.6% today, but who knows in five years. You have to account for that.

4) This is all about the rental numbers, and if this is subject to rent control, right now the max you can raise rent is 4%. With insurance costs going up, construction, etc., 5% might actually be high in your estimation. 

There are so many things that it just depends. Maybe these questions can help get you where you want to be:

What is going to make the process so smooth that he can't resist? 

What are any pain points that he has that you can help with? 

At the end of the day, no one really cares about the price, they care about the net. What can you do to increase the dollar amount in his pocket? For example a quick close to lower his carrying costs, paying his closing fees, etc.

He is right, it is all about intention. This is technically your primary residence. 

On a practical basis, I've never heard of a lender doing drive bys after the close of escrow to make sure you are still there. If you never lived in the property but got a primary loan, then that is considered mortgage fraud. Talk to your lender to get clarity.

It's all about making the numbers work. I used HELOCs twice now but with the house hacking strategy. 

STR is becoming a difficult strategy because there are so many costs (furniture maintenance, utilities, internet, etc.) that you have to factor in and if you are in an oversaturated market, then unless your property is unique, you can only compete on price.

Bruce is right, there are a lot of variables. Also what do you mean by template? Do you mean plans, budget, both?

I don't always trust appraisals when it comes to value. Not because they do a bad job, but their focus is to be as objective as possible in a subjective industry. I would look hard at the comps to see what makes sense.

From there, I look at the cost of vacancy. If it costs you $5K in turnover (renovate, vacancy, etc.) and divide by the difference, see if it makes sense to you. Maybe there is a compromise of somewhere in between. Vacancy sucks.

It will also come down to what's available. Some tenants might be for it if they don't have a choice. Others may push back and give you a bad rap (tenants talk).

The last thing is look into state and local laws to see if you can even raise rent by that much.

Again, it all depends. It doesn't hurt to interview a couple of full service Realtors and see if there is a difference. There may not be a difference. 

If it is vacant, and you feel that your agent is representing you to the best of their ability, then it is price.

There are two reasons why a property does not sell: Price or the Agent (aka Marketing and Negotiations).

The property has a tenant in place and I'm assuming the tenant has to stay. Therefore your only option is to sell to investors. If it were vacant, you would have a larger pool of buyers. 

Because you are selling an investment property, it comes down to the numbers and therefore the price. I can't speak for all investors, but I know I have become more conservative with the rising cost of construction, interest rates, insurance costs, and vacancy hold outs. 

I also see you are listing with a discount broker. With discount brokers come discounted services. In the past I have taken over a listing that was previously listed with a discount broker and not only did I get multiple offers, I sold it higher than what it was listed for, which compensated for the difference. Representing buyers I have gotten some of the best deals when I'm negotiating with a discount broker. Just earlier this year I got my buyer below list price, a large credit towards closing costs, and it appraised for higher. The listing agent was a discount broker.