All Forum Posts by: Steve Milford

@Kar Sun I see the issue is really that your tenant-landlord relationship is no longer a business relationship. You care too much about your tenant's "reasons". Who cares. I don't care if my tenant paints the walls pink if that makes them feel better, just pay the stated rent.

When the cost of doing business increases, your price should increase. That's it. All this banter back and forth is just a waste.

When my costs increase, I raise rent by same percentage. It just is.

I am assuming you screened the guy well in the first place, after that, why would you care what income he has? Likewise, if he loses his job he still has to pay rent.

I personally would rather charge a little less than market rate, as I receive less squeaks but that doesn't mean I don't raise rent though. It is still a business.

I would look at the place where it is listed and look up the rental code in the area, to find limitations you might have. I.e. In my area, with multi-family duplexes, the landlord is responsible for water, sewer, and garbage. Also, your mortgage will grow over time with taxes. 

I did a cursory search in the area based on feedback received already. I came up with 157 Summer Street, Hartford, VT 05001 @ $359,000. If so, my comp algorithm says $350,480, 6 bd, 4 ba, 2,262 sqft, 8,712 sqft. Been on the market 73 days. Originally listed @ $395,000. If I was your Realtor, I would ask that you get to see the finances of the duplex so far, i.e. if tenants are actually paying rent on time, the current status of the leases, etc. Just because there are leases in place, that doesn't mean the tenants are paying. Also, what do the disclosures look like?   Plus, since the Buyers have dropped out of the market, at least where I am at, is that the same in this area? If so, you might have some negotiating room. I also see a competitor's home, which is smaller across the street. What is the difference between the two homes? 

My thing is, numbers are just numbers. It helps to know the story and to see if the numbers make sense. Sometimes they do, and sometimes they don't.

@Juliet Palfi Buy what you want, not what a future renter wants. If you're there 2 or 10 years, when the time comes, you will figure out whether it is beyter to keep and rent out or better to just sell it. If the view appeals to you go for it. As a future rental, you'll never know if a future tenant loves the view until they say they do. There is no way to be 100% sure about anything, so go with your gut. If your gut is wrong, learn from it and go again.

What Grant said. 

I would suggest replacing the word "house-hacking" with "roommates". You take on roommates to help pay the mortgage so your out-of-pocket is smaller than you would have to pay by yourself. Not really a new concept at all. 

Everyone has different philosophies or perspectives. You might not get the best cash flow right away, but with a higher than average appreciation in the PDX area, you will win on the equity value versus comps over time. 

I tell clients to look at it from a "one-year from now" perspective. Yes, it might be a struggle to buy today with some challenges. But if one year from now will you have kicked yourself for not buying it? This is more about being ok with your decision. In a way, the high appreciation is really to blame for our thinking of the Portland market. But if you think about necessity, then the scenario changes. If you have to live somewhere and you want the mortgage/rent to stay the same long-term, then buy and get those roommates in.

The last property I bought cause I needed a place to live. Then life happened, I moved, and then I converted my house to long-term rental. First-year was a wash. Each additional year gets a little better. Thinking about it, my costs go up minimally, so if rent grows similar to the market it is a win. And then when I add in appreciation, now those comps are numbers I like to see! Lol.

@Simon Obas Your first two to three sentences crack me up.

#1 It is only a Seller's market for the bottom 25% of the market or if the the home is put onto the market for a little less than comps which encourages buyers to go into a feeding frenzy. The Seller's market we knew even two months ago is OVER!!!

I have buyers offering below asking and getting it.

I also have Sellers that tell me, "here is the price I want." I laugh and tell them they are in fantasyland. If they want to list at "their" price I am still willing to, but it will sit and rot. Anyone worth their weight in salt knows that Zillow comps are crap, and Redfin comps are same.

When I list, no matter what price I put on Redfin, their estimate is usually up to $5,000 less instantly. Zillow it takes a few days for their model to "catch" the list price, but it always does lol.

You are over the jumbo limit and there are just few buyers in this price range, it doesn't matter how good the marketing is, if it is over-priced per others, it is still over-priced.

I had a cranky seller like you two months ago, they tried to me my marketing was crap. I allowed them to redo the marketing and followed advice to the letter of a "marketing expert" from another firm they hired. Yet, they wouldn't reduce price. I actually got more showings before I was encouraged to follow the "expert." Cracks me up!

Look up mortgage application volume, it is in the toilet. Buyers are dropping off like flies.

IMO, find a short-term solution like renting for 18 mo if you can get it or reduce price to comps to unload it. Or be patient....

You should do what makes you feel most comfortable. 

As Frank pointed out, all investments have risks and some more than others. Also, there are fluctuations in the general market. When I see the whole stock market go down, I don't worry too much about my own investments as I know that they will bounce back, it is only a matter of time. It is not a guarantee, but it is a high likelihood. Yet, if I have dogs in my portfolio, those need to be discarded. We look in the past for trends to predict the future, although it doesn't always work. This dates me, but who knew Enron was going to go belly up? As I study those that are wealthy, they often make more money during bad times versus good. So we just need to recognize that there are cycles in business for both real estate AND other investments, up and down. I just looked at some bigger tech stocks and the only ones that I can see worth holding are Microsoft and Apple since these are trending up from when you bought. The others are trending down from when you bought. The caveat is that once you sell, you "lock in" your losses. It's a gamble, but it is what it is. I suggest going and talking with a financial advisor or someone that trades in stocks and learning about stop-losses and that kind of stuff to protect your wins. 

Regarding real estate property, I am itching to buy more, but will wait a little bit more as I think prices will continue to get softer in the next 12 months in my opinion. 

This forum is a way to discuss possibilities of real estate primarily, but you ultimately are responsible for making your own decisions. We are offering opinions, not what you "should" do. And everyone has different opinions.

@Kevin Sillah 1) Projecting low rehab costs is a problem of many first-time investors, it doesn't matter if on- or off-market. 2) Wholesaling without a real estate license is illegal in many areas, do you due diligence. 3) The link you offered says this is a cash only deal, that means a close in 2 weeks +/-, and they are probably going to want to see proof of funds. I would anyways. That doesn't allow for much time to pitch to other investors. 4) Multiple offers received already, so probably not going to pick an offer with "subject to" in the buyer line. 5) Aside from all that, if you bought and found yourself holding onto gor whatever reason, is it the best use of your money? I personally wouldn't want something that doesn't cash flow right away or asap.

@Jonathan Dagerath Without any other info, your rent is too high for the value. If people come and look and don't see the value, they aren't going to rent just because you think it should.

@Lilly Olabre only you can decide if it's worth taking a hit of $60k now versus losing a few hundred a month.

Personally I would hold onto it and maximize rent for a few years. Homes aren't selling now cause many Buyer's are just choosing to "wait and see" and continuing to rent. Much of the Buyer demand essentially went poof in one month.

Like others have said, this offer is just the start, they may find lots of things wrong with it to drop price more.

@Jimena Tuis It all comes back to what you want. If you really want the house and don't want to lose out then run with highest price. As they countered, that created a new offer that you don't have to accept. This is also how the escalated clause is dealt with in many areas.y Ask your agent to contact them and find out about competing offers. If there aren't really any then the Seller is just trying to get you to commit to higher price. The max on your offer letter is really moot as no one wants to pay more for a house than necessary. Just because you could offer a higher price doesn't mean you will. I've had Seller's agents tell me,"You Buyer's wouldn't win the competition."

Personally I would let this counter fade into the sunset. I believe in the power of walking away and if it is not meant to be, it is not meant to be. The market has shifted. Buyers are dropping out of the market like crazy. Wait a weekend like they are threatening, and see what happens.

I had a Buyer that was looking hard a few weeks ago. We submitted an offer on a house it was accepted, then after inspection, the Seller told us they wouldn't do $1,000 worth of repairs on a $525k house. So my Buyer's termed, because it was about principle. Then we went shopping again. In the next few days, we submitted six more offers on multiple houses on varying days. On three we were told point blank that the offers weren't high enough. Buyers didn't feel like increaing. On two others we were told that it was a multiple offer situation, and we weren't high enough. Same deal, Buyers didn't feel like getting into a bidding war. On the last, Buyer's offered current list (which was $40k less than original list), and it was accepted. A few days after this offer accepted, the very first Seller, which we were in contract with originally, stated he would fix whatever Buyer's wanted lol. My Buyers weren't interested. That one is still on the market. Plus three agents from previous offers called and told me their previously chosen offers were failing - so they wanted to know if my Buyers were still interested. This is the new trend in my market, Buyer commitment is waning, but Sellers are still in fantasy land thinking their house is "the one" and that Buyers will "fight" for it. Just look at market DOM, it is increasing rapidly for many homes. Any Sellers where DOM = 2 weeks are desperate for a Buyer. Go shop those homes, there is nothing wrong with them, there just isn't as many buyers as there was a month ago.