All Forum Posts by: Tchaka Owen

@David Michael - there's something not correct with your numbers....and it's very likely that the as-is value is actually higher than $220k.

Here's my suggestion: stay at $250k. 

If they're asking too much, no one will buy and they'll drop and/or call you.

If they're correct, someone else will buy it at a higher price. 

Good luck!

Which one filled an application first?

That's the only line that matters in your post. Simple question: what is your justification for purchasing a home at $30k above its value?

You ask a very good question. The best answer I can give is this: our income is derived from averaging out the various deals we do and that's ok. Imagine going to the $150k buyer and requesting 8% because it's not as expensive as a $400k one. You wouldn't like that if you were the buyer, would you? Quite frankly, there's no knowing how difficult a transaction may be...sometimes it's fast and easy, other times it's a royal pain. And often it isn't cost dependent on home price. Then there are the deals that fall through and an agent gets nothing for the time and effort. If I am able to find a way to get that $400k purchase down to $395k, will you still be concerned that I'm getting 3%? Will you pass some of the savings to me? Rather than worry about what an agent is earning every single transaction, look for someone to do a good job for you. That would apply to property management as well. 

It's not unusual to have new entries into FL who do not have SSNs. Here's what I suggest:

1. Contact the HOA and find out what criteria they request when they encounter such tenants (and/or buyers).

2. Lookup his company to see if it's legit. www.sunbiz.org is the site.

3. Ask for copy of resident or work visa - he must have that if he's in the US.

4. If he's willing to pay 6 months upfront, he's probably legit. BUT....I'd rather you take 6 months upfront AND 2 months security deposit. 

Good luck! 

No skin in the game because the software is free? Or is it the lockboxes and MLS that are free? Payroll? Help us understand.

@Manasseh Arnold - yeah, that's an arbitrary number and it probably is because it's your first home purchase. My first was $131k, yet most first time buyers in my home area are likely spending $400k and up. Remember that it's all about the final numbers, not just purchase price. If you find an awesome SFH for $150k that you lived in by yourself, your income would be $0/month. If you spend $500k on a quad with each tenant paying $1500/mo, your gross income would be $4500/mo. The net would likely be around $2500-3000. That's probably enough to pay your mortgage and allowing you to live free in the 4th unit. Hope that helps.

@Manasseh Arnold - go with the best deal. It doesn't matter if it's a 2-, 3- or 4-unit. Yes, it is more likely that a 4-unit will have the most financial security however you're better off with a duplex in a solid area than with a 4-plex in a not-so-desirable neighborhood. You will come out ahead with good, solid tenants. 
Also, be sure to save some money. Yes, you have the advantage of 0% down, however you want reserves to be able to do repairs.....in fact, your best deals will be with homes that need a little love. Better to get a $10-20k reduction with you spending $5k to make it look better. Good luck!

@Javier G. - your findings are spot on. In fact, I would generally avoid most multi-units in South Florida unless YOU are the procuring buyer. As the market recovered, multi-units became a premium.....by 2016 they weren't as good a buy as most SFHs. Around 2011 we saw a place in Pimpano (just over 100 doors) for about $10-11k per door. Good luck finding that for under $80k/door today. We picked up a huge duplex in Dania for $110k at the end of 2011 and sold it in 2016 for a sliver under $300k. Rents did go up a little, but not 200%! Not only are prices extreme today, most wholesalers (or sellers) exaggerate rents in order to make the prices look good. They also market "non-conforming" properties, ie, a duplex that was once with a 2/2 on each side is now a 4-plex consisting of 2 2/1s and 2 efficiencies. It wasn't done legally, so it still shows as a duplex yet numbers are run as a quad. You'll see a lot of that across Hollywood. My advice: go for the best deals you can find. If that's a SFH, fine. Look at some THs too. But unless you are direct to owner of multi-units, you're likely wasting your time.

Lastly, we don't know how things will turn out with Covid-19. What we do know is that S.Florida is one of the worst markets as far as rent vs. income. So if jobs are lost, there could be a negative impact on rents. Better to take the safe route. Good luck!  

@Avril George - I agree with @Rick Pozos that you should offer a nice piece of equity to bring a partner on board. However, I (strongly) disagree with deeding the property to said person and his equity partner. It's ok to ADD them, but not give up your rights to it. If that's a deal-breaker, move on....there are many people out there with money. You just have to locate them. Good luck!