All Forum Posts by: Karen Margrave

The problem is YOU didn't ask nor confirm what the process would be in such a situation. Rather than ASSUMING, you should have specifically explained what the situation was, that you are a buyer and found a house on Zillow that is one of their listings, and you'd like to go see it, and make an offer. YOU should have had an agreement in writing regarding commissions, and how it would work in such a situation etc. BEFORE going to see the property, or making an offer. At the same time, the agents should have clarified what the process in such a situation would be, what commissions/fees, etc. would be, though they did send you an agreement, and apparently their terms weren't acceptable to you, therefore; they had no obligation to represent you. Yes, you can file a complaint against the real estate agent at the local board, and they may get fined. However; it will do nothing to help you get the deal done

Commissions are negotiable. Buyers have the right to negotiate price. Because of the confusion, and buyers thought they were being taken advantage of, there's recently been cases where large brokerages, and even the NAR have been sued. What's probably going to happen is that buyers will be paying commission for their side in the future, rather than the sellers paying both sides. Currently in most instances, the seller pays commissions that cover the buyers side, and sets pricing accordingly, and thus, commissions are included in overall costs, buyers don't have to add to the amount they come up with for down payment, etc. In the future, the seller may be paying their share of the commission only, meaning buyers will need to add an additional amount of cash they need to bring into the deal.

What are your numbers? How much will it cost to complete the work, and what would the ARV be? What is the value as it sits? The problem you have is that it's very hard to get a contractor to come in behind another contractor, as there's too much liability. Also, you should get lien releases from the contractor and any subcontractors that have done work on your property. How long has it been since any work has been done?

The simplest solution is to talk to the contractor. Tell him you know things happen, and ask what it would take to get things pulled back together to finish the job. If you have to put more money out for materials because he doesn't have the money to buy them, make sure you pay for the materials and have them delivered. Control your money and your job, don't rely on the contractor to do it, because obviously he can't. 

If it's not possible for him to do it, ask him for a detailed list of the work that still needs to be done, a list of the subcontractors, etc. and see if you can act as your own contractor, schedule the subs, and get the house finished. 

We live in CA, NOTHING is illegal here anymore, and if it is, it's never prosecuted. You can file a complaint with the Contractors License Board and that may help recover some of the damages.

@Kayla Givens Do you own the houses where you operate the SL homes? In one of your posts you mentioned the landlord. What is the typical rent you pay per month? How many beds per room, and how much per bed? Here in Redding, CA the sober living home that used to rent my house found a house, but it's full, and they're in need of another. The problem is, our rents here are so high, and most tenants in SL aren't able to pay more than 600-700 per bed. What's your experience there? 

@Zachary Ware What if the SL operator actually lives on site? Then basically you're talking about shared housing. How is that any different than someone renting rooms to students, seniors, etc. ?  I believe shared housing is going to become more popular, due to the lack of available housing throughout the country; and lenders, insurance, etc. will need to find ways to accommodate their use. 

Buying a property with a tenant that is in arrears was the first red flag. CA is a pro tenant state, and getting people out is extremely difficult. Most tenants not paying rent don't have the money to go rent another unit, and their credit score is probably already in the tank, therefore; offering more money to make the transition doable for them is probably the route I'd take. Standing on principle with someone that is in a desperate situation doesn't make a lot of sense. 

I've never done a Lease with an option before, but I have looked into it. You actually need 2 separate agreements. There's the Lease, and then there's the Option to Purchase. The lease spells out the terms of the lease. The Option to Purchase spells out all the details of the Option. You'll want to consult an real estate attorney so that you make sure you CYA on deposit, terms, and what happens if something doesn't work out as it should. Good luck. 

@Joe S. Zz Years ago, as a moderator on BP, I saw an uptick in the interest in STR and got BP to start a forum specific to them. BP is a REI Website dedicated to educating investors on the many niches in the market. We are where people come to learn. It's not so much bragging, as exchanging stories of success, and helping ithers wanting in. As AIRBNB became more popular along with VRBO and other sites, there was no keeping STR a secret. However, not all STR are in high demand vacation areas; and even those, have operators with less than ideal locations, amenities, etc. As with every investment, compare 🍎 to 🍎 .

You're right, Zillow isn't a good indicator of value. How old is the house? What condition is it in? What is the demand for housing like in your area? Are there a lot of rentals, or few? Are there a lot of homes for sale? What is the population of the area? What is the employment, is it broad based, or mainly service industry jobs, etc.? 

Have you looked in the classifieds, online, etc. and searched for rentals, or homes for sale in your area? Look on Realtor.com too. Do you know any local real estate agents? You want to be careful giving out the information to anyone that might want to swoop in and buy it out from under you. 

Also, if you decide to move forward, be sure to get inspections. What seems like a good deal can easily be a can of worms if there's surprise repairs. 

Where is the most demand in your area, as a Project Manager, or as a tradesperson working on jobs? It seems like there's higher paying positions for Construction Project Manager than a tradesperson, and you learn a lot more about the whole development process. 

We have done stuff in the La Pine (Remodeled from studs a MFD home), New Construction in Three Rivers (Subdivision was Oregon Water Wonderland 2) and in Sunriver, OR (a remodel). I love the area. However; prices are very high there right now, even in the outlying areas. 

I can tell you, Sunriver is 100% set up for STR. They allow guests use of the amenities, etc. with the property owners passes. They also have fractional ownership on condos, etc. so when you see outrageously low prices, that's what it is! It's a great way to get your feet wet, and learn the market there, with less risk.

La Pine is beautiful, but gets a lot more snow than the city of Bend. It's about 30-40 minute drive. There are vacation rentals there, as it's a great area for waterfalls, river, fishing, etc. However; finding cleaners, etc. may be a lot harder. 

Are you planning on building yourself? If so, it's an open book test for a contractors license. If you are planning on hiring subs, you'll need to get licensed as a Developer. They're very strict on that, and you'll get fined, even if it's your own job, and you hire subs. 

My niece is the top agent in Sunriver area at Berkshire Hathaway, @Christine Larsen. She also handles properties in La Pine, Three Rivers, etc., and would be happy to help educate you on the area. She's the one that found all the properties we did in Bend. Her son in law is a contractor, and can answer construction questions on costs, etc. if you're hiring a contractor.