All Forum Posts by: William C.

Regarding the whole Tracy D. Privileged thing. I read the whole thread and not once did anyone point out that OP actually made that same assumption she eluded to, that his wife has masters the art of the deal? I mean really. It's the internet, so our words done have a tone. But the way I read her comment , was basically agreeing with what he thought might be the OTHER reason the test worked, and that in fact his wife was good, or at the very least adequate enough at dealing with lenders therefore it wasn't discrimination. I just wondered how no one else caught that. Anyway, as most have said, it exists out there. But for one, have your wife do the talking if it's working. Or 2, don't most conversations start on the phone where skin color would not even be an issue? Maybe you won't like my answer but basically I'm saying yea you might be right. Your being discriminated against. Now what. Work around it. Network harder. Find lenders if your same race. I'm not saying what's happening is right, in fact it's def wrong, but what I am saying is your probably have little chance in changing it, so you might as well focus your energy on how you are going to succeed, rather than dwell on the reasons you are not succeeding. Read Grant Cardones 10x or Be obsessed or Be average. He talks about excuses. It really resonates big time. Not matter what, we all have "excuses" as to why something is happening or not happening but in reality we can control it. The excuses just make us feel better about why we couldn't get it done. We could talk about it all day long, bring light to the situation, have legislation passed, but in the end nothing will change the minds of those folks you might be talking about so all of that won't ever help any one to succeed. Your probably thinking that's easy for me to say right. But I know for a fact their are people of all shapes, sizes,races, gender and sexuality that started with nothing and made it big, and they faced discrimination all along the way but rather than stop and talk about it or ask others if it's happening or thinking of ways of changing others minds, they instead just kept on finding a way to make it happen.

I'm just seeing your post about his text. Honestly, it probably more about the location of the property than the amount of money. Notice he said, I'm not going to XYZ....and he directed you to the listing agent. Probably not how I would have worded the response, but exactly the same thing I would have done. He even said "no offense". So he wasn't trying to offend you, which he obviously did, he just knows it would have been a poor use of his time. Were you going to pay cash? $200/month cash flow is a bit slime in my opinion given the class of the neighborhood (according to the price range) and the type of tenants class you would be dealing with. One bad turnover and your cash flow for 5 years is wiped out. My advice as your realtor would have been to stick to the plan and stay away from war zones. But your market might be different than mine. Homes that sell for less than a car in my market are located in areas I wouldn't even like to pass through, let alone get out of my car and walk through a vacant building, again regardless of the payoff in the end.

Can we confirm with OP that the agents actual words in response to the showing request were "I'm not showing your this house for only a $500 commission" I don't doubt the agent was avoiding the showing, I just find it hard to believe it was delivered in that exact fashion. Someone mentioned it above. The agent has the right to spend his time wisely, and there are much better ways he could have handled it like calling the listing agent, calling ANY agent and referring it, or having someone else on his team or office show it for a piece of the pie. One other quick question. Was the price around $20k? Do you have have the cash to close or did you plan on financing or? Was it in a war zone? Honestly id refuse to show houses in some areas based on my safety alone forget about what the commission would be. And I don't know of a lender who would do a $20k loan so it's cash only and I can't tell you how many times Iv had buyers think oh look a $20k house, I only need $4k down and My payment will only be $100/month. It doesn't work that way in my market at least. He should have handled it differently, but you also have plenty of options to get the deal done without him. And depending on some of the questions above he may have had every right to deny the showing. Hopefully you can shed some more light on how it went down.

@Jimmy Ho you are clearly mistaken regarding the appraiser vs real estate agent situation.   You said the bank uses a licensed appraiser for a reason,  well for one in most cases a law requires it, the other is the bank wants an unbiased 3rd party opinion, meaning someone with no skin in the game at all.  "Licensing" to be an appraiser is no indication of being able to value a property.   Sometimes buyers are willing to pay more than it's worth for some reason, that's where the appraiser comes in, to prevent a bank lending more money than it's actually worth.   So it has nothing to do with them being better at valuating property, it's the law to have it be unbiased.  Not to mention most appraisers I meet are also agents.  There's a good chance the appraiser you used also has a license to sell real estate as well. 

With all that said it's not very hard to get a general idea what your home is worth.  Hiring an appraiser to find out what your Home is worth is a waste of money in my opinion.   You can start with your Zestimate and go up or down depending on Condition and other intangibles that zillow wouldn't know about.  Then find out what your neighbors are selling for and you should be pretty close.

Getting an appraisal to find the value is like pulling the cart before the horse.  The market determines the value, then an appraisal is used to support that value, or not.  How about a show of hands from anyone who purchased a property well below market value, yet magically the appraisal lands right on that same price you and the seller agreed to?  It's not magic, it's the purpose of the appraisal, to support the value the market determined, not the other way around.

Anyway I didn't mean for such a long post but I hope it helps anyone who may have had the same misconception that appraisers can determine what a Home is worth. They cannot.  The market does.  They can only provide data to support it, or maybe not.  Iv lost count of the times Iv had sellers list their home for X ($100k) and it fails to sell for 5-6 months so they decide to refinance instead and the appraisal comes back at Y ($120k).   

To answer your origanal question though, If it would actually sell for $370k, I would sell out immediatly and sit on your cash waiting for the bubble to burst in your market.  A market doubling in 2 years is just silly, and cannot continue at that pace.

@Thomas S. so true.  I'm guilty of the paper cash flow vs real cash flow.  I was projecting a net cash flow of $2000 on our latest triplex once we stabilized.  I couldn't believe the money I would be making....well capex, vacancy, repairs, management  etc etc cut that number in half! I'm still happy with my returns at $1000, but I'm just lucky I didn't even buy those deals I thought would churn out $1000 a month when in reality they would be break even at best.

That's also just the "credit check fee". Are there other paragraphs that talk about application fees, or background checks or anything else? That's a really awful law to prevent landlords from recouping costs. Then again, credit reports are free these days through many places like credit karma, discover, etc..

Just to be clear the agent isn't the one lowering the price, the market is. If a Home isn't selling in today's market, it's over priced, simple as that. The agent can't lower then price without your approval. So again regarding your original statement, if they have to lower the price to a point where the Home will sell and you make barely any profit, you ran the numbers wrong and it's your fault you made no profit, not the agents. Agents don't sell homes, price does. We manage the process, shelter you from liability, and good ones will be able to negotiate a deal that will at the very least pay for the commission if not more. Chances are if you list with a flat fee service you'll end up paying 2.5-3% to a buyers agent. So your only actually saving 2.5-3%. Good luck. Like I said a good agent will easily make it well worth the 2.5% so you are not sued, holding worthless open houses, and pulling your hair out by the end of the deal.

Short sale?

Your doing it wrong if your showing property to one person at a time. Are they even qualified to rent it? Can they move in now or in 6 months when their lease is up? You'll drive yourself nuts showing rentals one potential tenant at a time. I hold 1-2 hour open houses and invite the 20-30 people who have called and emailed my listing. 10 show up, 5 fill out an app, 2 are qualified and I choose the one with the highest credit score and most money in the bank.

Mike Fletcher hit the nail on the head. Anything under 5 units will fall into the comps approach. I was "burnt" by this fact in my latest BRRRR when the "comps" the appraiser used were run down duplexes grossing $2000/ month and mine building is a completely renovated triplex grossing $4300/month. I was given a generous $20,000 adjustment because I had an extra unit, but that extra unit just happens to rent for $2000 month. So to say the least the comp approach failed to show the true value of the Home and we were forced to leave some equity in the home. The income approach came back at $450k and comp at $300k. We were able to negotiate a higher LTV given the high cash flow, so that helped, but it was a lesson learned. Don't assume the appraiser will adjust for condition and of higher rents. I'll probably also look for a 5+ unit if I were going to do it again. Or buy better and spend less on renovations.