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On 12/7/2018 at 2:49 AM, Mike Anderson said:

So glad this thread is still alive.

I am up to 300+ units,  A 50 unit apartment building, and 200+ units simple walking distance from my back door.  Quality infrastructure, although I am losing my office manager.  What a different life compared to when I first posted here. 

How the hell much money does a 50 unit building cost?

On a side note, anyone else feel like property taxes are getting out of hand?

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On 3/15/2019 at 1:54 PM, Getzlaf15 said:

Oh fun,  it's going to be another crazy summer.  

House went on the market for $174,900.  Thursday at 9am.

At 11am, we are at the house and a line of four other agents with clients.

At 12:30pm, we send over offer at $183,000.

And just now, I find out we finished 4th out of 19 offers.  Two came in at $190.

So much fun!

I have never heard of anything like this near where I live.

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On 3/16/2019 at 8:05 AM, Random said:

Got a little over 11K in it and its listed fsbo for 115.  Probably going to talk to a realtor about listing it soon.

 

We also had a long term tenant move out of one of nicer sfh, so we are going to remodel and sell that one too.

 

Hoping to keep the flipping thing going as long as we can pick up decent places cheap.  I've swung and missed on two in the past few weeks.

wow - houses like that in Sidney are going for $100 SF?  I thought they would be a lot lower.  The entire Dayton, OH area seems like it has become so devalued.  

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23 hours ago, Binky The Doormat said:

wow - houses like that in Sidney are going for $100 SF?  I thought they would be a lot lower.  The entire Dayton, OH area seems like it has become so devalued.  

Its under contract at 109.  The thing is, the inventory is very very low.  Only 4 active listings between 100-115 at the time we listed it.  The other 3 needed work and/or were only 2 bed.  Sub 120s are going fast.  We're getting another one ready to list soon.

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2 minutes ago, Random said:

Its under contract at 109.  The thing is, the inventory is very very low.  Only 4 active listings between 100-115 at the time we listed it.  The other 3 needed work and/or were only 2 bed.  Sub 120s are going fast.  We're getting another one ready to list soon.

:thumbup:

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1 hour ago, Rodrigo Duterte said:

What's a decent rate for a realtor?  Not trying to grind him/her, but also not gonna pay 2% on a home over 5MM.

Everything is negotiable but there are norms in each region. Not sure how/if it varies as price increases ($5mm). While you don’t want to pay 2% to list, there is probably something like 3% to the buying agent/broker. 

Edited by Phil Elliott
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1 hour ago, Rodrigo Duterte said:

What's a decent rate for a realtor?  Not trying to grind him/her, but also not gonna pay 2% on a home over 5MM.

best worst humble brag of the year nomination.  

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2 hours ago, Rodrigo Duterte said:

What's a decent rate for a realtor?  Not trying to grind him/her, but also not gonna pay 2% on a home over 5MM.

Just checked in Huntington Beach where I live, and on the 27 homes listed over $3M, the buyer side is getting 2.5% on 25 of them.  Doubt the listing agent is taking less than 1.5% (since they all paint themselves as "high-end"), so despite the high price looks like you are the typical 4-5%.    

Are you in California?  If so, I could probably give you more area specific info, but HB is probably typical.

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1 hour ago, Binky The Doormat said:

best worst humble brag of the year nomination.  

Chet says, "hold my beer!"

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Ideas on places to purchase a vacation property?  We're very open to location but would like to find something that will cash flow as a str that we might use a few times a year.  Nothing high dollar, maybe 200K tops.

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Looking for articles/information/data that support a remods or rebuilds over simply selling a property as-is.  I realize it all depends on the situation but in this case (a 25 year old house in a great location), I'm fairly certain knocking it down, or at the very least doing a remod, would benefit the seller most.  Yes, that is a long, tedious process but all I care about is maximizing value.

It seems to me that sellers who re-develop a site, almost always get the most out of their property.  Recessions notwithstanding.

Any links, or even books, that support this narrative would be much appreciated.  Thanks.

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On 6/4/2019 at 7:00 AM, Random said:

Ideas on places to purchase a vacation property?  We're very open to location but would like to find something that will cash flow as a str that we might use a few times a year.  Nothing high dollar, maybe 200K tops.

Dayton?

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On 6/12/2019 at 6:41 PM, Sand said:

Dayton?

Not sure I'm with you here.  People vacation to Dayton?  Or it has a good vrbo market?

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OK I need some investment property expertise here.

My wife and I are looking for an investment property to rent via airbnb/vrbo in a place we like to vacation.

We found a 3 br/2 ba condo in an area we like that we believe to be growing and appears to rent well.  It is only $199,000 and we found the two condos next door (which are very similar and are the same size) on vrbo.  Those 2 condos are renting for $150/night and are each booked out for at least 10 days per month over each of the next 3 months in what is not high season there. 

HOA fees are $133/mo.  It comes fully furnished, nice condo complex with pool, workout room, etc.

So I guess my question here would be how the heck do I figure out what the catch is here?  It seems like this thing is turn-key and set to make money or at least cover the mortgage right out of the gates from day 1.  So why would anyone in their right mind be selling it if that's the case?

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1 hour ago, FreeBaGeL said:

OK I need some investment property expertise here.

My wife and I are looking for an investment property to rent via airbnb/vrbo in a place we like to vacation.

We found a 3 br/2 ba condo in an area we like that we believe to be growing and appears to rent well.  It is only $199,000 and we found the two condos next door (which are very similar and are the same size) on vrbo.  Those 2 condos are renting for $150/night and are each booked out for at least 10 days per month over each of the next 3 months in what is not high season there. 

HOA fees are $133/mo.  It comes fully furnished, nice condo complex with pool, workout room, etc.

So I guess my question here would be how the heck do I figure out what the catch is here?  It seems like this thing is turn-key and set to make money or at least cover the mortgage right out of the gates from day 1.  So why would anyone in their right mind be selling it if that's the case?

I'm closing on the sale of one of my three ABB's in the morning.  Change of strategy.  People sell for different reasons.  My best advice is to not do an ABB unless you put at least 50% down. They are too much work to have thin margins.   Also check to see if there are any CCR and/or area restrictions on ABB's.

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8 hours ago, FreeBaGeL said:

OK I need some investment property expertise here.

My wife and I are looking for an investment property to rent via airbnb/vrbo in a place we like to vacation.

We found a 3 br/2 ba condo in an area we like that we believe to be growing and appears to rent well.  It is only $199,000 and we found the two condos next door (which are very similar and are the same size) on vrbo.  Those 2 condos are renting for $150/night and are each booked out for at least 10 days per month over each of the next 3 months in what is not high season there. 

HOA fees are $133/mo.  It comes fully furnished, nice condo complex with pool, workout room, etc.

So I guess my question here would be how the heck do I figure out what the catch is here?  It seems like this thing is turn-key and set to make money or at least cover the mortgage right out of the gates from day 1.  So why would anyone in their right mind be selling it if that's the case?

Make sure you check the association docs and that there are no rules against short term rentals. I realize the condos next door are renting out, but still check just to make sure. 

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On 7/30/2019 at 11:15 PM, FreeBaGeL said:

OK I need some investment property expertise here.

My wife and I are looking for an investment property to rent via airbnb/vrbo in a place we like to vacation.

We found a 3 br/2 ba condo in an area we like that we believe to be growing and appears to rent well.  It is only $199,000 and we found the two condos next door (which are very similar and are the same size) on vrbo.  Those 2 condos are renting for $150/night and are each booked out for at least 10 days per month over each of the next 3 months in what is not high season there. 

HOA fees are $133/mo.  It comes fully furnished, nice condo complex with pool, workout room, etc.

So I guess my question here would be how the heck do I figure out what the catch is here?  It seems like this thing is turn-key and set to make money or at least cover the mortgage right out of the gates from day 1.  So why would anyone in their right mind be selling it if that's the case?

Mind sharing where this is?

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On 7/31/2019 at 1:04 AM, Getzlaf15 said:

I'm closing on the sale of one of my three ABB's in the morning.  Change of strategy.  People sell for different reasons.  My best advice is to not do an ABB unless you put at least 50% down. They are too much work to have thin margins.   Also check to see if there are any CCR and/or area restrictions on ABB's.

What?  You're getting out of the ABBs?  Would be curious to why as this is what we are considering getting into once prices relax.

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2 minutes ago, Random said:

What?  You're getting out of the ABBs?  Would be curious to why as this is what we are considering getting into once prices relax.

didn't put enough down.

Repairs... they have to be done the second they happen.  That sometimes comes at a higher cost then normal.  Had a minor water leak yesterday.

From others doing it.... best way...  pay all cash.  have a mgmt company do everything (cleaning, laundry, etc) for 22%.  Make an amazing return they way without any of the headache.   We have new cleaners that do a solid job, but we catch them not doing an item or restocking often.  Can hurt your ratings..

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Do you mean you're over-leveraged on them? 

You've mentioned a few times recently that you can make anything profitable by putting more down, but I dont really agree with this.  Cash has an opportunity cost (call it 8%-10% or whatever) and this is why we are selling a few of our rentals.  One that we paid cash for, the other has a small loan (the first one we bought).  The cash is more valuable than the rent.  One sold for 105 would've rented for 750-800 (gross rent<8%).  The other about 115 would've rented for 850-900 (about 9% gross rents).  Long term market returns are about this and I don't have to worry about repairs or collecting rent.  We'll keep the $80K properties (mostly duplexes) that pull in 1200+/mo.

I am very hesitant to move forward on the VRBOs because of this.  I've yet to find a single one that will make money on paper once you factor in opportunity cost, mgmt fees, hoa fees, and maint fees.

 

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1 minute ago, Random said:

Do you mean you're over-leveraged on them? 

You've mentioned a few times recently that you can make anything profitable by putting more down, but I dont really agree with this.  Cash has an opportunity cost (call it 8%-10% or whatever) and this is why we are selling a few of our rentals.  One that we paid cash for, the other has a small loan (the first one we bought).  The cash is more valuable than the rent.  One sold for 105 would've rented for 750-800 (gross rent<8%).  The other about 115 would've rented for 850-900 (about 9% gross rents).  Long term market returns are about this and I don't have to worry about repairs or collecting rent.  We'll keep the $80K properties (mostly duplexes) that pull in 1200+/mo.

I am very hesitant to move forward on the VRBOs because of this.  I've yet to find a single one that will make money on paper once you factor in opportunity cost, mgmt fees, hoa fees, and maint fees.

 

yes, we only put 25% down.     I would never buy one with an HOA or a lot of hotels in the area.  Communities are slapping restrictions on these all the time.

We booked an ABB on Oahu 12/14-12/22.    We were just told an ordinance was passed on Oahu (maybe all of hawaii) that an ABB/VRBO owner can only have one booking in a 30-day period.  This was passed after we booked.  We were lucky to not lose our booking.

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On 6/4/2019 at 7:00 AM, Random said:

Ideas on places to purchase a vacation property?  We're very open to location but would like to find something that will cash flow as a str that we might use a few times a year.  Nothing high dollar, maybe 200K tops.

238 ft. of beautiful lake frontage and ~ 1.45 acres of pristine landscape near the end of the road. Enjoy stunning views across the water of Mt. Bohemia and the Keweenaw's highest peaks.

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Looked hard at doing ABB a while ago, real estate market was super hot and numbers just didn’t make sense as a traditional rental as a fallback plan as I was worried about legislation. Initially legislation came out fine so was kicking myself for a little while but now the local gov’t has changed their tune and they are getting legislated out of existence in my area unless it’s your primary residence. Had some high profile arrests in Denver recently of people running illegal ones, Denver is finally starting to crackdown on those not following the new rules and/or getting licenses. A little to the south Colo Springs had a bonanza last year as they made it ok to operate any property as an ABB with a license but now they are talking big time about reclassifying them all as commercial businesses and the taxes in Colorado would probably wipe a lot of them out.

One thing I was pretty worried about as well when I was considering one was that they haven’t really been tested in an economic downturn, I think you will see a massive reduction in overnight rates if we ever actually experience another downturn and many people aren’t well capitalized enough that are doing these. Similar to all the people out there buying or refi-ing into rentals that only cashflow $100 bucks a month and stuff, too risky for me.

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3 hours ago, STEADYMOBBIN 22 said:

Cliff notes?

 

Landlords are evil.

* I just finished pt1.

Edited by Random

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Odd situation in my little slice of heaven.  Two of our larger landlords are retiring and have listed their properties.  One has 80 units and the other around 100.  The multi unit market was already pretty weak, but now we're looking at  under 10K/unit for some of their properties.  Neither of these guys were know for their upkeep (slumlords), so there will be some work to do upon acquisition.  Multis can be very profitable here but are also a lot of work and stress.  At the same time starter homes are going for 100/sqft.

I know what I should do here, but not sure I want to.

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1 hour ago, Random said:

Odd situation in my little slice of heaven.  Two of our larger landlords are retiring and have listed their properties.  One has 80 units and the other around 100.  The multi unit market was already pretty weak, but now we're looking at  under 10K/unit for some of their properties.  Neither of these guys were know for their upkeep (slumlords), so there will be some work to do upon acquisition.  Multis can be very profitable here but are also a lot of work and stress.  At the same time starter homes are going for 100/sqft.

I know what I should do here, but not sure I want to.

Just buy a few.  You actually thinking of buying 180 units?

Edit.....wait, maybe you mean these are just two buildings one with 80 and one with 100?  

 

Edited by ghostguy123

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42 minutes ago, ghostguy123 said:

Just buy a few.  You actually thinking of buying 180 units?

Edit.....wait, maybe you mean these are just two buildings one with 80 and one with 100?  

 

I really dont know if I want any of them, but its really hard to pass up the value here.

180 total units between the two landlords.  Some of the bigger complexes have already been sold.  Mostly small stuff left (2-4 units).

 

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We are in the finishing stages of building a two-unit townhome with a business partner. Once we get our CO, we will dissolve the LLC and transfer ownership of one unit to me (I am going to be living in it as my personal home) and transfer the ownership of the other unit to our business partner (she is going to be selling it).

This is our first time building so I am a bit unsure of the tax implications to me, if any, after that transfer takes place. While we will have a clear understanding of the value of our home when our business partner sells her side as the units are very similar, are there any immediate tax implications for me? Capital gains of some sort? Am I going to be on the hook for something? I just assumed, maybe incorrectly, that any gains wouldn't be realized until the time comes when I sell the home.

My tax accountant started peppering me with questions about how we were going to deal with it and had more questions than answers. 

Instead of feeling like a complete #######, I decided to go to FBG's for some insight. 

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Is there some sort of website where people are advertising what they want to buy?   Such as location, house type...?  Maybe even exact streets?

Seems like this would be a nice way to cut realtors out of the equation in a lot of cases.  For example if I was going to put my house up for sale I could check out that website to see if there is anyone interested in buying a house like mine in my area.  Conversely if I was looking to buy in a certain area or even a particular street I could advertise that.

I realize this exists in a bunch of scattered platforms, but seems it would be nice if there was a more mainstream site.  Think realtor.com but people advertising what they want rather than what they are selling.

Random thought of the day.

Edited by ghostguy123

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1 hour ago, ghostguy123 said:

Is there some sort of website where people are advertising what they want to buy?   Such as location, house type...?  Maybe even exact streets?

Seems like this would be a nice way to cut realtors out of the equation in a lot of cases.  For example if I was going to put my house up for sale I could check out that website to see if there is anyone interested in buying a house like mine in my area.  Conversely if I was looking to buy in a certain area or even a particular street I could advertise that.

I realize this exists in a bunch of scattered platforms, but seems it would be nice if there was a more mainstream site.  Think realtor.com but people advertising what they want rather than what they are selling.

Random thought of the day.

"Make Me Move" on Zillow?

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New to real estate investing, hoping someone can answer this question.

A friend and I formed a LLC.  We found a duplex and went to a bank for a loan. We were told we could get a 20 year ARM under the LLC. Spoke with a broker who suggested we get the duplex in just one of our names, so we can get a 30 year conventional loan at a lower, fixed rate. He said within a few months we could transfer the deed to the LLC. My question: is this the only way to get a 30 year loan with a LLC? And will this complicate the tax filing? Just unsure how it will work if we out the loan in one of our names.

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On 2/13/2020 at 7:14 PM, DevilDog919 said:

New to real estate investing, hoping someone can answer this question.

A friend and I formed a LLC.  We found a duplex and went to a bank for a loan. We were told we could get a 20 year ARM under the LLC. Spoke with a broker who suggested we get the duplex in just one of our names, so we can get a 30 year conventional loan at a lower, fixed rate. He said within a few months we could transfer the deed to the LLC. My question: is this the only way to get a 30 year loan with a LLC? And will this complicate the tax filing? Just unsure how it will work if we out the loan in one of our names.

I'd see if you can get the 30 year in both your names to protect both of you.   Your title rep can easily change ownership to the LLC after closing.  

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1 hour ago, Getzlaf15 said:

I'd see if you can get the 30 year in both your names to protect both of you.   Your title rep can easily change ownership to the LLC after closing.  

Be careful changing ownership/title after closing.  With some mortgages this can trigger a "due in full" or default clause. We recently moved all of our properties into and LLC and had to do some negotiation with the bank.

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30 minutes ago, Ron Swanson said:

Be careful changing ownership/title after closing.  With some mortgages this can trigger a "due in full" or default clause. We recently moved all of our properties into and LLC and had to do some negotiation with the bank.

Good point.  For sure tell them this in your intention up front and see if there is a possible issue.  

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Thanks guys. We ended up going with a 20 year fixed rate under the LLC. The broker who we were doing a 30 year with initially told us 5% down, but then said because the duplex was under 100k he needed 25% down. 

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On 8/16/2019 at 1:23 PM, Getzlaf15 said:

yes, we only put 25% down.     I would never buy one with an HOA or a lot of hotels in the area.  Communities are slapping restrictions on these all the time.

We booked an ABB on Oahu 12/14-12/22.    We were just told an ordinance was passed on Oahu (maybe all of hawaii) that an ABB/VRBO owner can only have one booking in a 30-day period.  This was passed after we booked.  We were lucky to not lose our booking.

That type of ordinance should be illegal.  Mostly the hotel lobby trying to get their occupancy up.  

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Anyone know the pros/cons on Ground or Land leases in CRE? Don't have any experience with them myself. 

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Question about 1031 exchange.

If you sell a property for 100k that you paid 50k for, do you have to spend all 50k in cash for the next property, or can you buy a 150k property with say 20% down and avoid taxes on the remaining 20k?

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2 hours ago, ghostguy123 said:

Question about 1031 exchange.

If you sell a property for 100k that you paid 50k for, do you have to spend all 50k in cash for the next property, or can you buy a 150k property with say 20% down and avoid taxes on the remaining 20k?

You have to have equal or greater than you did on the first purchase.   Based on what you said, you'd have to pay taxes on the $20k.  It's a little harder than that as you have to factor in depreciation that has been taken also.    Call three of your local title companies and ask if they have a 1031 department.  They will answer your questions.

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What’s everyone’s views on real estate here.   Still a lot to shake out, but I’d imagine prices have to start coming down.  Is that 10%, 20%, more?

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