Binky The Doormat
Footballguy
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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*** Official Real Estate Forum *** (2 Viewers)
- Thread starter jeff_eaglz
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Random
Footballguy
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.
Binky The Doormat
Footballguy
Rodrigo Duterte
Footballguy
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.
Phil Elliott
Footballguy
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.
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Binky The Doormat
Footballguy
needanap
Footballguy
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.
Rodrigo Duterte
Footballguy
500K? That's not that much fool.Bucky86 said:
Rodrigo Duterte
Footballguy
Bucky 86 being his ####### self again.
Binky The Doormat
Footballguy
Rodrigo Duterte
Footballguy
Rodrigo Duterte
Footballguy
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.
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.
Sand
Footballguy
FreeBaGeL
Footballguy
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?
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?
Zegras11
Footballguy
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.
whoknew
Footballguy
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.
Random
Footballguy
Random
Footballguy
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.
Zegras11
Footballguy
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..
Random
Footballguy
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.
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.
Zegras11
Footballguy
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.
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.
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.
Random
Footballguy
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STEADYMOBBIN 22
Footballguy
Random
Footballguy
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Random
Footballguy
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.
I know what I should do here, but not sure I want to.
ghostguy123
Footballguy
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?
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Random
Footballguy
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).
Senor Schmutzig
Footballguy
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.
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.
ghostguy123
Footballguy
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.
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.
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Ron Swanson
Footballguy
ghostguy123
Footballguy
DevilDog919
Footballguy
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.
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.
Long Ball Larry
Footballguy
Zegras11
Footballguy
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.
Ron Swanson
Footballguy
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.
Zegras11
Footballguy
Good point. For sure tell them this in your intention up front and see if there is a possible issue.
DevilDog919
Footballguy
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.
That type of ordinance should be illegal. Mostly the hotel lobby trying to get their occupancy up.
ConstruxBoy
Kate's Daddy
Anyone know the pros/cons on Ground or Land leases in CRE? Don't have any experience with them myself.
ghostguy123
Footballguy
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?
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?
Zegras11
Footballguy
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.
ditka...mike ditka
Footballguy
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?
BassNBrew
Footballguy
I’m not sure. There’s still a house shortage and the mortgage postponements should prevent foreclosures from flooding the market
ghostguy123
Footballguy
This one will be very complex. Not sure we know how this will play out cause we dont know how long businesses will be closed.
Some of you have oodles or rentals, so you probably just stay the course, but here was my thoughts on what I might do. I have 2 rentals, one paid off and one not.
The one that isnt paid off I owe about 47k, and theoretically it's worth about 85k. I know my current tenants plan to move out in july, so I thought about approaching them to see if I could put the place up for sale right now and let them leave as soon as someone makes an offer that I accept.
Things in my area seem to still be selling just fine. Maybe there is a value drop in a month, 4 months, year, 2 years....who knows. My thought were to take the 30 grand or so that I clear and use that for the stock market. I personally dont see any real recovery for several months, and hopefully I would have the money in hand by then.
I think real estate will be hit hard in the major cities for a while. Not sure people want to buy there for a while.
Who knows. This whole thing really is just at the beginning so man, who really knows. I just think if you can sell some properties at their recent market values then that is probably a wise move to diversify and have some cash available for other investments.
Some of you have oodles or rentals, so you probably just stay the course, but here was my thoughts on what I might do. I have 2 rentals, one paid off and one not.
The one that isnt paid off I owe about 47k, and theoretically it's worth about 85k. I know my current tenants plan to move out in july, so I thought about approaching them to see if I could put the place up for sale right now and let them leave as soon as someone makes an offer that I accept.
Things in my area seem to still be selling just fine. Maybe there is a value drop in a month, 4 months, year, 2 years....who knows. My thought were to take the 30 grand or so that I clear and use that for the stock market. I personally dont see any real recovery for several months, and hopefully I would have the money in hand by then.
I think real estate will be hit hard in the major cities for a while. Not sure people want to buy there for a while.
Who knows. This whole thing really is just at the beginning so man, who really knows. I just think if you can sell some properties at their recent market values then that is probably a wise move to diversify and have some cash available for other investments.
adonis
Footballguy
Any better insight into whether now is a good time to buy a house?
I can't help but think, personally, that we're at the very beginning of folks having to make tough decisions about selling homes they can no longer afford. The stimulus payments will tide most over another month or so, but in the next 3 -6 months I'd expect to see a pretty big disruption in the housing market all over. Fewer buyers, lots of folks looking to sell/downsize/rent.
Am I off here?
Unfortunately, my family is moving cities and HAS to find somewhere to stay. My wife is strongly in favor of buying because of security but I can't help but think we'd be buying at the absolute peak for the next year to few years, due to the decimation caused by the virus on jobs, wealth, income, etc.
Thoughts?
I can't help but think, personally, that we're at the very beginning of folks having to make tough decisions about selling homes they can no longer afford. The stimulus payments will tide most over another month or so, but in the next 3 -6 months I'd expect to see a pretty big disruption in the housing market all over. Fewer buyers, lots of folks looking to sell/downsize/rent.
Am I off here?
Unfortunately, my family is moving cities and HAS to find somewhere to stay. My wife is strongly in favor of buying because of security but I can't help but think we'd be buying at the absolute peak for the next year to few years, due to the decimation caused by the virus on jobs, wealth, income, etc.
Thoughts?
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