*** Official Real Estate Forum *** (2 Viewers)

[BassNBrew]

For those that flip homes. How do you paint? I've ordered some educational material and he states that he paints everything an antique white to avoid cutting in and save time. Seems to make sense? How do you guys do it?

Tuscan Beige Duron in flat latex. This color really pops with white trim. For you rental guys it touchs up like no ones business.

Interesting. I've alway used satin on the walls have the ability to wash them.

Satin never touches up right. I'd rather crack the paint can and paint over the boogers than scrub them off the walls.

 

[Sabertooth]

Thanks for doing this!  I've never owned RE.

Just saw a demand for it and thought I'd help if I can.

-Do physical structures ever appreciate at a rate higher than building costs inflation?

-Am I right in thinking that the land component of RE is the true driver of long-term RE value (insintric value?)?

Excellent questions.It is pretty much understood that the "dirt" holds most of the value. That's why you're allowed to depreciate the building (and its components) but never the land itself. As Mark Twain said, "buy land. they're not making any more."

Now the question is one of time. Land always appreciates over the long haul (just like they say the stock market on average goes up year over year). Fluctuations occur along the way, but the general trend is upwards.

However, if that was always true, then no one would ever build. The reason people build on the land is to recapture that value in a shorter timeframe and maximize the return on that land. Building a house, office space, warehouse, hotel or casino - they are all making money by taking advantage of the land. "Location location location" comes from just that. Ray Krok (founder of McDonalds) often stated that he was making money on the land (the locations of the McDonalds) than on the selling of food.

So - long story short - you can recapture the value from the dirt faster by building in a short period (relatively, can be under a year to 10 years), but yes desirable locations and supply / demand weigh in the long term (5 to 10 years or longer).

Supply / demand factors explain why Manhattan real estate is very expensive (as are most cities with limited land, like SF), but wide open country like Wyoming or Nebraska has cheap land that is unlikely to appreciate very quickly.

-You often hear the saying, "buy the worst house on the best block".  Is this solid thinking?

That's a very good way to go. You now have a "closed market", where you know what a rehab (rehabilitation property) will be worth. Example - you buy a "fixer upper" for $50,000 and the neighborhood has houses that are younger and bigger that sell for $200,000. The neighbors hate that old eyesore. So you buy it, put $75,000 into building either something new or rehabbing the existing home, and you know you'll get $200K.

The strategy still works with any house under the average / upper end of the neighborhood. Even cosmetics (landscaping, paint, etc.) can add huge value. Curb appeal.

-Generally, do you think that combining contingent lots is a solid way to create value? ie, buying two tear-me-downs that are next to each other and building a house that now sits on a lot much larger than its neighbors.

TIA

Yes.But be careful not to over extend your resources (labor, time, money). You never want to have a house half done and have to sell it, let alone two.

However - having 2 (or more) houses can be very lucrative, even if you are driving the price of the neighborhood up.

Here is what you can do.

Fix up a few townhouses (rowhomes in some areas) to all look similar. Sell the first one with owner financing to get top top top dollar. (Get an honest appraisal, but get maxed value).

Now when you sell the next one, you have your very own comp (comparable property) for appraisers to use. If anyone gives any grief, you can say "that one right next door sold for this" and they have to respect that number.

This is an interesting strategy that I am going to stick in my hip pocket. I plan on purchasing several homes over the next few years and I'll have to think about this. I may sell this first one on owner financing too. I figure I'll have about $40-$50k into it and ARV should be around $85-90k.

 

[Sabertooth]

For those that flip homes. How do you paint? I've ordered some educational material and he states that he paints everything an antique white to avoid cutting in and save time. Seems to make sense? How do you guys do it?

Tuscan Beige Duron in flat latex. This color really pops with white trim. For you rental guys it touchs up like no ones business.

Interesting. I've alway used satin on the walls have the ability to wash them.

Satin never touches up right. I'd rather crack the paint can and paint over the boogers than scrub them off the walls.

Good point. Never though of it that way. When I first painted my house, my dad said to use satin, so I did. He said you can wash it. Seemed smart to me. I've been living in my home for 2 years, haven't washed the walls yet. That's with two little kids. I usually just cover with paint.

 

[Sabertooth]

Flipping Homes

Steve Cook is a good guy who's a Marylander like myself. I think he's nationally known.

Just bought this. Seems to be a pretty good book in theory. I'll let you know what I think about it as I step through my first flip.

 

[Random]

Re ran the for rent ad this weekend. Dropped to 600/mo. Had a showing last night and they want it. Couple in their 50's with a 7yo daughter. Moving out of current rental due to foreclosure (said they paid rent, but landlord didn't pay bank). Guy actually wants to give me 2500 down per year to build up equity so he can buy it in 3 years. Is this normal? I told him it is for sale for 90K and he didn't squabble a bit. I'm shuked here. Should I accept the 2500? Is this some sort of scam? He's not Nigerian or anything. They also have 2 cats and 3 dogs. He agreed to an extra 50/mo rent because of this.

She filled out the rental app but left his info out. She is a csr at Walmart but didn't put any income info on the app. Red flags?

They said they will be able to move in by the 22nd. Waiting for tax refund.

I've got two showings scheduled for today. One lady owns a local diner. The other is a young couple. Guess I'll update later.

Random, I haven't read down farther yet, but my Spidey sense is absolutely freaking out just reading that.

Let me see what else is in here.

Alright, now that I am caught up, you could start a Girls squad with all the red flags in this one.1) Foreclosure, RIIIGHTTTTT

2) Surely they bad mouthed/trashed the last LL

3) Tries to throw big money at you / SMOKESCREEN

4) Wants to "buy", knows the verbiage, he's a pro at suckering LLs who are desperate. He told the last LL that just evicted him the same thing.

5) So they need a tax check to come up with moving costs. Read: Paycheck to paycheck. But they can support the 5 Animals that are going to tear up the house you just dumped thousands into?

6) Quickly agreed to the extra $50. Why? Because they will only have to pay it the first month. Get in the door, never pay again. Will most likely try and write a check for move-in costs.

7) Left his Info out. Have no idea where he works (He doesn't). He has TERRIBLE Credit as he is the one they ran their scams with in the past. Most likely has a Criminal record.

8) Got her info, it will still suck, but it's not as bad as his. Customer Service Rep at Walmart. Sure, $90K for the house, no big deal, I think I have it in my back pocket. Must get Massive Stock Options, because the gal working returns at Walmart doesn't qualify for a $90K loan.

Random, you are dealing with highly skilled deadbeats, with a PhD in screwing over LLs who don't know how to protect themselves. And you KNOW it. Your Spidey Sense went off. Learn to trust it. These people are more skilled than you are at the moment when it comes to renting. Never play with fire, you don't need this life lesson yet.

Sunday is my Wife's day in the Off season. I'll PM my Cell phone number to you. Feel free to use it if you are ever inclined. Sundays and early AMs are off limits.

Cant believe I just rolled out of bed early on a Sunday morning to see if you posted. Ok, I have a little more info regarding that couple. He called yesterday to see if I've made a decision yet. I told him I had not but that I did show the house to two other couples. I asked him why his info was not on the app and he said he thought she put it on. So I got it over the phone. Below is the summary of the three applicants.A) The land contract couple. App info follows:

Couple in their 50's. Current LL is brother in law who is losing the house to foreclosure. Prior LL is a guy I know of that has alot of rentals around town. No reason for leaving given on app. Combined income is 4500/mo. Both say they work full time and have been employed at current jobs 3 and 4 years. She's at WalMart and he's at a local machine shop. No listed loans (CC, car pmts, ect). Smoker(s), no bankruptcy, evictions, never been sued, and no convictions (though I'm sure I spotted some jailhouse tats on his hand). Drives a 96 Jeep Cherokee.

My take:

The guy talked the whole time, complimented the work, said he would never bother us to fix anything as he was a GC for 20 years. They have a 7yo daughter, seemed well behaved, 2 cats and 3 dogs. Offered up a $500 pet deposit and wants to buy the property on land contract if I was so inclined. If anything, this guy "overdidit". I think a credit/criminal history will turn something up on him, but I could be wrong.



My Take: Freaking Run. Certainly check out the background, but I'm telling you.

Super crappy credit! These people have

collection items and judgements against them. Looks like they are on

the

verge of bankruptcy. All of the judgements are from Med Payment issues.

B) The "Hunkerers". App info:

Couple in their 50's. Currently manage a local camp ground and get free housing, but claim its too much work for not getting paid. Left prior rental to take the campground job. She quit her then job to be at the campground full time, he works at a factory and brings home 1600/mo. Been there 3 years. Have two girls (12,13). Pays 60/wk for a car financed at quick credit and has no other cc/loans. Smokers (showed up smoking), never been evicted, never been sued or convicted "had bankruptcy in 01" (like its an std or something). Reference listed is actually the Realtor that lists a good majority of the foreclosures around here.

My take:

These guys are straight shooters. He didn't try to sell himself, just wants his evenings and weekends back. Both bedrooms in the house are upstairs, but neither of them appeared to do stairs well. Sounded like the upstairs bedrooms would be the girls' and they would "hang a curtain" between the two living rooms to make one their bedroom. "We dont entertain". My feeling on these guys is they just want a place to hunker and smoke and as long as they have a paycheck they will pay rent.



My Take: They don't make enough money to Qualify. At the very least you need

GROSS Income > 3 X Rent

They are a mess anyway.

Bankruptcy in 2002. They didn't learn their

lesson

because they have recent collection items (utilities collections

too...Rumpke & Pioneer Electric).

C) Admittedly my favorites. App info:

Couple in their 20's. 7yo girl and twin 6yo boys. Currently renting a house that has a $700/mo water bill. Agreement with LL is no rent until water is fixed (leak under house or something). This is going on two months. Been there two years. He works at his family's business (buys and sells restaurant equipment) and she is in Beauty College. Both drive Cadillacs and have no loans. Nonsmokers, no bankruptcy, eviction, lawsuits, or criminal history. No pets. Had references with them on a word doc. I recognize a few of the names from school.

My take:

Very clean and personable couple. Did not have the renter "look". Really liked the house and is also going to make one of the downstairs rooms a bedroom. I did not feel like they were going out of their way to impress me, they were just nice respectable people. Father of the lady lives a few streets over. Asked about school district. "Spidey senses" liked these guys.

I would run a solid background check, Criminal, Civil, Credit, Employment, Past LLs, and feel good about renting to them if everything was a go.

These people have horrible credit. No

Bankruptcies

but tons of recent collections. However, it looks like they are trying

to

turn it around because they have some sort of contract with a Credit

Solutions Company.

only had med payment collections from what I see. They do not

have any judgements against them which is good. We cannot find out

about

their criminal record from the NCF unless it's for unpaid child support

and

I didn't see anything like that.

D) Truck stop owner lady. She had to cancel yesterday because a freezer went down at he business but she really wants to see it. I'm supposed to call her today.



Can't comment at this point

Thoughts in red

Blue text is comments from one of our credit analysts at work. Also had another lady stop in yesterday. She's an RN and brings home 2800/mo. Bankruptcy due to divorce in 01. Moving out of current situation due to high gas bills (700+/mo). 21yo loser son lives with her. He smokes, she doesn't.This person has some collection items but that's it.

Mostly

med pays; however, there's one for Vectren and DP & L. Credit sucks

but

it's higher then the others.

 

[Sabertooth]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile.  It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price. 

I did mine last week.  It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10)  I had never done tiling before, but it's pretty simple.  I attended a 30min seminar at Home Depot and was on my way.  I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

 

[Random]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile. It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price.

I did mine last week. It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10) I had never done tiling before, but it's pretty simple. I attended a 30min seminar at Home Depot and was on my way. I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

No doubt it makes the kitchen look better. But if you're putting it in the kitchen, you almost need to follow through in the bathrooms. Is it worth it? To answer that, you need to know if its necessary to set your house apart from the others in your (selling) price range. My guess is at $85K you're not going to need it. By having new everything (cabinets, counters, carpet, vinyl, bathrooms, ect) you're going to have enough sizzle to catch the eye of the buyer. Tile wont make a big enough difference. Vinyl is much quicker and by the time you're doing the floor, no way you're going to want to do tile.

 

[Sabertooth]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile. It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price.

I did mine last week. It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10) I had never done tiling before, but it's pretty simple. I attended a 30min seminar at Home Depot and was on my way. I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

No doubt it makes the kitchen look better. But if you're putting it in the kitchen, you almost need to follow through in the bathrooms. Is it worth it? To answer that, you need to know if its necessary to set your house apart from the others in your (selling) price range. My guess is at $85K you're not going to need it. By having new everything (cabinets, counters, carpet, vinyl, bathrooms, ect) you're going to have enough sizzle to catch the eye of the buyer. Tile wont make a big enough difference. Vinyl is much quicker and by the time you're doing the floor, no way you're going to want to do tile.

Good point. I am thinking of just finding some good vinyl. It's not like I am in Cali or Florida. I live in a kind of depressed area, so I think new vinyl should be fine.

 

[Random]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile. It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price.

I did mine last week. It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10) I had never done tiling before, but it's pretty simple. I attended a 30min seminar at Home Depot and was on my way. I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

No doubt it makes the kitchen look better. But if you're putting it in the kitchen, you almost need to follow through in the bathrooms. Is it worth it? To answer that, you need to know if its necessary to set your house apart from the others in your (selling) price range. My guess is at $85K you're not going to need it. By having new everything (cabinets, counters, carpet, vinyl, bathrooms, ect) you're going to have enough sizzle to catch the eye of the buyer. Tile wont make a big enough difference. Vinyl is much quicker and by the time you're doing the floor, no way you're going to want to do tile.

Good point. I am thinking of just finding some good vinyl. It's not like I am in Cali or Florida. I live in a kind of depressed area, so I think new vinyl should be fine.

One other thing, KitchenKompact cabinets at Menards are your friends. Look great and average less than $90 per cabinet (including sink bases and corner cabinets). My basic rule for my $90K flip was not to upgrade anything (read: cheap everything), but to make everything new.

 

[Mike Anderson]

For those that flip homes. How do you paint? I've ordered some educational material and he states that he paints everything an antique white to avoid cutting in and save time. Seems to make sense? How do you guys do it?

If I can save the Wood Trim, we do. If not all trim is painted in Semi-Gloss SW Dover white.Walls are either Eggshell SW Antique White, or Eggshell SW Squirrels Tail

I used to go to the Habitat ReStore, buy every can of white shaded paint for a buck, mix them all together in a Garbage can, and pour back into 5 gallon buckets. I could get enough paint to take care of 4-5 units for $20.00. I would still do this if I was flipping.

The problem was that over the years, when I just needed to paint one wall, I would end up with a room where 3 or all 4 walls were just a slightly different shade of white. The other thing was if your batch was gone, and you only needed to touch up, you would have to repaint the whole wall.

With the new system, I only cut corners and such after every few turns. Re-roll the main body with what I know is the same paint. Also, SW gives me a tremendous discount as it is, like 65-70% off. I wait until the end of the year when they are trying to make numbers, and buy say 30 five gallon buckets of untinted paint for even more off, and they put the color in for free later in the year.

The problem I see with Trim and walls painted the same is that it doesn't look as good as it could. Do your own experiment. Paint the Wall and trim Antique White, and then across the room, paint the wall and trim even two different shades of white. The two different shades looks so much better it's almost silly. Work it out on the wall, and see what you think. A little extra cutting for what might be a faster sale? That's an easy answer for me.

If I never needed to paint it again (ie Selling it) I would go to the ReStore, buy every can of white for a buck, mix them together, and paint the house out.

 

[Mike Anderson]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile.  It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price. 

I did mine last week.  It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10)  I had never done tiling before, but it's pretty simple.  I attended a 30min seminar at Home Depot and was on my way.  I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

I ALWAYS recommend Tile. All I was saying here was that it never seems to get the "WOW" that you think it would. Just personal Experience.So My next move not long ago was to start Tiling Kitchen Counter tops. It started because I was doing a rehab, and the best move was an "L" shaped counter top. Well, they are more expensive than I wanted to pay, and harder to install and keep looking right. So I tiled the Counter top with the same tile that was on the floor.

SUPER easy. looks great. 3/4 Plywood, Cement board next, and tile it. They have premade tile wrap around pieces for the edge, but they also sell wood pieces for this very application, which I used. You can even cut strips of Tile and put them in with Mastic.

So, after that worked out, I noticed that Home Depot ALWAYS seems to have Granite and Marble for sale on Clearance at a buck a square foot. My last couple of Counter tops have been foot square Granite tiles. I needed a much better tile saw, so I rented it the first few times. Not that expensive, and it makes the cuts to wrap the edge in Granite as well.

Anyway, recommend Tile every single time. It's not hard to do at all.

 

[Mike Anderson]

If anyone is selling their home soon and want a quick and somewhat easy way to increase the value, I recommend putting in ceramic tile. It's an old saying that the kitchen sells the home, and this is a great way to remodle the kitchen at a somewhat low price.

I did mine last week. It took me a total of about 15-20 hours of work and cost about $300 for tile, tools, supplies etc.(10x10) I had never done tiling before, but it's pretty simple. I attended a 30min seminar at Home Depot and was on my way. I'm guessing for the $300 investment(plus labor), I increased my home value a couple k.

I would agree, although I have found that the effort vs ease of renting and the tenant's "Wow" factor is not a fair trade off for Ceramic in a rental.I still put Ceramic everywhere as I don't want to bother with it for decades, but it just isn't noticed like you would think in a rental from my experience.

Would you recommend tile in a "flip property" I am purchasing for $18.5k. If I make the place perfect, I can't expect more than $85k for it. Kitchen is going to be totally redone. Does this add a lot of sizzle?

No doubt it makes the kitchen look better. But if you're putting it in the kitchen, you almost need to follow through in the bathrooms. Is it worth it? To answer that, you need to know if its necessary to set your house apart from the others in your (selling) price range. My guess is at $85K you're not going to need it. By having new everything (cabinets, counters, carpet, vinyl, bathrooms, ect) you're going to have enough sizzle to catch the eye of the buyer. Tile wont make a big enough difference. Vinyl is much quicker and by the time you're doing the floor, no way you're going to want to do tile.

From a Flip position, I yield to Random here. Like I said, Tile just doesn't give you the Bang for the Buck that it really should. That comes from personal experience. I always seem proud of the tile, and no tenant ever seems to care.

 

[Sabertooth]

I've never tiled. My wife's uncle is a tile guy though and he'd show me how. I hear you on home depot always having tile clearance though. When you do a countertop, do you do the backsplash and everything? Might as well I'd assume.

I am so pumped today. I think my offer is accepted. I think I've got all the money lined up to pay cash for it. Then I plan to get a mortgage but get working right after I leave the title company. Hopefully I can finance the place for more than I buy it for, but it's a rough place so I guess it would all hang on the appraisal.

I have figured a "for sale" date for about Mother's day on this. I will contract out quite a bit. Roof, siding (kind of afraid of heights), drywall, windows. I could do some of the stuff but I want to get it done quickly. I guess I'll have to see what my estimates come back at.

I am very excited to be moving on a property though.

 

[Tiger Fan]

Just closed on a lot that is 100% paid off. I will likely be building w/in the next year. Goal of this house is to likely live in for 3-5 years and then sell and build my final house. Two questions:

1. Any benefits for me to take the loan out of my 401k as opposed to traditional builders loan?

2. I know "kitchens and bathrooms" are the money makers on resale, but any other websites out there to guide me on how I want to build this house?

 

[BassNBrew]

Just closed on a lot that is 100% paid off. I will likely be building w/in the next year. Goal of this house is to likely live in for 3-5 years and then sell and build my final house. Two questions:1. Any benefits for me to take the loan out of my 401k as opposed to traditional builders loan?2. I know "kitchens and bathrooms" are the money makers on resale, but any other websites out there to guide me on how I want to build this house?

Regarding #2, if you plan is to move the house in 3-5 you need to overspend and go state of the art on the kitchen. Otherwise it will be bordering on being dated and you'll have to dump more money into it then.

 

[Tiger Fan]

Just closed on a lot that is 100% paid off. I will likely be building w/in the next year. Goal of this house is to likely live in for 3-5 years and then sell and build my final house. Two questions:1. Any benefits for me to take the loan out of my 401k as opposed to traditional builders loan?2. I know "kitchens and bathrooms" are the money makers on resale, but any other websites out there to guide me on how I want to build this house?

Regarding #2, if you plan is to move the house in 3-5 you need to overspend and go state of the art on the kitchen. Otherwise it will be bordering on being dated and you'll have to dump more money into it then.

was planning on that anyway

 

[ditka85]

 

[Davej626]

Hey guys. I'm going to a real estate conference in Atlanta from 2/28-3/3. It will have a ton of speakers and everything. I'm not trying to sell it, so I'll let you check it out:

LEAP 2008

Anyway, I bought two tickets for $500 and then one cancelled on me. So if anyone is interested in going, let me know. All I need is to get my 250 back.

PM me if interested.

Dave.

 

[ThePassion]

So I am going to list my house for sale and have recently read through this forum and came across some of the incentives that could be offered to get more traffic and hopefully get the house sold quicker.

I am looking to sell my house in NJ to move into a condo in Philly. I do not need to sell the house and if it works out that would be awesome and we would then go buy a place in Philly.

So my thought:

Offer an incentive to the BUYER's agent of the house I am selling in NJ, that if an accepted offer is received then I will in return use that agent as MY BUYER's agent thereafter in pursuit of my Condo purchase in Philly.

Make sense or will this do nothing for me?

I believe there is a decent size group of RE Agents who handle both South Jersey and Philly transactions, so obviously I am targeting this group.

I am not sure if there is a good way to state this in the listing, my seller's agent said he would look into that for me. But I want to make it clear that I will be selling a house and as soon as a contract is in place I will need to find a new condo (already have 3-4) in mind and I will use this agent and they will get a purchase b/c I will need a place to live.

Thoughts?

 

[BassNBrew]

So I am going to list my house for sale and have recently read through this forum and came across some of the incentives that could be offered to get more traffic and hopefully get the house sold quicker.I am looking to sell my house in NJ to move into a condo in Philly. I do not need to sell the house and if it works out that would be awesome and we would then go buy a place in Philly. So my thought: Offer an incentive to the BUYER's agent of the house I am selling in NJ, that if an accepted offer is received then I will in return use that agent as MY BUYER's agent thereafter in pursuit of my Condo purchase in Philly.Make sense or will this do nothing for me?I believe there is a decent size group of RE Agents who handle both South Jersey and Philly transactions, so obviously I am targeting this group. I am not sure if there is a good way to state this in the listing, my seller's agent said he would look into that for me. But I want to make it clear that I will be selling a house and as soon as a contract is in place I will need to find a new condo (already have 3-4) in mind and I will use this agent and they will get a purchase b/c I will need a place to live.Thoughts?

meh...pay me now.

 

[ThePassion]

ya i guess but it is a guaranteed sale and 3% commission....... better then the next guy who has no incentive isn't it?

 

[BassNBrew]

ya i guess but it is a guaranteed sale and 3% commission....... better then the next guy who has no incentive isn't it?

I think most agents have seen this type of play many times where the back half doesn't come to fruition. I think +1% commission now or a bonus will get more attention. Besides, assuming that you're an honorable guy, what if some hack is the agent that brings the buyer and now you're stuck with doing more business with them. Lastly, I think this impacts the agency relationship in a negative way.Definately better than nothing and thinking outside of the box will help you achieve your goal in the long run.

 

[big country]

Hey guys I have been following this thread for a while. I am a home owner, and I am looking to build in the near future. The 1st thing I want to do is buy a lot ( I have found the one I wanted already). I want to pay on the lot for about 2 years before I start to build. Can any of my fellow FBGS give me any recommendations on who to go through for a lot loan? This is my 1st time building a home

TIA

Country

 

[Sabertooth]

Hey guys I have been following this thread for a while. I am a home owner, and I am looking to build in the near future. The 1st thing I want to do is buy a lot ( I have found the one I wanted already). I want to pay on the lot for about 2 years before I start to build. Can any of my fellow FBGS give me any recommendations on who to go through for a lot loan? This is my 1st time building a homeTIACountry

I am almost certain that you can get a mortgage on just a lot. That would be the most traditional way to do it. I would think that you could get a pretty good rate on it as well because it's not like you can just pick up the lot and leave. I'd call a bank and see what they can do for you. It will come down to your debt ratios and credit score, but really a bank has nothing to lose as long as you can get a clean deed on the land. When we bought our lot, we just deferred payment for a year while we sold our home. We bought it from our builder though too. We just stuck a deposit down on it of like $1000 and waited it out until we were ready to build.

 

[Sabertooth]

I have a question for those in the REI business.

I bid on the property above, it's a repo. The bank countered that at about $500 more (my realtor included for them to show clean title on it and some other small stuff). So now I have a counter offer of $19000 on the place. I confirmed to my realtor over the phone that I accept the counter.

Is the property as good as mine right now? Before I sign the counter? I mean can the bank for instance receive a bid this morning for $25k and pull the rug out from under me? Should I take off of work to go down and sign the counter? At what point is their a binding contract entitling me to the property?
My brother has a guy he works with who mentioned this exact property. He wants it for his daughter. The daughter and the guy's wife love the place. This co-worker told me brother he was going to submit a bid of $30-33k on the property. Assuming I get my deal closed, can I instantly turn around an sell this property to this other guy? What is the best way to do this? I am assuming I can't skip title. But could we do something where we all meet at the title office and do a double transfer? Is this legal?
For tax reasons, is this the best way to go about this? Mind you I want the property either way. On a flip I figure I could make $20-$35k on it. But if I can get $14k just to shuffle some papers, that seems even better.

 

[BassNBrew]

I have a question for those in the REI business.

I bid on the property above, it's a repo. The bank countered that at about $500 more (my realtor included for them to show clean title on it and some other small stuff). So now I have a counter offer of $19000 on the place. I confirmed to my realtor over the phone that I accept the counter.

Is the property as good as mine right now? Before I sign the counter? I mean can the bank for instance receive a bid this morning for $25k and pull the rug out from under me? Should I take off of work to go down and sign the counter? At what point is their a binding contract entitling me to the property?
My brother has a guy he works with who mentioned this exact property. He wants it for his daughter. The daughter and the guy's wife love the place. This co-worker told me brother he was going to submit a bid of $30-33k on the property. Assuming I get my deal closed, can I instantly turn around an sell this property to this other guy? What is the best way to do this? I am assuming I can't skip title. But could we do something where we all meet at the title office and do a double transfer? Is this legal?
For tax reasons, is this the best way to go about this? Mind you I want the property either way. On a flip I figure I could make $20-$35k on it. But if I can get $14k just to shuffle some papers, that seems even better.

Most verbal real estate contracts aren't binding so I would go sign it ASAP.Typically you can sell contracts, but there may be some small print in the addendum that you submitted. Personally if it was me and I didn't know the person I was doing business with, I'd keep the two deals separate.

 

[ravnzfan]

Just closed on a lot that is 100% paid off. I will likely be building w/in the next year. Goal of this house is to likely live in for 3-5 years and then sell and build my final house. Two questions:

1. Any benefits for me to take the loan out of my 401k as opposed to traditional builders loan?

2. I know "kitchens and bathrooms" are the money makers on resale, but any other websites out there to guide me on how I want to build this house?

:(

if you're building a house from scratch and want to use every available bell and whistle, consider DirectBuy.commuch like a Sam's Club, where "membership" is required, only we're talking like 4K to join---not for the light weights, for sure---but you'll be able to go top shelf on all the high end items and easily recoup the membership and them some when paying wholesale for kitchen/bath

used them on a recent bathroom remodel for over 2K in savings and will use them to get vinyl for my son's house this spring...

...my only regret is not being a member when we bought the 2 properties via auction for my kids several yrs ago

 

[Tiger Fan]

Just closed on a lot that is 100% paid off. I will likely be building w/in the next year. Goal of this house is to likely live in for 3-5 years and then sell and build my final house. Two questions:

1. Any benefits for me to take the loan out of my 401k as opposed to traditional builders loan?

2. I know "kitchens and bathrooms" are the money makers on resale, but any other websites out there to guide me on how I want to build this house?

if you're building a house from scratch and want to use every available bell and whistle, consider DirectBuy.commuch like a Sam's Club, where "membership" is required, only we're talking like 4K to join---not for the light weights, for sure---but you'll be able to go top shelf on all the high end items and easily recoup the membership and them some when paying wholesale for kitchen/bath

used them on a recent bathroom remodel for over 2K in savings and will use them to get vinyl for my son's house this spring...

...my only regret is not being a member when we bought the 2 properties via auction for my kids several yrs ago

I've already got a builder, so not sure if this site would benefit me or not. But I appreciate the advice....I'll definitely pass it on to a few friends of mine.

 

[n currency]

how many of you invest into cash earning property? now is a good time to buy.

 

[Mike Anderson]

So I am going to list my house for sale and have recently read through this forum and came across some of the incentives that could be offered to get more traffic and hopefully get the house sold quicker.I am looking to sell my house in NJ to move into a condo in Philly. I do not need to sell the house and if it works out that would be awesome and we would then go buy a place in Philly. So my thought: Offer an incentive to the BUYER's agent of the house I am selling in NJ, that if an accepted offer is received then I will in return use that agent as MY BUYER's agent thereafter in pursuit of my Condo purchase in Philly.Make sense or will this do nothing for me?I believe there is a decent size group of RE Agents who handle both South Jersey and Philly transactions, so obviously I am targeting this group. I am not sure if there is a good way to state this in the listing, my seller's agent said he would look into that for me. But I want to make it clear that I will be selling a house and as soon as a contract is in place I will need to find a new condo (already have 3-4) in mind and I will use this agent and they will get a purchase b/c I will need a place to live.Thoughts?

meh...pay me now.

If your current selling agent is good, works well with you, it will come as quite the insult to them when you ask to have them put in language that you will use someone else instead of them. If your current agent isn't any good, just get rid of them now.

 

[Jeff Pasquino]

I have a question for those in the REI business.

I bid on the property above, it's a repo. The bank countered that at about $500 more (my realtor included for them to show clean title on it and some other small stuff). So now I have a counter offer of $19000 on the place. I confirmed to my realtor over the phone that I accept the counter.

Is the property as good as mine right now? Before I sign the counter? I mean can the bank for instance receive a bid this morning for $25k and pull the rug out from under me? Should I take off of work to go down and sign the counter? At what point is their a binding contract entitling me to the property?
My brother has a guy he works with who mentioned this exact property. He wants it for his daughter. The daughter and the guy's wife love the place. This co-worker told me brother he was going to submit a bid of $30-33k on the property. Assuming I get my deal closed, can I instantly turn around an sell this property to this other guy? What is the best way to do this? I am assuming I can't skip title. But could we do something where we all meet at the title office and do a double transfer? Is this legal?
For tax reasons, is this the best way to go about this? Mind you I want the property either way. On a flip I figure I could make $20-$35k on it. But if I can get $14k just to shuffle some papers, that seems even better.

Most verbal real estate contracts aren't binding so I would go sign it ASAP.Typically you can sell contracts, but there may be some small print in the addendum that you submitted. Personally if it was me and I didn't know the person I was doing business with, I'd keep the two deals separate.

Buy the property in an LLC, then sell the LLC.You're welcome.

 

[Jeff Pasquino]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

 

[Jeff Pasquino]

Hey guys. I'm going to a real estate conference in Atlanta from 2/28-3/3. It will have a ton of speakers and everything. I'm not trying to sell it, so I'll let you check it out:

LEAP 2008

Anyway, I bought two tickets for $500 and then one cancelled on me. So if anyone is interested in going, let me know. All I need is to get my 250 back.

PM me if interested.

Dave.

I don't go to these nearly as often as I once did - but I still know quite a few of these speakers (heck, I've spoken in several areas myself).In general, search EVERY SPEAKER before you get there.

DO NOT buy anything there that you didn't plan on buying in the first place.

Know what you want to come out of the event before you even go.

If you try and do everything at once, you'll accomplish nothing.

If you are just starting, pick one thing, learn it, do it - and learn to do it well. Then add to your abilities.

 

[Doctor Detroit]

Really considering buying property at the moment but I'm not sure what right now.

I have talked about buying a vacation/retirement cottage on an inland lake in Michigan but that would be costly unless I rent it out during the summer which I probably would. Taxes are ok.

But what I really want to do is buy a house in Detroit. Right now the prices are dropping hard and I have found several homes in historic neighborhoods for a fraction of what they went for just a few years ago. I found a 1600 square foot brick tudor which sold for 210k in 2001 for 89.5k. Found a whole lot more plus I haven't even considered foreclosures.

Now there are a ton of concerns. First off is that the zip code these houses are in was in the top 20 in nationwide foreclosures last year. Then there is Detroit's horrible economy, probably the worst in the U.S. Then there is the neighborhood. Where I am looking is an upper-middle class black neighborhood with private security, neighborhood watch, and most importantly...no HUD houses within six blocks. Most of these houses were built in the 1930s and have a whole lot of character. Many have been very well maintained with upgrades. From what I see some were bought in the 90s, updated, and flipped to professionals who wanted to live in the area. Crime in this area outside of larceny is almost non existent and the neighborhood does a fine job of policing itself.

But the bottom line is that Detroit is a very large city that used to be full of nice neighborhoods just like this, and now almost all of them are gone. The neighborhood I grew up in was third or fourth nationwide in foreclosures and we are talking 90k homes. Now I'd like to buy because of my faith that the city has hit bottom and will come back and this neighborhood is one of seven or eight in the city that would be most attractive to anyone wanting to move back (which I see as inevitable).

And there are more problems. Finding qualified tenants will not be easy, property management in the area is higher because of the crime in the city, and six blocks east or southwest is where you get into the worst areas on the west-side of Detroit.

Anyway my brain tells me to run because that's what everyone else is doing but I believe this is a fairly decent risk and one I think I would embrace more than paying for a vacation house that is used 60 days out of the year. It's a neighborhood I'd live in now if I lived in the area and a place where a lot of very successful people have lived over the decades. I don't see this neighborhood falling apart and if I'm right we are talking about getting properties half off and probably at a third of the cost than they would be in other cities.

Example 1

Example 2

Example 3

How nuts am I? Should I concentrate on the foreclosures? What about a foreclosed house should I consider? What is the best place to research and view foreclosed homes in the area I am interested in? One of the paid sites like Realtytrac? Much thanks for any thoughts.

 

[Sabertooth]

I have a question for those in the REI business.

I bid on the property above, it's a repo. The bank countered that at about $500 more (my realtor included for them to show clean title on it and some other small stuff). So now I have a counter offer of $19000 on the place. I confirmed to my realtor over the phone that I accept the counter.

Is the property as good as mine right now? Before I sign the counter? I mean can the bank for instance receive a bid this morning for $25k and pull the rug out from under me? Should I take off of work to go down and sign the counter? At what point is their a binding contract entitling me to the property?
My brother has a guy he works with who mentioned this exact property. He wants it for his daughter. The daughter and the guy's wife love the place. This co-worker told me brother he was going to submit a bid of $30-33k on the property. Assuming I get my deal closed, can I instantly turn around an sell this property to this other guy? What is the best way to do this? I am assuming I can't skip title. But could we do something where we all meet at the title office and do a double transfer? Is this legal?
For tax reasons, is this the best way to go about this? Mind you I want the property either way. On a flip I figure I could make $20-$35k on it. But if I can get $14k just to shuffle some papers, that seems even better.

Most verbal real estate contracts aren't binding so I would go sign it ASAP.Typically you can sell contracts, but there may be some small print in the addendum that you submitted. Personally if it was me and I didn't know the person I was doing business with, I'd keep the two deals separate.

Buy the property in an LLC, then sell the LLC.You're welcome.

Can I form an LLC before the closing date in 28 days? Can you unpack this for me a little bit? I have never done this. If I am reading this right.1. I have the home under Contract.

2. I form an LLC to buy the home (offers have all been in my personal name, will this be a problem?)

3. I then just sell the LLC for say $10k to this other guy.

4. I walk with 10k and he owns the contract to buy the house from the foreclosing bank for $19k.

Couple of questions. Is the Bank ok with this? Do they need to know? How quickly can I form an LLC? Days?

Will the end-buyer have any issues with the title company? He is buying the home as a residence to his daughter. Not a business owner, more of a residential owner. Is there a tax reason that we cause him grief if he bought the home through and LLC and then just used it for his daughter to live in?

Am I getting ahead of myself here?

 

[n currency]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

 

[Sabertooth]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

 

[Random]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

There's a pretty good discussion on CAP rate on page 16 of this thread. There's more on pages 22,26 and 31.

 

[Rounders]

Newbie home owner here (actually bought a condo 2 years ago). The wife and I are discussing 2 home improvement projects with the sole purpose of upping in the re-sale value. We have a 2 bedroom, 1 bathroom condo in downtown Chicago. It was a gut rehab 10 years ago. We have painted, installed hardwood floors through-out, added new doors and trim. Our plan is to say for 2 more years and then sell (hopefully) and we are discussing either remodeling the bathroom (drop in a double sink, new vanity, new bath tile, new bath tub) or updating the kitchen (new appliances, new countertops).

Question: Which of these projects will do more for me when it comes time to sell? Kitchen or Bathroom?

 

[Random]

Newbie home owner here (actually bought a condo 2 years ago). The wife and I are discussing 2 home improvement projects with the sole purpose of upping in the re-sale value. We have a 2 bedroom, 1 bathroom condo in downtown Chicago. It was a gut rehab 10 years ago. We have painted, installed hardwood floors through-out, added new doors and trim. Our plan is to say for 2 more years and then sell (hopefully) and we are discussing either remodeling the bathroom (drop in a double sink, new vanity, new bath tile, new bath tub) or updating the kitchen (new appliances, new countertops).Question: Which of these projects will do more for me when it comes time to sell? Kitchen or Bathroom?

Which one needs it more? If it was rehabbed 10 yrs ago, I cant imagine either NEEDING remodeled.

 

[Davej626]

Newbie home owner here (actually bought a condo 2 years ago). The wife and I are discussing 2 home improvement projects with the sole purpose of upping in the re-sale value. We have a 2 bedroom, 1 bathroom condo in downtown Chicago. It was a gut rehab 10 years ago. We have painted, installed hardwood floors through-out, added new doors and trim. Our plan is to say for 2 more years and then sell (hopefully) and we are discussing either remodeling the bathroom (drop in a double sink, new vanity, new bath tile, new bath tub) or updating the kitchen (new appliances, new countertops).Question: Which of these projects will do more for me when it comes time to sell? Kitchen or Bathroom?

Kitchen if you go all out. Baths if you want budget. Really can't go wrong either way...

 

[Sabertooth]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

There's a pretty good discussion on CAP rate on page 16 of this thread. There's more on pages 22,26 and 31.

I'll check that out. Nothing like looking right under my nose.

 

[Random]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

There's a pretty good discussion on CAP rate on page 16 of this thread. There's more on pages 22,26 and 31.

I'll check that out. Nothing like looking right under my nose.

This thread needs a glossary.

 

[n currency]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

Self storage can be profitable but it requires you to get your hands a little dirty with management responsibilities otherwise bite the bullet with hiring a management team. Most people find properties with NNN (triple net leases) to be the most desireable since there is little to do on the onwers side other than collect a check. Tenent is responsible for Tax, Insurance, and CAM (common area maintenance) charges. Usually, a wise investor will allocate a certain amount of that into a reserve account to pay for costly repairs later down the road, ex. roof, parking lot, etc.down and dirty cap rate explanation.Stands for Capitalization rate or a number that represents risk. The higher the cap usually more risk is involved whether it be a bad location, possible tenant backrupcy, plumeting market, etc. A price is determined for commercial property based on this number and is calculated by the NOI (net operating income) by the cap rate. Caps are found by looking at recent sales and market trends. A owner can usually expect a ROI (return on investment) of that number. Caps are anywhere from 6.5% to 10% now. not to mention the appreciation of the property 10 years from now with a 6% return in between. Hope this helps. pm me if interested further.

 

[Jeff Pasquino]

I have a question for those in the REI business.

I bid on the property above, it's a repo. The bank countered that at about $500 more (my realtor included for them to show clean title on it and some other small stuff). So now I have a counter offer of $19000 on the place. I confirmed to my realtor over the phone that I accept the counter.

Is the property as good as mine right now? Before I sign the counter? I mean can the bank for instance receive a bid this morning for $25k and pull the rug out from under me? Should I take off of work to go down and sign the counter? At what point is their a binding contract entitling me to the property?
My brother has a guy he works with who mentioned this exact property. He wants it for his daughter. The daughter and the guy's wife love the place. This co-worker told me brother he was going to submit a bid of $30-33k on the property. Assuming I get my deal closed, can I instantly turn around an sell this property to this other guy? What is the best way to do this? I am assuming I can't skip title. But could we do something where we all meet at the title office and do a double transfer? Is this legal?
For tax reasons, is this the best way to go about this? Mind you I want the property either way. On a flip I figure I could make $20-$35k on it. But if I can get $14k just to shuffle some papers, that seems even better.

Most verbal real estate contracts aren't binding so I would go sign it ASAP.Typically you can sell contracts, but there may be some small print in the addendum that you submitted. Personally if it was me and I didn't know the person I was doing business with, I'd keep the two deals separate.

Buy the property in an LLC, then sell the LLC.You're welcome.

Can I form an LLC before the closing date in 28 days? Can you unpack this for me a little bit? I have never done this. If I am reading this right.1. I have the home under Contract.

2. I form an LLC to buy the home (offers have all been in my personal name, will this be a problem?)

3. I then just sell the LLC for say $10k to this other guy.

4. I walk with 10k and he owns the contract to buy the house from the foreclosing bank for $19k.

Couple of questions. Is the Bank ok with this? Do they need to know? How quickly can I form an LLC? Days?

Will the end-buyer have any issues with the title company? He is buying the home as a residence to his daughter. Not a business owner, more of a residential owner. Is there a tax reason that we cause him grief if he bought the home through and LLC and then just used it for his daughter to live in?

Am I getting ahead of myself here?

Buy the property in a company name (LLC) - this includes the contract.Sell the LLC.

You didn't assign the contract - you sold the company. The company was always on the contract.

I'd run it by your local RE title company / closing agent.

You may also save on transfer taxes as well.

 

[Jeff Pasquino]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

PM sent.

 

[Jeff Pasquino]

how many of you invest into cash earning property? now is a good time to buy.

Where? Show me what you think is a good deal - PM / email if needed.

Depends what you are looking for, cap rates across the board are going up. I'm in California but see listings all over the US. Commercial only.

I am interesting in learning about Self-storage facilities. Don't know one thing about them except that using basic algebra tells me they can make some good money. Can somebody give me a quick and dirty example of a Cap Rate? I hear these used in Mobile home park circles a bit.

There's a pretty good discussion on CAP rate on page 16 of this thread. There's more on pages 22,26 and 31.

I'll check that out. Nothing like looking right under my nose.

This thread needs a glossary.

Never intended to create this monster - but look what happened.

 

[Jeff Pasquino]

down and dirty cap rate explanation.

Stands for Capitalization rate or a number that represents PERCEIVED risk. The higher the cap usually more ALLEGED risk is involved whether it be a bad location, possible tenant bankrupcy, plummeting market, etc. A price is determined for commercial property based on this number and is calculated by the NOI (net operating income) by the cap rate. Caps are found by looking at recent sales and market trends. A owner can usually expect a ROI (return on investment) of that number. Caps are anywhere from 6.5% to 10% now. not to mention the appreciation of the property 10 years from now with a 6% return in between.

Hope this helps. pm me if interested further.

Fixed (somewhat).Mobile Home Parks have great CAPS, often >10%. Perceived to be risky, but aren't if you buy right.

Cap Rate = NOI / Price.

NOI = $100K, Price = $1M, Cap Rate = 10%. 10% is the de facto teetering point between a good and bad investment.

As a buyer, you want >10% (because you get more NOI for your price).

As a seller, you want the opposite - biggest sales price for your NOI.

Yes, I answer this one a lot. Even my students still ask this.

CAP rate and NOI are the two most basic numbers in commercial RE. You simply MUST know these terms and how to figure these numbers.

Also, the ROI statement isn't 100% correct. Your return on your investment really depends on how much you put up to buy it in the first place, your cash flow, and your exit strategy.

For example, if you buy that $100K NOI property with 20% down ($200K) and you clear only $2K a month after paying your mortgage, you are getting 24K a year for $200K, or a return of 12% (before you figure all the tax implications).

If you buy a property with 10% down ($100K) and clear $1200 a month, you get $14,400 a year, or 14.4% ROI.

 

[n currency]

down and dirty cap rate explanation.

Stands for Capitalization rate or a number that represents PERCEIVED risk. The higher the cap usually more ALLEGED risk is involved whether it be a bad location, possible tenant bankrupcy, plummeting market, etc. A price is determined for commercial property based on this number and is calculated by the NOI (net operating income) by the cap rate. Caps are found by looking at recent sales and market trends. A owner can usually expect a ROI (return on investment) of that number. Caps are anywhere from 6.5% to 10% now. not to mention the appreciation of the property 10 years from now with a 6% return in between.

Hope this helps. pm me if interested further.

Fixed (somewhat).Mobile Home Parks have great CAPS, often >10%. Perceived to be risky, but aren't if you buy right.

Cap Rate = NOI / Price.

NOI = $100K, Price = $1M, Cap Rate = 10%. 10% is the de facto teetering point between a good and bad investment.

As a buyer, you want >10% (because you get more NOI for your price).

As a seller, you want the opposite - biggest sales price for your NOI.

Yes, I answer this one a lot. Even my students still ask this.

CAP rate and NOI are the two most basic numbers in commercial RE. You simply MUST know these terms and how to figure these numbers.

Also, the ROI statement isn't 100% correct. Your return on your investment really depends on how much you put up to buy it in the first place, your cash flow, and your exit strategy.

For example, if you buy that $100K NOI property with 20% down ($200K) and you clear only $2K a month after paying your mortgage, you are getting 24K a year for $200K, or a return of 12% (before you figure all the tax implications).

If you buy a property with 10% down ($100K) and clear $1200 a month, you get $14,400 a year, or 14.4% ROI.

it was the down and dirty version, clearly there are a lot of factors that effect cap rates, returns, etc. In fact, deriving a cap rate is the easy part, its getting financing now that proves tricky for any deal since the whole mortgage bust.

 

[big country]

Hey guys I have been following this thread for a while. I am a home owner, and I am looking to build in the near future. The 1st thing I want to do is buy a lot ( I have found the one I wanted already). I want to pay on the lot for about 2 years before I start to build. Can any of my fellow FBGS give me any recommendations on who to go through for a lot loan? This is my 1st time building a homeTIACountry