What is your asking price (by Roy [AL]) Jul 11, 2019 8:42 AM|
What is your asking price (by David [MI]) Jul 11, 2019 8:48 AM
What is your asking price (by Roy [AL]) Jul 11, 2019 9:07 AM
What is your asking price (by Deanna [TX]) Jul 11, 2019 9:08 AM
What is your asking price (by Roy [AL]) Jul 11, 2019 9:18 AM
What is your asking price (by S i d [MO]) Jul 11, 2019 9:29 AM
What is your asking price (by Oregon Woodsmoke [ID]) Jul 11, 2019 9:52 AM
What is your asking price (by Oregon Woodsmoke [ID]) Jul 11, 2019 9:55 AM
What is your asking price (by myob [GA]) Jul 11, 2019 11:12 AM
What is your asking price (by Deanna [TX]) Jul 11, 2019 12:07 PM
What is your asking price (by William [MI]) Jul 11, 2019 12:17 PM
What is your asking price (by David [NC]) Jul 11, 2019 12:19 PM
What is your asking price (by Roy [AL]) Jul 11, 2019 1:11 PM
What is your asking price (by Deanna [TX]) Jul 11, 2019 1:29 PM
What is your asking price (by David [NC]) Jul 11, 2019 1:44 PM
What is your asking price (by Dave [MO]) Jul 11, 2019 2:36 PM
What is your asking price (by Roy [AL]) Jul 11, 2019 2:44 PM
What is your asking price (by myob [GA]) Jul 11, 2019 3:12 PM
What is your asking price (by MMIT [VA]) Jul 11, 2019 3:31 PM
What is your asking price (by MYOB [GA]) Jul 11, 2019 4:26 PM
What is your asking price (by Deanna [TX]) Jul 11, 2019 5:28 PM
What is your asking price (by Roy [AL]) Jul 11, 2019 5:48 PM
What is your asking price (by Roy [AL]) Jul 11, 2019 6:01 PM
What is your asking price (by Roy [AL]) Jul 11, 2019 6:12 PM
What is your asking price (by myob [GA]) Jul 12, 2019 7:09 AM
What is your asking price (by Roy [AL]) Jul 12, 2019 8:09 AM
What is your asking price (by myob [GA]) Jul 12, 2019 5:23 PM
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What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 8:42 AM
If you were looking to sell of one of your best cash cows (single family house) and the house needed no immediate repairs or upgrades and even had a good long term tenant in it paying $600.00/month.
Lets assume a first time investor has approached you about buying this property since he would like to swap places with you. Is there enough information here for you to come up with an asking price for this house that consistently produces 25% returns after taxes, insurance and maintenance?
What is your asking price (by David [MI]) Posted on: Jul 11, 2019 8:48 AM
SFH that needs no repair or upgrades means it should sell retail to owner occupant... if I wanted to sell it, I would give 30 days notice (or wait until lease ends), list on MLS and not deal with investor lowballz --144.250.xx.xx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 9:07 AM
In many of my Class C hoods, there are plenty of people who would love to buy my house as their 1st time home purchase. However, there is one big problem, they can't qualify for a mortgage. And everyone else who can qualify for a mortgage, does not want to live in this Class C neighborhood. It is a Catch-22 thing. So, if I want to get 'all cash at closing', I am stuck with investors only here.
I am not going to RTO or Owner-Finance either, so lets not go there. --68.63.xxx.xxx
What is your asking price (by Deanna [TX]) Posted on: Jul 11, 2019 9:08 AM
Normally, if I was in ordinary times, and a newcomer wanted one of my best cash cows, I would say it's not for sale--- but here's a place out of my renovation queue you can practice on. And suppose I bought it for $2k, and I would ask $10. Or if I bought it for $4k, I would start by asking $20. Either house, when fully renovated, would be theoretically worth $50k - $100k to an owner-occupant, but it would require effort and materials to get there.
If I was in a different situation, and either my age or my health made it so that I was trying to exit the biz, or at least transition into something more turnkey, or perhaps cash out--- I would look at what the tax penalties were before I sold anything. And then I'd be more likely to sell places as they came vacant (if I had time) or my most troublesome places (if I was in a rush). "They're good houses, but seem to attract people whose lives are in turmoil. With better screening, you can probably avoid the problems I was running into." or "This house is good, but weird things keep happening. I've replaced the drains, the faucets, rerun the gaslines, replaced the CHA, replaced the ceilings, rerun the sewer line... I think I've run out of weird things to go wrong. Hahaha."
Otherwise, something that I didn't need to sell, and wasn't really thinking about selling--- I'd sell it for above-market, probably, and only if it brought in enough money to do something even better. A giant part of the success of our biz depends on screening, and there's no guarantee that a newbie investor wouldn't let in just the exact wrong person necessary to run it into the ground in less than five years. Then he'd be mad at you for selling him a dud (presuming y'all have a relationship that is making you entertain this thought) and you'd be mad at him for killing such an awesome house. --96.46.xxx.xx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 9:18 AM
If you are dealing with a new investor, would ever take a sheet of paper and a calculator and say "Allow me to show you (on paper here) what a 25% return actually means,... which I hope will help justify my asking price of $XXX.00 ?
Do all investors respond to $$$ numbers,..like I do? --68.63.xxx.xxx
What is your asking price (by S i d [MO]) Posted on: Jul 11, 2019 9:29 AM
Income potential isn't the typical way to value an investment SFH. For MF, yes, it's income based (CAP RATE).
SFHs prices are based on one of two things: comps or emotion. If the Seller is patient and knows the market, it will be based on comps. If Seller is ignorant of the market and/or wants it sold yesterday, it will be based on emotion...and you'll get a better deal.
So do your homework and pull Comps. Zillow makes it easy to look at everyone within a half mile radius of your house and see what they're asking...might even luck out a snag a few with actual sale prices. --107.216.xxx.xxx
What is your asking price (by Oregon Woodsmoke [ID]) Posted on: Jul 11, 2019 9:52 AM
Are you thinking of cutting back, Roy?
For a good house in excellent repair that needs no work done on it, I would ask full market price and then let the buyer make a counter offer.
For market price in your area, I haven't a clue because I don't know your mrket.
If there is no agent involved, you could also ask full market minus the real estate commission to make it a better deal for the buyer.
It wouldn't be 25% returns for the buyer since he would be paying much more for it t than you did. But you can reverse engineer the CAP rate using your figures. CAP isn't usually used for single family houses, but that would give you an invester's price as a negotiating start point. --98.146.xxx.xxx
What is your asking price (by Oregon Woodsmoke [ID]) Posted on: Jul 11, 2019 9:55 AM
If you are not downsizing, or maybe moving, selling the best house should only happen if you get enough money for it to 1031 into something noticeably better. Otherwise, you aren't coming out ahead. --98.146.xxx.xxx
What is your asking price (by myob [GA]) Posted on: Jul 11, 2019 11:12 AM
As an investment, for us, we really don't care who is buying. I'm not selling to owner occupant for any less than the property is worth using GRM (gross rent multiplier) Everyone I've sold too has use that formula.
rent 600.00 X 12 months is 7200.00 time 125 is 90,000. split atty fee 50/50 need 5% down and 1K on contract signing. Close in 30 days.
What is your asking price (by Deanna [TX]) Posted on: Jul 11, 2019 12:07 PM
Re: justification, do I want to sell? Or am I only thinking about selling because a new investor has made an unsolicited offer on a specific house, and I'm open to the idea, but not 100% on board with selling except under ideal circumstances?
If the former, I'll take the time to point out the value of the house and educate them. "This is what I would lose if I sold the house, so this is why your price would have to be darn good for me to consider it. This is what it could theoretically do for you, if you handled it right, so that's why it would be valuable."
If the latter, I wouldn't justify my price at all-- "That's its value to me." They'd be welcome to take it or leave it or counter, but I'd be less educational/conversational if I'm dealing with an unsolicited sales request. If someone is trying to fish for my properties and lowball what I worked hard to build-- I'm not open for debate. --107.77.xxx.xx
What is your asking price (by William [MI]) Posted on: Jul 11, 2019 12:17 PM
If you are selling it as an investment property and not as a single family home, it is all about cash flow and roi similar to multi. --96.70.xx.xx
What is your asking price (by David [NC]) Posted on: Jul 11, 2019 12:19 PM
Hard to tell in your market but if you told me you were getting $600 a month and I thought that was market rate, I'd be thinking of paying $60K for it in my market.
Is that what you are looking for? Kind of off the cuff ball park mental numbers? --71.217.xxx.xxx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 1:11 PM
I have 3 properties on the west side of my town. Knowing what I know now (after 13 years that is), I should have only bought properties on the East and North side of my city where all of the new development is moving towards. The west side of my city is moving backward, not forward. Last June, I listed one of these 3 houses on the MLS for $44,500. I had one cash offer at $38,000 and I accepted it. A newbie investor bought it.
Now, without any MLS listing, another investor has approached me telling me he has saved up $25K and wants to know if I have anything in my inventory that I would sell for $25K. I told him maybe and I will get back with you.
So, that is what this post is all about. --68.63.xxx.xxx
What is your asking price (by Deanna [TX]) Posted on: Jul 11, 2019 1:29 PM
Could you replace it for something just as good, in just as good condition, but in a better place, at $25,000?
If not, then definitely not.
If so, then you're breaking even. In some cases, breaking even is an awesome achievement! And other times, you don't think twice about it.
Generally, if I'm selling something that doesn't have any other negatives attached to it, I want to be able to gain at least two of what I'm losing for the price of what it is I'm letting go of. But I'm in growth mode; you're further along in your trajectory than I am. And the neighborhood itself is on a bad trajectory, so perhaps it's better to let go of it now, rather than 10-20 years from now, if you suspect it won't appeal to desirable tenants in the future.
So then the question is, what would it sell for to someone on the open market? If I sold it to an owner-occupant, how much would I get? If its market value is significantly more, then I wouldn't look at the lowball investor-- he needs to go find a distressed property if he wants a discount. If it's in the same neighborhood--- then I'd be willing to consider, and I'd start chatting with my accountant about what to be mindful of so that I don't get whacked with unexpected fees and taxes when I do decide to let go of something. --96.46.xxx.xx
What is your asking price (by David [NC]) Posted on: Jul 11, 2019 1:44 PM
Well 25K is almost 4 years of income without any taxes or insurance having to be paid. Tell him 29K LOL --71.217.xxx.xxx
What is your asking price (by Dave [MO]) Posted on: Jul 11, 2019 2:36 PM
Roy, since your homes are in class C hoods a LL is only gonna buy cash flow and no appreciation. Here is a couple of examples of recent sales for me in C hoods. Rent 575.00 sold for 28,000 and it came with a paying tenant. I had it for 9 years and paid 10K for it. Sold another one for 26K rents for 625.00. Owned it for about 20 plus years. Paid 20K for it. I tried the market before at what should be retail prices with no luck.
I took the money from those sales and purchased homes in much better hoods that I can get nice returns 15% (CAP) on and sell retail now or later. Things are much nicer. --72.24.xx.xx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 2:44 PM
Yes, I could buy another house on the East side for the same amount of money,...$5-10K for the house and $10-15K for rehab. I have done this on 3 other occasions when I needed to get out of crummy neighborhoods. And it is crummy neighbors that create crummy neighborhoods.
Would you like another reason for me to sell? I have no heirs to leave my estate to and I am sitting on ton of equity. Why not cash in some of that equity and go on spending spree,..just for the pure fun of it? Instead of paying cash for houses, maybe a new SUV or some other toy. BTW, the license plate on my F-150 pick-up truck says: ROYSTOY --68.63.xxx.xxx
What is your asking price (by myob [GA]) Posted on: Jul 11, 2019 3:12 PM
Roy after reading that last post-- WHAT THE HELL YA WAITING ON!
No one is more deserving of new SUV-- with all the bells and whistles tooo.
Roy I have heirs-- 2 of them--- I SPEND EVERY DOLLAR EVERY MONTH. WHY oh WHY do i need savings? Please tell me-- I have 63 equity machines-- I can't eat equity--- . Forget SPREE!!!! SPEND IT PERIOD. --99.103.xxx.xxx
What is your asking price (by MMIT [VA]) Posted on: Jul 11, 2019 3:31 PM
As I recall, you are in your 60's. Do you have an exit plan?
If not, is this a person that you could take under your wing and possibly groom to take over your business in 10 years and buy you out?
My properties were bought in the past 10 years.
My low end C- properties are only worth 45 times rent even in today's market. I bought these for an average of $20,000 each and they rent for $800/month. These houses are 100 years old and attract low end tenants. These houses are selling for $35,000 - $40,000 in today's market (for a good rent quality property).
The C properties are selling for 70 times rent. The rents average $800/month. The houses are around 75 years old.
My C+ properties are selling for 100 times rent. The rents average $900/month and the houses are 50 - 60 years old. The average purchase price for these houses was $45,000 and they are selling for $90,000 today.
The B property would sell for 150 times rent. I bought it for $62,000, it rents for $1,100/month and it would sell for $150,000 today.
Good luck! --70.188.xx.xx
What is your asking price (by MYOB [GA]) Posted on: Jul 11, 2019 4:26 PM
Purchase price should not enter into sales price-- maybe you brought right-- maybe not. current value.
Roy you say the property is renting for 600.00 that's really not you return though-- even if no mort-- don't you have taxes and insurance to deduct each month. That's would be the true income without reserve for replacement. --99.103.xxx.xxx
What is your asking price (by Deanna [TX]) Posted on: Jul 11, 2019 5:28 PM
Ah! Then the real question is, "Is it okay to reward myself?" And then the answer is-- "You've worked hard for it!"
Profit isn't always monetary. :)
You can't take equity with you. Turn it into something that does good for you, whether it's mentally, or emotionally, or spiritually, or whatever.
Just got word that a friend of mine's cancer has come back, and is being put on hospice. :( It was a reminder about what's important. --96.46.xxx.xx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 5:48 PM
You have a way of expressing my point of view better than I can. That is true, you can't pack equity in a suitcase and take it with you. I do have a Will and my older brother will decide what happens to my rental properties if I kick the bucket before he does. He will sell (liquidate) every property at fire sale pricing and take the money and run. He has no desire to do what I do. The thought of being a LL makes him nauseous. --68.63.xxx.xxx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 6:01 PM
MMIT (VA) - I have only sold a few of my C- properties so far and they generally sell for around 50 times rent. I sold those just to get out of those crappy neighborhoods. I have 2 more houses on the West side that I would like to cut loose of.
I have several C+ , some B- and the one Class A jewel that I live in. I do not know what times rent these would sell for but there is only one way to find out,..put em' on the market. --68.63.xxx.xxx
What is your asking price (by Roy [AL]) Posted on: Jul 11, 2019 6:12 PM
With my $600/month property (it is actually a single wide MH on a private lot) is what I am referring to here. It takes one months rent to pay the insurance, taxes and 10% for maintenance. 11 months of rent @ $600.00 = $6,600. $6,600 divided by my cost basis of $20,000 = .33% return. Is my math correct here? I have rented this place for 10 years and it has paid for itself 3 times over. --68.63.xxx.xxx
What is your asking price (by myob [GA]) Posted on: Jul 12, 2019 7:09 AM
Roy you should have that new SUV in the drive or at the least on order. My gosh that pretty great. Any investment that pays you back your outlay in less then 36 months-- YOUR DOING IT RIGHT. --99.103.xxx.xxx
What is your asking price (by Roy [AL]) Posted on: Jul 12, 2019 8:09 AM
How long does it normally take for your rental houses to return their total cost? More than 36 months?
My motto is: any investment (stocks, bonds, RE,) that earns enough income to pay itself off in 5 years or less, is a GREAT INVESTMENT. Most of my rental properties will pay for themselves in 3-5 years. If a property takes more than 5 years, that means I did something wrong,...probably paying more than I should have or under-estimated the amount of rehab the house needed. Not every house I buy is $5K. --68.63.xxx.xxx
What is your asking price (by myob [GA]) Posted on: Jul 12, 2019 5:23 PM
Roy 27 months. 36 is my max. Then move on but that's me. Before paying off the majority of my property's Roy I was watching Penney's. My theory: watch the penny's and the dollars will follow. --99.103.xxx.xxx
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