Housing Market Still Nuts!

[beaverretriever]

We are currently in the market to buy few investment properties and one popped up on MLS that we were interested in (one day on MLS). It is near the university here in town and would be a great rental property. Called our local realtor and jammed over there to take a look at it with him. While we were at the house, we decided to put in a full price offer and our realtor made the call. It literally sold that same morning for 15k over asking price. Keep in mind it was only listed for 299k so that's 5% over list price which just seems insane to me. It was a decent deal even at list, so I guess if the market can bear it, so be it.

 

[Raffit78]

Same competitiveness in Upland Ca. Decent houses rarely stay on the market. Plenty of qualified buyers out there scooping the good real estate up.

 

[beaverretriever]

Same competitiveness in Upland Ca. Decent houses rarely stay on the market. Plenty of qualified buyers out there scooping the good real estate up.

Well we are in Nevada. Cali is always crazy, but so many are coming here to Northern NV Reno and it's just out of hand. Depending on the area here in town homes keep getting multiple bids. If you don't mind living a little further from city center there are new tract homes going up that are not too bad price wise. But anything close to mid town, old south west or inexpensive stuff near the university go way over asking price.

It's good and bad I guess. Good for us in our current home, but makes it hard for us to buy investments. My wife and I were just saying how bad traffic has become int he past few years here. We have been here seven years (moved from Vegas) and it's getting worse by leaps and bounds every year.

 

[HB2Havasu]

What? According to the Libtards were in a recession, lol.
$299K sounds pretty cheap compared to SoCal prices, that's a down payment here. Good Luck in the future!!!

 

[beaverretriever]

What? According to the Libtards were in a recession, lol.
$299K sounds pretty cheap compared to SoCal prices, that's a down payment here. Good Luck in the future!!!

Well to be fair the home was built in 1930 and 1200sqft. Even the neighborhood is rough, but the vicinity to UNR is top notch! It did have a decent all new renovation. No garage, but a big lot.

 

[Flying_Lavey]

It isn't in Heritage Ranch.... Shit sitting on the market for months even when listed below all estimates. My house being one of the many victims...

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[NicPaus]

It isn't in Heritage Ranch.... Shit sitting on the market for months even when listed below all estimates. My house being one of the many victims...

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What's the cheapest ones listed at?

 

[NicPaus]

Well to be fair the home was built in 1930 and 1200sqft. Even the neighborhood is rough, but the vicinity to UNR is top notch! It did have a decent all new renovation. No garage, but a big lot.

I am bidding on 1 down the street from this job. They close on the 1st. 1300 sq ft original from 1954. They had to reduce the price 100k to sell. Market slowing down. Was still 1.3M.

 

[bk2drvr]

We are currently in the market to buy few investment properties and one popped up on MLS that we were interested in (one day on MLS). It is near the university here in town and would be a great rental property. Called our local realtor and jammed over there to take a look at it with him. While we were at the house, we decided to put in a full price offer and our realtor made the call. It literally sold that same morning for 15k over asking price. Keep in mind it was only listed for 299k so that's 5% over list price which just seems insane to me. It was a decent deal even at list, so I guess if the market can bear it, so be it.

The reason you lost this property is because there are investors that put offers in on these properties sight unseen for over asking price as soon as they hit the MLS. Its a simple math equation for them really. If the numbers line up then they shoot over a full or over asking price offer off and tie up the property for a day while they determine if they really want it or not. There are enough "outs' that they aren't at risk of losing any earnest money.

 

[Flying_Lavey]

What's the cheapest ones listed at?

For a house.... Looks like the cheapest is a 980 sq. Ft. 2/2 listed at $285k

My 2/2 at 1500+ sq ft with 2 car garage and RV parking is listed at $346k

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[beaverretriever]

It isn't in Heritage Ranch.... Shit sitting on the market for months even when listed below all estimates. My house being one of the many victims...

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Pardon my ignorance, but where is Heritage Ranch? I assume socal?

 

[Flying_Lavey]

Pardon my ignorance, but where is Heritage Ranch? I assume socal?

Central coast CA. Lake Nacimiento.

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[beaverretriever]

The reason you lost this property is because there are investors that put offers in on these properties sight unseen for over asking price as soon as they hit the MLS. Its a simple math equation for them really. If the numbers line up then they shoot over a full or over asking price offer off and tie up the property for a day while they determine if they really want it or not. There are enough "outs' that they aren't at risk of losing any earnest money.

Not an investor from what I was told but a young couple first time buyers. Financing as well as the sale is contingent on their financing. We have a back up offer in on it.

Yeah, we are definitely not in the position to be putting in offers on places we have no clue about or the time to deal with getting earnest money back etc. We are small time for sure.

 

[beaverretriever]

Central coast CA. Lake Nacimiento.

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Wow, that surprises me. When my parents sold their home in Arroyo Grande they had multiple offers and sold for well over asking. That was 15 years ago though. There isn't much work or business wise on the central coast so I guess anyone who is going to buy there is prob gonna pay cash and retired. Maybe most of those people are moving out of Ca?

 

[lbhsbz]

A house up the street...small 3bed/1bath, tiny awkward kitchen...doesn’t even have a vent hood above the stove...just a glorified bathroom fan from 1942...about 1200 sq.ft, built in the ‘40s, on a 5200sq/ft lot in Long Beach just got 5 offers over asking within 5 days of hitting the market. Was listed at $599K

Sure doesn’t look like anything is slowing down.

 

[beaverretriever]

For a house.... Looks like the cheapest is a 980 sq. Ft. 2/2 listed at $285k

My 2/2 at 1500+ sq ft with 2 car garage and RV parking is listed at $346k

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Wow, I had no idea you could get a house that cheap around those parts.

 

[NicPaus]

Wow, that surprises me. When my parents sold their home in Arroyo Grande they had multiple offers and sold for well over asking. That was 15 years ago though. There isn't much work or business wise on the central coast so I guess anyone who is going to buy there is prob gonna pay cash and retired. Maybe most of those people are moving out of Ca?

I would be buying it as a vacation lake house.

 

[attitude]

I know nothing about investment properties but I assume you plan on renting it out to college students because you mentioned it was by a university. I can’t imagine college students would be easy tenants considering how you’re house might get treated. The house behind my dads was always rented to different college kids and they threw plenty of parties

 

[Flying_Lavey]

I would be buying it as a vacation lake house.

I actually think mine would make a killer vacation house. It's in a tract with no parking restrictions. If I could afford to keep it for such I would in a heart beat!

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[NicPaus]

I actually think mine would make a killer vacation house. It's in a tract with no parking restrictions. If I could afford to keep it for such I would in a heart beat!

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Any rules against short term rental?

 

[beaverretriever]

I know nothing about investment properties but I assume you plan on renting it out to college students because you mentioned it was by a university. I can’t imagine college students would be easy tenants considering how you’re house might get treated. The house behind my dads was always rented to different college kids and they threw plenty of parties

Man, don't think I am any pro at investment properties. I'm really good at taking big piles of money and making small piles of money in general I wish I knew more, but investment wise investment properties always seem to do the best for us. We have never lost on a rental home that we have bought.

Actually a house like this one we were trying to buy would usually rent to a younger couple. Usually one is a grad student and the other is working locally. They tend to want something nicer and are willing to pay for it.

We could have got 1800 to 2200 a month for this house no problem.

 

[attitude]

Man, don't think I am any pro at investment properties. I'm really good at taking big piles of money and making small piles of money in general I wish I knew more, but investment wise investment properties always seem to do the best for us. We have never lost on a rental home that we have bought.

Actually a house like this one we were trying to buy would usually rent to a younger couple. Usually one is a grad student and the other is working locally. They tend to want something nicer and are willing to pay for it.

We could have got 1800 to 2200 a month for this house no problem.

Got it, I just pictured a bunch of shenanigans and a trashed house at the end of contract. Rent to a young couple with a kid, we don’t have time to party

 

[lakemadness]

You have to be ready to move fast and be aggressive. I was able to get a rental under contract over the weekend. Offered below list but included an escalation clause. I offered that I was willing to pay 1,750 more than their highest offer. An offer came in 5k over list. Numbers still worked for me so I took it. I still have some out from any results during inspection I don’t like. This one was listed for 1 hour before I was in and deciding what to offer.

Was 299k for a single family rental? What was rent expected to be?

Edit: saw what you thought rent could be. How do you justify those numbers? One rule I have is rent must be at minimum 1% of purchase price or value.

 

[Flying_Lavey]

Any rules against short term rental?

Yeah. Heritage doesn't allow them. I believe the shortest rental term is 6 months??

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[beaverretriever]

You have to be ready to move fast and be aggressive. I was able to get a rental under contract over the weekend. Offered below list but included an escalation clause. I offered that I was willing to pay 1,750 more than their highest offer. An offer came in 5k over list. Numbers still worked for me so I took it. I still have some out from any results during inspection I don’t like. This one was listed for 1 hour before I was in and deciding what to offer.

Was 299k for a single family rental? What was rent expected to be?

Edit: saw what you thought rent could be. How do you justify those numbers? One rule I have is rent must be at minimum 1% of purchase price or value.

Yeah, the 1% rule does have some variables like taking the condition of the home overall house appreciation of prices in the area etc (which are out of hand here). This particular house would have little operating cost, only 500.00 a year in property taxes!!!!! So abiding by the 1% rule was thrown out the window on this particular unit. We were just taking a guess as we could probably get closer to 2600 a month. It's tough to buy a 300k home and expect 3000 rent for it in general though. I just happened to look up rentals in So Cal (San Diego to be specific) and out of about the 25 I viewed and not one of them met that 1% rule ( I could see the rental price and the last sale price).

I wish we could hit that number every time we buy.

We had a town home we bought cash as a foreclosure for 70k. Put about 20k in to it and rented it for 1400 a month. But we usually don't win like that. It was right after the 2008 crash and we lucked out. We sold it for 235k four years ago too!

Perfect example here. This house is near a friend of mine. It is up for rent for under 5k a month. It sold for 550k in 98. It's worth 1.4million and still only getting 4800. a month. https://www.realtor.com/realestateandhomes-detail/6015-Hillpointe-Row_La-Jolla_CA_92037_M26354-73091

BTW, the home was set up that we could split it down the middle and get two rentals out of it and probably be closer to that 3k mark.

In general we add up all the expenses you can expect and see what cash flow you would have left. That always makes more sense for us.

 

[LargeOrangeFont]

You have to be ready to move fast and be aggressive. I was able to get a rental under contract over the weekend. Offered below list but included an escalation clause. I offered that I was willing to pay 1,750 more than their highest offer. An offer came in 5k over list. Numbers still worked for me so I took it. I still have some out from any results during inspection I don’t like. This one was listed for 1 hour before I was in and deciding what to offer.

Was 299k for a single family rental? What was rent expected to be?

Edit: saw what you thought rent could be. How do you justify those numbers? One rule I have is rent must be at minimum 1% of purchase price or value.

Your rental math does not work on the west coast and the southwest.

 

[lakemadness]

Your rental math does not work on the west coast and the southwest.

So I’ll ask, how can you justify investing in a rental in those markets?

There are other markets that provide MUCH better investments.

 

[4Waters]

I need a Republican to buy the house behind me.

 

[COCA COLA COWBOY]

Writing offers based on list price is not a good choice. Always base the offer on comparable sales. I commonly list my homes at a very aggressive marketing price to provide my sellers home the most exposure possible. Over the weekend I listed a home for $50k less than a close comparable sale. I currently have 8 offers and am expecting 3 more by tomorrow morning. Offers are at the comparable sale currently, but I believe with aggressive negotiation, this home will sell above the comps.

Use a realtor that knows the area and market. In my area, the average realtor sells 1.5 homes a year. You can't be an expert in your market if your only selling that many homes.

 

[LargeOrangeFont]

So I’ll ask, how can you justify investing in a rental in those markets?

There are other markets that provide MUCH better investments.

Personally I think it is comfort in being close to the investment, and perhaps that makes management easier. Some are playing the long game in the appreciation of the property, which is much greater than in the 1% RTV markets, generally speaking. Some of it is just not knowing there are better markets out there.

I don't think I will be investing any more into these west coast and southwest markets personally... I don't see the ROI. I was actually going to PM you about how you run/manage your investments and where you invest. I want to pick up several doors.

In my neighborhood in So Cal I'd need to put 20% down on a ~$700K house to break even on a rental. It makes 0 sense for me unless my play is waiting for more property value appreciation, which seems to be slowing down a bit here.

 

[rrrr]

Use a realtor that knows the area and market. In my area, the average realtor sells 1.5 homes a year. You can't be an expert in your market if your only selling that many homes.

That's a fact a lot of buyers and sellers ignore. I talk to people occasionally that are doing one or the other for the second or third time in their lives, and many of them say they're gonna tell the realtor how the onions fell off the truck.

If one is paying a transaction commission, finding the person that makes those deals regularly and letting them use their expertise makes a lot more sense than reading the MLS for a couple of weeks and then thinking you're equipped to make a boomer deal.

 

[beaverretriever]

Writing offers based on list price is not a good choice. Always base the offer on comparable sales. I commonly list my homes at a very aggressive marketing price to provide my sellers home the most exposure possible. Over the weekend I listed a home for $50k less than a close comparable sale. I currently have 8 offers and am expecting 3 more by tomorrow morning. Offers are at the comparable sale currently, but I believe with aggressive negotiation, this home will sell above the comps.

Use a realtor that knows the area and market. In my area, the average realtor sells 1.5 homes a year. You can't be an expert in your market if your only selling that many homes.

This is definitely true!!!

The houses that are priced lower around here end up getting multiple offers and usually go over asking. I think that was the case with the one we were going to buy.

 

[lakemadness]

Personally I think it is comfort in being close to the investment, and perhaps that makes management easier. Some are playing the long game in the appreciation of the property, which is much greater than in the 1% RTV markets, generally speaking. Some of it is just not knowing there are better markets out there.

I don't think I will be investing any more into these west coast and southwest markets personally... I don't see the ROI. I was actually going to PM you about how you run/manage your investments and where you invest. I want to pick up several doors.

In my neighborhood in So Cal I'd need to put 20% down on a ~$700K house to break even on a rental. It makes 0 sense for me unless my play is waiting for more property value appreciation, which seems to be slowing down a bit here.

I get the appreciation. Big gains won’t happen where I am. But with big gains mean big swings and you could be exposed to big losses in value. Not sure the west coast will see 2008 again, but it’s a little more risky.

Here is my ideal situation on a buy and hold:

This is for the one I just put under contract.

Purchase 131,750 cash
Rehab: 15,000 cash
Total 146,750
I can rent it for 1,600 maybe 1,700
Get a lease signed and then call my banker. This one should appraise for 175,000-180,000 based off other area comps. I’ll take a loan for the 146,750 cash I have in it. I might have to leave in few grand to hit 80% loan to value.

I like the cash on cash return of that.

Rinse and repeat, hopefully. Deals are harder and harder to find.

 

[guest hs]

Writing offers based on list price is not a good choice. Always base the offer on comparable sales. I commonly list my homes at a very aggressive marketing price to provide my sellers home the most exposure possible. Over the weekend I listed a home for $50k less than a close comparable sale. I currently have 8 offers and am expecting 3 more by tomorrow morning. Offers are at the comparable sale currently, but I believe with aggressive negotiation, this home will sell above the comps.

Use a realtor that knows the area and market. In my area, the average realtor sells 1.5 homes a year. You can't be an expert in your market if your only selling that many homes.

What happens if that backfires and it doesn't get multiple offers and gets just one for the asking price? Just asking because Im having problems selling my house in Havasu right now.

 

[lakemadness]

What happens if that backfires and it doesn't get multiple offers and gets just one for the asking price? Just asking because Im having problems selling my house in Havasu right now.

If it’s priced aggressively you’ll have the interest and multiple offers. Lack of offers means it’s not priced aggressively.

 

[guest hs]

If it’s priced aggressively you’ll have the interest and multiple offers. Lack of offers means it’s not priced aggressively.

I understand that but that's not really what I was asking

 

[beaverretriever]

I get the appreciation. Big gains won’t happen where I am. But with big gains mean big swings and you could be exposed to big losses in value. Not sure the west coast will see 2008 again, but it’s a little more risky.

Here is my ideal situation on a buy and hold:

This is for the one I just put under contract.

Purchase 131,750 cash
Rehab: 15,000 cash
Total 146,750
I can rent it for 1,600 maybe 1,700
Get a lease signed and then call my banker. This one should appraise for 175,000-180,000 based off other area comps. I’ll take a loan for the 146,750 cash I have in it. I might have to leave in few grand to hit 80% loan to value.

I like the cash on cash return of that.

Rinse and repeat, hopefully. Deals are harder and harder to find.

You are right, there is definitely some risk with big gains.

Good luck finding a house here for under 200k that doesn't require a 100k in rehab. Then good luck getting 3k a month for it once all said and done. However, if you buy a house here for 300k in a good area, in three or four years it's worth 400k.

 

[LargeOrangeFont]

I get the appreciation. Big gains won’t happen where I am. But with big gains mean big swings and you could be exposed to big losses in value. Not sure the west coast will see 2008 again, but it’s a little more risky.

Here is my ideal situation on a buy and hold:

This is for the one I just put under contract.

Purchase 131,750 cash
Rehab: 15,000 cash
Total 146,750
I can rent it for 1,600 maybe 1,700
Get a lease signed and then call my banker. This one should appraise for 175,000-180,000 based off other area comps. I’ll take a loan for the 146,750 cash I have in it. I might have to leave in few grand to hit 80% loan to value.

I like the cash on cash return of that.

Rinse and repeat, hopefully. Deals are harder and harder to find.

In my position, in that type of market, I want to just buy a near turn key deal with 20% down, pay a management company and roll with a $500+ monthly profit. Hopefully without too many issues, I'm made whole on my initial investment in 8 years or so.

I have local stuff I self manage, but I have a day job, and can't do all the work in these far away lands that yield 1% RTVs.

 

[Raffit78]

I get the appreciation. Big gains won’t happen where I am. But with big gains mean big swings and you could be exposed to big losses in value. Not sure the west coast will see 2008 again, but it’s a little more risky.

Here is my ideal situation on a buy and hold:

This is for the one I just put under contract.

Purchase 131,750 cash
Rehab: 15,000 cash
Total 146,750
I can rent it for 1,600 maybe 1,700
Get a lease signed and then call my banker. This one should appraise for 175,000-180,000 based off other area comps. I’ll take a loan for the 146,750 cash I have in it. I might have to leave in few grand to hit 80% loan to value.

I like the cash on cash return of that.

Rinse and repeat, hopefully. Deals are harder and harder to find.

Mind telling us more details about the house, area? That is an amazing return.


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[LargeOrangeFont]

Mind telling us more details about the house, area? That is an amazing return.


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It in the Midwest most likely.

 

[Holymoses]

I’m in Vegas and visit Reno often for work. I believe we will see a significant housing dip 6 months after Trump is re-elected Save that money and buy as many homes as you can when this happens My wife and I were lucky enough to pull this off between 2010-2016 and we are about to repeat when it happens again.

 

[COCA COLA COWBOY]

What happens if that backfires and it doesn't get multiple offers and gets just one for the asking price? Just asking because Im having problems selling my house in Havasu right now.

So, this situation has been litigated over and over. In real estate transactions, the seller doesn't have to accept any offer. It's not like an advertised car or widget.

There are some tricks to it, but it works more often than not.

Is your home listed with RiverDiva? I don't mind sharing all my tricks with her. If you have an old crotchety realtor, it may not be the right fit for them. Their phone will ring off the hook and it's truly a ton of work.

 

[COCA COLA COWBOY]

That's a fact a lot of buyers and sellers ignore. I talk to people occasionally that are doing one or the other for the second or third time in their lives, and many of them say they're gonna tell the realtor how the onions fell off the truck.

If one is paying a transaction commission, finding the person that makes those deals regularly and letting them use their expertise makes a lot more sense than reading the MLS for a couple of weeks and then thinking you're equipped to make a boomer deal.

The best deals are found by a realtors that over price the home. I have a close friend of mine in escrow for a home that was way overpriced at first. They rode the pricing down month after month, then we lowballed them. Seller's get tired and eventually give in.

 

[COCA COLA COWBOY]

What happens if that backfires and it doesn't get multiple offers and gets just one for the asking price? Just asking because Im having problems selling my house in Havasu right now.

Let's see this home? There can be many reasons why your not getting a response.

 

[lakemadness]

Mind telling us more details about the house, area? That is an amazing return.


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Thats in Indiana. Happens to be one of the better rental markets around. (for that approach)

 

[Checkmate21]

In Culver City Ca the dirt goes for around $650 per square foot. In Venice Ca, it is around $1,300 per square foot. At about 1.25% property tax rate, just think what your property taxes would be per year, if you bought at today's prices.

 

[Havasu blue label]

Namba who is your realtor

 

[beaverretriever]

I’m in Vegas and visit Reno often for work. I believe we will see a significant housing dip 6 months after Trump is re-elected Save that money and buy as many homes as you can when this happens My wife and I were lucky enough to pull this off between 2010-2016 and we are about to repeat when it happens again.

Yeah, the good thing is my wife and I are not in any kind of hurry. There really isn't much here or Boulder City where we are trying to buy a small place. I really wonder what is going to happen during the next year. I am in luxury item sales so I am a little worried about my business during election year. It always hurts me a little. And what the hell, it always seems like there is an election going on.

 

[evantwheeler]

I get the appreciation. Big gains won’t happen where I am. But with big gains mean big swings and you could be exposed to big losses in value. Not sure the west coast will see 2008 again, but it’s a little more risky.

Here is my ideal situation on a buy and hold:

This is for the one I just put under contract.

Purchase 131,750 cash
Rehab: 15,000 cash
Total 146,750
I can rent it for 1,600 maybe 1,700
Get a lease signed and then call my banker. This one should appraise for 175,000-180,000 based off other area comps. I’ll take a loan for the 146,750 cash I have in it. I might have to leave in few grand to hit 80% loan to value.

I like the cash on cash return of that.

Rinse and repeat, hopefully. Deals are harder and harder to find.

Where are people paying $1700 in rent on a house worth $180k!?! What are the mechanics keeping them from being owners/buyers? This makes absolutely zero sense to me from the renter's side of the fence. They should be into a mortgage for half of their rent payment. From your side of the fence, you're laughing all the way to the bank every month.

 

[LuauLounge]

Folks rent because they don’t want to commit. We sold one place moved to a different area and rented, bought a year later.
Just bought a place in Vegas to escape California, but not sure about the timeline for a breakout.