I am working with this charming couple who want to buy a home as an investment property. They want to take advantage of the great housing prices. And, they want to increase their investment portfolio. They heard real estate was a great way to do this.
The wife, Carrie, has some interesting ideas about her future rental home. But before she shared them with me, she asked if I had any experience in buying rental property. "Yes. Yes I do." I replied.
Before I could elaborate with a smidgen of knowledge I happen to have on this topic, I found--and this really wasn't a shock--that any experience I might have in purchasing a rental property was completely unwanted. (And, I should clarify this. I am not being arrogant. She asked my opinion. It is what I do for a living.)
Additionally, before I could provide her any opinion I became aware that whatever my experiences happen to be, she was pretty sure they are completely unrelated to: 1) what she wanted to buy and 2) who she wanted to rent from her.
Carrie doesn't want a sale that will be a "hassle." So, please! Absolutely no short sales or bank owned properties.
I know there are few of you right now who are laughing hysterically at that one, so I will pause here while you compose yourself. Take your time... There... all better?
For those of you who are completely out of the loop on that line of humor, in the Phoenix metro area, pretty much everything for sale is a bank owned property or a short sale.
Carrie doesn't want anything that needs any work. She wants major upgrades, like granite counters and cherry wood cabinets, because she doesn't want to "invest" in these extras later. She doesn't even want to change the paint colors, so we will need to add into any contract we write that the willing seller will paint the home the color to match Carrie's specifications.
There are many other things Carrie wants that I know through the school of experience she is about to learn aren't going to happen. Some of them are related to buying an investment home. I am curious how it will go when she screens renters.
A loan officer friend once said he refuses to help first time investors. In his words, they have usually read half a chapter of the latest make-money-in-real-estate book and decided purchasing a rental property is a breeze. His opinion is to let these first-time investors cut their teeth with some one else who may give them brilliant advice, but they won't listen. And, next time they are ready to buy, he will snatch them up. I have always seen the wisdom of his decision. Even if I did agree to represent this couple.
The biggest issue I see with Carrie is that she is still in the dreamy fantasy stage of investing. I will help her pick a home that I think will suite them for their purposes. However, I will do this through providing her facts and statistics, not personal experiences. It isn't time. She isn't ready.
Wednesday, January 20, 2010
Subscribe to:
Post Comments (Atom)
1 comment:
Lately, I've had the same problem with people not wanting to take my advice, even when it comes from personal experience. I recently had a client tell me he saw a FISBO listed at $380,000. He has his house listed at $99,000 and although he's looking for an upgrade, that seems a bit much of an upgrade. He told me he spoke to the couple and they would be willing to negotiate, even do a short sale if necessary. I asked him what mortgage payment he felt comfortable paying. He said $700 or $800. He reminded me that the couple was willing to negotiate. I think the result is predictable but yet my advice is not to be trusted at this point.
Post a Comment