Overpriced… - Posted by JPiper
Posted by JPiper on January 22, 2000 at 20:09:21:
Let?s refigure your numbers based on some reality.
Gross income is $21,720?or $1810 per month
Expenses (including taxes, insurance, deferred maintenance) are at least $635. I?d probably use a higher number?but let?s use this for illustration.
Net Operating Income $1175.
Now let?s say you find yourself an investor who can put down 10% ($20K)?and finances $180K at 8% for 30 years. This guy has got excellent credit by the way.
Debt service is $1320 per month. In other words, this guy is going to LOSE $145 per month for the privilege of putting $20K in your property! Does this help you to understand your lack of offers.
Now let?s figure it assuming you sell at $180K?with $18K down, financing $162K. This deal basically breaks even?and requires $18K down. Will anyone do it? Good question?.personally, I think most of us have something better to do with $18K.
Maybe you can convince someone that the expenses aren?t $635. Perhaps they?ll believe you when you say your expenses are only $386?.utilities making up $253. But chances are that anyone who?ll believe that story doesn?t have $18K left!
Now let?s look at that elusive owner occupant that Mike M. wants you to find. He?s going to live in the two bedroom?.so I?m going to assume (since you don?t specify the rental for the 2 bed) that your rent drops to about $1300. Let?s say your expenses are now $455 (including taxes and insurance). That means NOI is now $845.
Assuming you do Mike M.?s financing?the payment is $1646. This means your owner occupant is living in a 2 bed apartment, managing 3 one bed?s, and paying $800 for the privilege. I doubt it?.I?d say this isn?t going to happen?but then again, I don?t know your market.
My guess is that you?ve got this property well overpriced?.which would explain the lookers, but few offers. Further, it may be that based on the level of rents that the area isn?t the best either.
From everything I hear Seattle is a hot area. I would think your property would move if you had it reasonably priced. My suggestion would be to reevaluate the comps.
By the way, a property is worth what the comps dictate and buyers are willing to pay?.it?s not going to be worth more because you want it to be?not now?and not in 2 years.