Should Equity Seller Even Be Listing Now?

[SK in CV]

[quote=bearishgurl] At those prices, USD students aren’t usually heavy party animals.[/quote]

Times have changed. When I was in college they were way crazier than us Aztecs. Confession, if they went, took hours and hours. And that was the guys. Women, even longer.

[SD Realtor]

Armed with the additional information it sounds like you have a good plan. Your long term path to wealth appears to be through equity trading and you happened to enjoy extraordinary appreciation this year which will be close to impossible to duplicate. Thus your plan to invest your procreeds in something with which you are more comfortable with makes sense for you.

RE in general is a slow plod unless you are good at flipping
. In my case I lose when I venture to equities so the RE path works for me but that is just me. I would point out to you that leveraging in RE is easy and raising cash in what is a phenomally low environment may be something for you to consider. Given the significant appreciation it would seem you could cash out refi and then keep the asset and raise funds for equity but this is a bit riskier and is not for everyone.

Best of luck.

As for transaction costs you can easily predict them as lidting agent commission plus selling agent commission. Then add another half to one percent of sales price for othernon recurring fees.

[bearishgurl]

[quote=SK in CV][quote=bearishgurl] At those prices, USD students aren’t usually heavy party animals.[/quote]

Times have changed. When I was in college they were way crazier than us Aztecs. Confession, if they went, took hours and hours. And that was the guys. Women, even longer.[/quote]

LOL, that was back when FT USD undergrads paid ~$2700 semester and FT SDSU undergrads paid ~$200 per semester! (Yes folks, that’s hundreds.)

Now, FT USD undergrads pay nearly $21K per semester, graduate school students pay over $1300 per credit hour and FT law students pay $46K per (nine-month) year (tuition/fees only).

Since we’re now discussing “real money” here, today’s students are likely to get “cut off” by parents in a flash (and certainly cut from any scholarships they are on) if they party so much that they’re getting D’s, F’s and incompletes at a college such as USD. Additionally, there are too many qualified students whose applications to both institutions were turned down and who would be only too happy to take the slot of a “non-performing party animal.”

Indeed, it’s a new world, now.

[flyer]

As a long-time real estate investor, I agree with the comments concerning holding all of the property you possibly can on an indefinite basis.

Although we’re in our 50’s, we started investing in San Diego and elsewhere almost 30 years ago, and, although there have been ups and downs, we hung in there.

Like many real estate investors, we eventually want to be able to turn everything over to our kids, and, IMO, that is why much of the “trophy real-estate” in places like San Diego rarely goes on the market for anything other than a stratospheric price. Of course, there will always be a few exceptions.

In my circle of people who have lived here for many years, it has been handed down from one generation to the next, and I think that will continue here, and in many locations going forward.

[bearishgurl]

[quote=flyer] . . . Like many real estate investors, we eventually want to be able to turn everything over to our kids, and, IMO, that is why much of the “trophy real-estate” in places like San Diego rarely goes on the market for anything other than a stratospheric price. Of course, there will always be a few exceptions.

In my circle of people who have lived here for many years, it has been handed down from one generation to the next, and I think that will continue here, and in many locations going forward.[/quote]

Thank you for this post, flyer.

I’ve been trying to tell members of this forum for years that there are many thousands of families in this state who have the same goals (of handing down their acquired CA RE portfolio to subsequent generations) as you do. This practice has had and will have the effect of keeping a good portion of the best-located residential properties permanently off the market.

For each successive year that Props 58 and 193 remain on CA’s books, more and more properties will be handed down. In any case, if wholesale or piecemeal repeals of these sections ever get before the Legislature, those soon-to-be affected owners will simply hand down their affected properties early … prior to their deaths ;=]

If any Pigg is dreaming of buying a coastally-located “trophy house” in the far future (after liquidating their “working class” rental portfolio), I would suggest they immediately sell one or more investment properties, if necessary, and actively shop for that “dream trophy house” now.

There are very few, if any, “fixer” view trophy houses available in coastal SD anymore but that is what I’m advocating buying today if at all possible, short of a structurally-damaged home costing more than $30K to fix properly (unless the buyer has deep pockets and bought way under market value).

Based upon only the listing photos, I think jpinpb just posted a listing which could be made a “trophy house” with a <$50K investment after COE, IMHO. http://piggington.com/about_as_crazy_as_ever#comment-229115

The "bones," lot and view on it are very, very good. They are out there ... but rare. The only reason this one is out there is because either none of the "heirs" wanted it or there were no heirs.

I just checked the SD Assessor site and the current taxes on it are currently $733 year.

If there ARE heirs, none of them must have the ability to buy the other(s) out or don't want to. It is a shame that the $733 annual tax will be lost forever upon sale. This is precisely the reason that the vast majority of similarly-situated properties will never hit the market.

[ltsddd]

Adame99,
I am not sure if anyone has mentioned this already. But if I were you, and IFF you have the desire to be a landlord, then why not do the following:

1. Keep the property as a rental AND
2. Extract as much equity as you could/want out of it and use it for stocks trading.

By doing this you’ll get the $$ you need for stocks and at the same time own a rental and avoiding paying the gain you would have from the sale of property.

BTW., let’s go BRCM!

Good luck.

[Adame99]

[quote=ltsdd]Adame99,
I am not sure if anyone has mentioned this already. But if I were you, and IFF you have the desire to be a landlord, then why not do the following:

1. Keep the property as a rental AND
2. Extract as much equity as you could/want out of it and use it for stocks trading.

By doing this you’ll get the $$ you need for stocks and at the same time own a rental and avoiding paying the gain you would have from the sale of property.

BTW., let’s go BRCM!

Good luck.[/quote]

Thanks. That is probably the smart thing to do, but I don’t think I’m built for it. I’m very much risk-averse and generally hate carrying any debt, even if it can be invested profitably.

I generally pay off my cards every month. I also never had student debt, despite getting multiple degrees. I used to always say that money comes and goes, but debt stays.

(Actually, maybe I’ve become old-fashioned since now the government is bailing everyone out. I guess debt also comes and goes in this new economy).

[no_such_reality]

Adame, if you really don’t want to try the landlord thing I would probably sell, and sell now. The market for right priced houses is hot. It might still go higher but it could also cool quickly and already shows signs of doing so.

I wonder where the tipping point is myself, at what point do the prices go up high enough that the seller volume comes back? That’s a primary driver on the mania right now is insanely low level of inventory.

That said, in interest of keeping the property, what about a property management firm? Could it cash flow with a PM in place? If not, then sell, IMHO.

[SK in CV]

[quote=no_such_reality]Adame, if you really don’t want to try the landlord thing I would probably sell, and sell now. The market for right priced houses is hot. It might still go higher but it could also cool quickly and already shows signs of doing so.

I wonder where the tipping point is myself, at what point do the prices go up high enough that the seller volume comes back? That’s a primary driver on the mania right now is insanely low level of inventory.

That said, in interest of keeping the property, what about a property management firm? Could it cash flow with a PM in place? If not, then sell, IMHO.[/quote]

I don’t disagree with the conclusion here, but seller volume IS back. Houses are going onto the market close to as fast, maybe faster, than they have for any time in the last 3 years. They’re just selling faster. Conventional sales volume is up quite a bit.

[Adame99]

Interesting. So I just discovered that realtors can place a home on the MLS for agents only, or for all the public. That was why my place wasn’t showing up on Redfin and the other sites.

After it got changed to public, it showed up on Redfin, SDLookup, and Zip Realty within ten minutes, but it’s still not showing up on Trulia, Zillow, and Realtor.com.

For me, part of this sale process is actually getting the place sold. The other part is the learning process – seeing what I can learn for the future.

If anyone cares, the sale process is going pretty much as expected. Offer prices are in reverse order of offer strength: Cash at lowest, VA seems to be at highest, with other stuff in the middle. Everyone has offered at full price or higher. Nobody has really surprised me with their offer (i.e. nobody came in 20% over list or anything crazy like that). Just sitting back and countering offers and keeping my options open and wondering what May will bring.

[SD Realtor]

When a realtor enters the listing onto the MLS there are entry fields in the listing template that allow for 3rd party distribution. Most realtors by default always allow for this. You may want to query your realtor about why they did not.

[CA renter]

[quote=SD Realtor]When a realtor enters the listing onto the MLS there are entry fields in the listing template that allow for 3rd party distribution. Most realtors by default always allow for this. You may want to query your realtor about why they did not.[/quote]

Yep. I’d be seriously pissed (to the point of making it a legal matter or negotiable issue with the broker) if my realtor did this without my permission.

[Adame99]

[quote=CA renter][quote=SD Realtor]When a realtor enters the listing onto the MLS there are entry fields in the listing template that allow for 3rd party distribution. Most realtors by default always allow for this. You may want to query your realtor about why they did not.[/quote]

Yep. I’d be seriously pissed (to the point of making it a legal matter or negotiable issue with the broker) if my realtor did this without my permission.[/quote]

Oh, I wasn’t pissed. It was accidental. She fixed it as soon as I pointed it out (I had called Redfin to ask why they weren’t showing it and that’s how I learned it was set to realtors-only).

Anyway, for me this is all a learning experience as much as it is about money. Besides, I seriously doubt I was harmed by a two-day seller-side delay in a rising market.

[FlyerInHi]

I think that in a rising market, the listing agent wants to be the selling agent as well (or at least someone in her office).

Where I was looking to buy, earlier this year,I couldn’t get any offer accepted until I went directly with the listing agent. The buyer’s realtor I had used before was totally useless.

It kinda makes sense to me. If it’s an easy sale with multiple offers for the listing agent, she wants to maximize her commissions.

[CA renter]

Call my cynical, but I highly doubt it was accidental. And you could have been harmed if you had accepted an offer within that two-day window.

Nonetheless, I’m glad you caught it and asked her to fix it. Good luck with your sale; it’s a good time to be a seller.

[Author]

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