Market Conditions in 87114>Question Details

CRM, Both Buyer and Seller in Albuquerque, NM

Buy or Sell investment property?

Asked by CRM, Albuquerque, NM Tue Jun 30, 2009

I am having a major disagreement with one of my partners. I hold 25% ownership and my partner 50%, the other 25% is held by a partner who preferred not to get in the dispute.
We bought a nice property on the west side (87114) and it has been rented for a year. The tenant is willing to extend the lease for two years but our partner is evicting the tenant and putting the house in the market claiming the market will keep going down and that there is a window to sell the house now and break even. He claims the issue is due to the new regulations, as of May 1st, in which neither buyer nor seller have control over the property appraisal.
Any comments will be greatly appreciate it.
Rgds,
CR

Help the community by answering this question:

Answers

2
There IS new-er regulation regarding appraisals, you can google it "HVCC appraisal regulations or new laws", this is something that is affecting buyers, however any lender who has been in the business for a while can work through these issues. It has to do with appraisals being assigned to a new lender should the buyer be "shopping" for a loan (which most are).

It's no secret, all around the country prices ARE dropping & are going to continue to drop in many many areas. I do believe the Major Price Depreciation is over though, prices have already dropped as high as 70% in some areas. I suggest you get an opinion from 3 different Realtors in you area regarding value. Find out how much the property has dropped in value in the past year, the past 6mos, the past 2mos. or more to the point, since you purchased it.

Also go to http://www.realquestinvestor.com See what else around your property is in Pre-Foreclosure OR heading to auction OR already Bank Owned. If TONS of flags pop up, you can be assured that your property will continue to drop in value, from your current break even point.

Are you not all on title? If you are ALL on title & 1 of you wants to sell, he/she can't unless you ALL agree to sell.

If you can sell & break even, seriously consider doing it, based on what the Realtor says the value is now & how drastically it has dropped since you purchased it. Buy again in 1year, build your equity back up from there.

I can refer you to an agent in that area if you like.

emilyknell1@yahoo.com
1 vote Thank Flag Link Tue Jun 30, 2009
There are arguments for both sides, but you have to decide which side outweighs the other. I own rental properties and represent investors. I am currently looking for and recommending buying rentals right now. The reasons are that even though we might see a little more drop in value, I don't think it is going to be that much more here in Albuquerque, although the west side will probably take more of a hit than the east side. If your partner wanted to cut and run, why didn't he sell last summer? I think most of the drop is in now and we will begin to stabilize. We are also at the bottom of the interest rate valley, so if you have a locked low rate loan on the property (or can get one) , then holding it is a great inflation hedge - which I expect simply because the value of the dollar can not hold with the printing presses on overtime! It may not be this year, but it is coming, and what better way to be prepared than to have a locked loan under 6%, giving you plenty of flexibility. You can hedge against inflation with precious metals, but real estate can also work. I also happen to think the rental market will remain pretty strong and then housing demand has no choice but to eventually return - the brakes have been slammed on production (building) in this country, while household formation has not changed much at all! As the recession recedes, families will not be doubling up as much, and there will be a noticeable pent up demand that must be satisfied, which can not be satisfied over night - it will take time to ramp residential production back up. So, in my opinion, if your partner wanted out, he should have done so before before last year - before riding down this much. If you have good tenants willing to stay another two years, I would surely hold that house - you might even consider buying your partner out so he can pack it all in and run for the hills (if he's right, we might all wish we did that). Call me anytime to discuss in more detail. Best of luck to you CRM!
Oh yeah, the new appraisal guidelines are causing some issues, but they will be ironed out - they should definitely not play into the decision of whether or not to hold this property in any way!
0 votes Thank Flag Link Wed Jul 1, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer