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Old 09-13-2017, 03:09 PM
 
Location: Silicon Valley
3,683 posts, read 9,858,753 times
Reputation: 3016

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Quote:
A house in Sunnyvale just sold for close to $800,000 over its listing price.

Your eyes do not deceive you: The four-bed, two-bath house — less than 2,000 square feet — listed for $1,688,000 and sold for $2,470,000.

Bay Area housing: Sunnyvale home sells $800,000 above asking
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Old 09-13-2017, 03:48 PM
 
Location: Riverside Ca
22,146 posts, read 33,513,828 times
Reputation: 35437
If someone offered me that kind of money for my rentals I would be selling in a heartbeat
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Old 09-13-2017, 04:18 PM
 
455 posts, read 578,373 times
Reputation: 383
damn
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Old 09-13-2017, 04:28 PM
 
169 posts, read 232,745 times
Reputation: 116
They listed below market price. They expected about 2M. So about $400k over the target price.
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Old 09-13-2017, 07:14 PM
 
28,115 posts, read 63,651,739 times
Reputation: 23263
Yep... amazing market right now that is busting all projections.

There is money out there plus desire to support these prices at the moment.

Keep hearing rents are too high but when single family homes set record prices with multiple overbids the rent needed wouldn't even come close to covering cost of mortgage, taxes and insurance...
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Old 09-13-2017, 11:01 PM
 
Location: South Bay
7,226 posts, read 22,190,547 times
Reputation: 3626
Quote:
Originally Posted by Ultrarunner View Post
Yep... amazing market right now that is busting all projections.

There is money out there plus desire to support these prices at the moment.

Keep hearing rents are too high but when single family homes set record prices with multiple overbids the rent needed wouldn't even come close to covering cost of mortgage, taxes and insurance...
Rents are high, but they don't appear to be in line with sales prices. If I were to have purchased the home I signed a lease on 6 months ago, the mortgage (PITI) would have been at least 50% more than my current rent, probably closer 75% more. And this is assuming a 20% down payment. I have a house in LA that I'm renting out and the rent vs mortgage disparity there is nowhere near the level here in Silicon Valley.
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Old 09-14-2017, 08:55 PM
 
Location: Silicon Valley
7,644 posts, read 4,593,440 times
Reputation: 12708
Quote:
Originally Posted by BRinSM View Post
Rents are high, but they don't appear to be in line with sales prices. If I were to have purchased the home I signed a lease on 6 months ago, the mortgage (PITI) would have been at least 50% more than my current rent, probably closer 75% more. And this is assuming a 20% down payment. I have a house in LA that I'm renting out and the rent vs mortgage disparity there is nowhere near the level here in Silicon Valley.

Agreed...bought rentals in the recession at less than 10x annual gross rents, now I could sell at nearly 30x. Didn't plan on becoming a landlord, but realized I could buy and rent, pay HOA, property tax, insurance and a 15 year mortgage and break even.

Granted, I suppose I should raise rents at some point. I mean, I haven't had a vacant month....ever....at any of the units, but all my tenants seem to have understood the verbal addendum to my contract. I'm not handy. Don't call me to change the lightbulb. I'm busy and if we don't talk, I'll likely even forget to raise the rent.

Lowest is a 2 bed/2 bath 1000 sf condo with a big balcony overlooking the pool. Appliances including w/d were from 2009-2011, but I did put in quality ones and the unit had lots of upgrades already when I bought it. 2 assigned parking spots. No a/c, but with vaulted ceilings and big windows. Last turn saw me greedily raise rent from $1500 to $1600. The response was....overwhelming. Felt bad for the last tenant. He told me he got an out of town job, and then found out a week later his job migration wasn't going to happen. I'm sorry, I told him....I've already rented it. Tough day for the guy.

Anyway, I should just sell them. The valuations are nuts.
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Old 09-15-2017, 08:22 AM
 
28,115 posts, read 63,651,739 times
Reputation: 23263
The valuations are off the chart...

My own question is what to do with the gains/taxes.

I've sold a few investment properties over the years and would have done better staying the course and not selling on some... especially the one where I cashed out...

The others were 1031 Exchanged into commercial property with professional management and have done well... having the business side of things removed is mixed... no one ever calling me for anything but the decision/timing to sell etc. is out of my hands too.

A very wise lifetime investor told me to NEVER sell... and it has worked well unbelievably well and owns port property, commercial, warehouse and a little retail... he also told me he has no interest in every owning investment property with beds... and prefers the business to business dealings of non-residential.

My average tenant has been with me 13 years...

Last edited by Ultrarunner; 09-15-2017 at 09:08 AM..
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Old 09-15-2017, 03:41 PM
 
93 posts, read 130,686 times
Reputation: 196
Listing price is meaningless, if they listed $1 million lower then the headlines would read "Sunnyvale house sells for $1.8MM over asking". Media is running out of stories so they make some up. Listing price is meaningless!! Everyone knows that!!!
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Old 09-20-2017, 09:10 AM
 
Location: Paranoid State
13,044 posts, read 13,861,555 times
Reputation: 15839
Quote:
Originally Posted by Ultrarunner View Post
The valuations are off the chart...

My own question is what to do with the gains/taxes.

I've sold a few investment properties over the years and would have done better staying the course and not selling on some... especially the one where I cashed out...

The others were 1031 Exchanged into commercial property with professional management and have done well... having the business side of things removed is mixed... no one ever calling me for anything but the decision/timing to sell etc. is out of my hands too.

A very wise lifetime investor told me to NEVER sell... and it has worked well unbelievably well and owns port property, commercial, warehouse and a little retail... he also told me he has no interest in every owning investment property with beds... and prefers the business to business dealings of non-residential.

My average tenant has been with me 13 years...
There are a couple ways to look at it.

From the point of view of an individual investor, never selling means your portfolio becomes unbalanced -- too real estate heavy and too light on other asset classes. From the point of view of a portfolio, most of the returns to the portfolio are a result of the asset allocation rather than the individual selection. That is, most of the returns of the portfolio are based on choosing the appropriate % of the total invested into each of the various asset classes: real estate, large cap domestic equities, mid-size domestic equities, small-cap domestic equities, international developed, emerging markets, MLPs, commodities, etc. Over time, re-balancing the portfolio by selling some of the winners and buying some of the laggards is a known strategy to achieve long-term risk adjusted returns that are on the efficient frontier -- that is, maximizing returns for a given unit of risk.

From the point of view of operating a business -- and when you are a landlord directly you are operating a business -- cash flow is king. It isn't about optimizing a portfolio when you operate a business.
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