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Thread: Dumping Home. Some questions.

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    Default Dumping Home. Some questions.

    I am thinking of selling my townhome just to get out now and see what the market does. Iím moving into a rental with my GF in 2-3 months and wonít be planning to buy another place for 18-36 months. Unfortunately I have a tenant in the place with ten months left on the lease. How hard is it to sell with an existing tenant in peoples experiences? How much extra should I expect to have to discount as this obviously makes the sale harder? Also currently there are two other units listed for $260k, and likely arenít moving. How low do you guys think I might have to go to sell in this market? Does $230k sound achievable? The unit is in Coventry station.

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    We have a very successful resident realtor here (and another one with some lofty goals and a rich wife), both of whom would probably be more than happy to have a chat with you about this.

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    GL is all I can say
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.

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    I've seen a fair number of listings that just put existing tenants and such. Depending on if its a real estate investor they may want a tenant in place because its guaranteed income (though depends on rent vs price of the place)

    Alternatively just talk to your tenants and see if they'd be willing to move out if you give them a chunk of change. It's a renters market so they'll have lots of options. I would avoid discounting the place just for having tenants when you could just offer them a few grand and/or pay a moving company for them to get out. Just do 2 or 3 months possession for the new owners and that gives your tenants adequate time to line something else up.
    Last edited by pheoxs; 06-09-2020 at 10:48 AM.
    Nolan

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    Quote Originally Posted by cjblair View Post
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    We have a very successful resident realtor here (and another one with some lofty goals and a rich wife), both of whom would probably be more than happy to have a chat with you about this.
    GOLD.

    Quote Originally Posted by pheoxs View Post
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    I've seen a fair number of listings that just put existing tenants and such. Depending on if its a real estate investor they may want a tenant in place because its guaranteed income (though depends on rent vs price of the place)

    Alternatively just talk to your tenants and see if they'd be willing to move out if you give them a chunk of change. It's a renters market so they'll have lots of options. I would avoid discounting the place just for having tenants when you could just offer them a few grand and/or pay a moving company for them to get out. Just do 2 or 3 months possession for the new owners and that gives your tenants adequate time to line something else up.
    The tenant situation could be tricky.

    On one hand, it's nice to have them there to support the place while it's on the market and with how things are, who knows how long that could be. On the other, having an existing tenancy may deter some buyers that want to either live there themselves and/or a quicker possession; I wouldn't want to miss a buyer in this market that wants a quick possession but you can't due to the tenant.

    Depending on your relationship with the tennant, I'd be upfront and communicate your plans to them as soon as possible. IIRC, the tennancy survives a sale, so if they don't want to cooperate, there's really SFA you can do about it until the lease is up; I think coming up with some sort of conditional compensation plan in the event of a sale would be your best bet... and get it in writing.

    GLWS.

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    Sell to tenant privately? Good broker and lawyer can do up a vendor take back, no down, no (extra) risk to you. If you don’t need the cash today it gets a buyer locked in at today’s prices.

    If sale price and rent makes sense can alternatively market it as investment property. It’s right in the perfect market space for a rental so why not?

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    I don’t think it’s going to be possible to sell to my tenant unfortunately. I know I can’t kick him out either which is completely fair. I’m gaining basically nothing right now, I’m putting $1630 into all my costs right now and getting $1280 in rent which is of course also taxed. I could hang on and sell it when his lease is up next March which would also be close to the mortgage renewal but I fear of the market tanking as well.

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    I don’t think it’s going to be possible to sell to my tenant unfortunately. I know I can’t kick him out either which is completely fair. I’m gaining basically nothing right now, I’m putting $1630 into all my costs right now and getting $1280 in rent which is of course also taxed. I could hang on and sell it when his lease is up next March which would also be close to the mortgage renewal but I fear of the market tanking as well.
    Depending on your interest rate you could also consider refinancing it. You might have more than the penalty is and reduce your costs if you have a higher rate.
    Nolan

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    I don’t think that segment is going to see much downside... $600-$800k, single detached... yes... but a sub $300k townhouse? Shit, two applications with $13k between them and a couple $40-$50k incomes and it’s easy qualifying still... and that’s IF the other two insurers follow cmhc

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    Quote Originally Posted by pheoxs View Post
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    Depending on your interest rate you could also consider refinancing it. You might have more than the penalty is and reduce your costs if you have a higher rate.
    I’ve been getting absolutely fukt by rates since day one but the principle is quite low so I don’t pay much interest.

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    If you list as a rental unit with a current tenant you will severely limit your buyers whereas if you list as a vacant unit you will get the buyers who want to live in it and you would still get the revenue property buyers because realistically theyre not going to pass on a deal because theres not a tenant in there. If i was buying a revenue property now i would want to choose my own tenant and not take the risk of one thats already in there.
    Quote Originally Posted by Mitsu3000gt View Post
    and I did not have the only say in the matter (most people just want it done ASAP and don't care about quality).
    Quote Originally Posted by Mitsu3000gt View Post
    If anything we made a better decision because we had a consensus and were all on the same page.

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    Give your tenant a reason to walk away.
    $5,000 cash in moving/ inconvenience fee, problem solved.

    I did this years ago when I sold my condo which was being rented. Informed the tenant I was going to be listing the place and said you can totally live here, but I will require you to let people see the unit with 24 hours notice.
    OR take this $X,XXX and we will terminate the lease.

    Had them sign some papers stating the agreement and away we went.

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    Ok sounds like I should either pay him to leave or else wait till his lease expires which would also be close to the mortgage renewal.

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    Did you consider asking your gf to move in with you instead and pay part of the mortgage? This way you still have equity (hopefully), and then sell the house once the tenants lease is up or if and when the market is better.
    Last edited by Clever; 06-09-2020 at 01:41 PM.

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    Quote Originally Posted by Clever View Post
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    Did you consider asking your gf to move in with you instead and pay part of the mortgage? This way you still have equity (hopefully), and then sell the house once the tenants lease is up or if and when the market is better.
    She refuses as her commute to downtown on public transit would be too long for her, and to be honest there’s not enough parking for my personal and company vehicles either. This is also complicating our search for a rental ahah.

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    Ok sounds like I should either pay him to leave or else wait till his lease expires which would also be close to the mortgage renewal.

    I would find out what your penalty is first, sounds like it won’t be much of anything if it’s up for renewal soon.

    I would also have a conversation with your tenant, explain what your intentions are, honesty is always appreciated by anyone.

    They may be fine with cancelling the lease early.

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    Just checked and it’s $1290 to break the mortgage as of today.

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    Just checked and it’s $1290 to break the mortgage as of today.
    Offer your tenant (or gf) a lovely orange KitchenAid mixer with a lot of attachments. Bribery works. 100% Proven.

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    Just throwing this out there. If your tenant is interested you could maybe do a private deal with them. Check with someone to make sure this is legal and this is a weird thought.

    1) If you are targeting $230k you would be about $11,445 with real estate fees and your net after the mortgage penalty would be $217,265
    2) If the tenants are interested but can't afford the down payment. Maybe reverse the numbers and say sell it to them for $243k and "gift" them 5% down at the time of closing (this part I'm not 100% sure how it would be structured or legality of it as it's kind of zero down/cash back mortgage in cmhc's eyes potentially - maybe a mortgage broker can answer you better on this or even a realtor might have seen this happen) and you would net $229,560 after the mortgage penalty. So win win for both potentially...

    Of course you can structure the numbers however you want. But I went with a number that's kind of in your favor and is still lower than the other units prices.

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    Quote Originally Posted by ercchry View Post
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    Sell to tenant privately? Good broker and lawyer can do up a vendor take back, no down, no (extra) risk to you. If you don’t need the cash today it gets a buyer locked in at today’s prices.

    If sale price and rent makes sense can alternatively market it as investment property. It’s right in the perfect market space for a rental so why not?
    Quote Originally Posted by s2k_boi View Post
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    Just throwing this out there. If your tenant is interested you could maybe do a private deal with them. Check with someone to make sure this is legal and this is a weird thought.

    1) If you are targeting $230k you would be about $11,445 with real estate fees and your net after the mortgage penalty would be $217,265
    2) If the tenants are interested but can't afford the down payment. Maybe reverse the numbers and say sell it to them for $243k and "gift" them 5% down at the time of closing (this part I'm not 100% sure how it would be structured or legality of it as it's kind of zero down/cash back mortgage in cmhc's eyes potentially - maybe a mortgage broker can answer you better on this or even a realtor might have seen this happen) and you would net $229,560 after the mortgage penalty. So win win for both potentially...

    Of course you can structure the numbers however you want. But I went with a number that's kind of in your favor and is still lower than the other units prices.
    If only one already suggested this...

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