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Cover letter if the owner is an insurance company?

Anonymous

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I am wondering if writing a cover letter for an offer is still a good idea if the owner of the property is an insurance company or a business entity as opposed to an individual. If so, is it in bad form to mention the downturn of the economy and real estate prices? (BTW, this property is in Hawaii where the real estate market has taken a real beating) I am considering offering 10% less than the already reduced listing price.
 
QUOTE (Vancouver @ Sep 14 2008, 04:57 PM) I am wondering if writing a cover letter for an offer is still a good idea if the owner of the property is an insurance company or a business entity as opposed to an individual. If so, is it in bad form to mention the downturn of the economy and real estate prices? (BTW, this property is in Hawaii where the real estate market has taken a real beating) I am considering offering 10% less than the already reduced listing price.
keep it professional .. it will get noticed if you state the facts (and not emotions or half-truths)

Where in Hawaii ?
 
QUOTE (thomasbeyer2000 @ Sep 14 2008, 07:34 PM) keep it professional .. it will get noticed if you state the facts (and not emotions or half-truths)

Where in Hawaii ?

Thank you- if you have any suggestions, I am a sponge. I am interested in Maui. (I have stayed in a suite in the building before so I am familiar with its location) I still have to do alot more investigation before making any offers but I thought I`d ask my question first. This is the realtor`s reply when I asked how motivated the seller is:

"The current owner is an insurance company that obtained the property on 1/19/07 at a sales price of $1.060M. The insurance company is holding the property, but is not interested in keeping it on their books. The condo has been assessed at $919k, and the list price of $615k indicates the owner`s motivation to sell." Of course, all properties have decreased significantly across Hawaii. I still have to analyze the numbers before pursing further action.
 
Are you purchasing this condo in Hawaii as an investment, or as a get away during the winter months and hope to rent out to other tourists during the busy season??

At $600K you will need a minimum of $5000/month in rental income to cover expenses.

I`m thinking there may be better options out there???
 
QUOTE (C2Ventures @ Sep 15 2008, 02:32 PM) Are you purchasing this condo in Hawaii as an investment, or as a get away during the winter months and hope to rent out to other tourists during the busy season??

At $600K you will need a minimum of $5000/month in rental income to cover expenses.

I`m thinking there may be better options out there???

That`s a very good point. I would only move forward the balance of cash flow and upside are more favorable than what I can find in Canada. Any offer I write will be a "lowball" one Of course, I would be happy if I could get away for a few days in the winter but at this stage in my life, I don`t have the financial luxury of purchasing a property for my own recreational use. From the statements I have seen so far and will have to research further, suites are full about 74% of the time and the rental incomes I`ve seen from other suites fit the 8-10% rule. I am hoping the economic trend will create even better market conditions for me to purchase. I am still unsure how the current news about Lehmans and the downward trend of the US economy will affect Hawaii.

In due course, I will find an area to specialize in. I am still "finding myself" in what type(s) of property and what region suits my situation best.
 
You could buy 2-3 cashflowing homes in an Alberta top 10 town for the same price as a Hawaii condo that is vacant 26% of the time. I guess a lot will depend on your long term goals and how much down payment capital you have available to get started.

This is a great time to be buying well-selected Alberta properties, so as you mention, pick an area, become a specialist and get started!!
 
QUOTE (Vancouver @ Sep 14 2008, 09:27 PM) Thank you- if you have any suggestions, I am a sponge. I am interested in Maui. (I have stayed in a suite in the building before so I am familiar with its location) I still have to do alot more investigation before making any offers but I thought I`d ask my question first. This is the realtor`s reply when I asked how motivated the seller is:

"The current owner is an insurance company that obtained the property on 1/19/07 at a sales price of $1.060M. The insurance company is holding the property, but is not interested in keeping it on their books. The condo has been assessed at $919k, and the list price of $615k indicates the owner`s motivation to sell." Of course, all properties have decreased significantly across Hawaii. I still have to analyze the numbers before pursing further action.
Maui has 2 interesting wrinkles:
a) any new development needs to have 50% "affordable housing" i.e. rental units, which means much less will be built and what is being built will be more expensive
b) water restrictions .. i.e. it is hard to get a water permit for any new development

This means overall new supply will be tight .. and thus, prices will start to rise at some point !

Yes, I am also aware of some condo projects where prices have dropped 30%. I am tempted to buy too. But:

Keep in mind that any asset comes with a liability: insurance, condo fees, taxes, upkeep, management fees, .. and likely mortgage .. thus you need to look at this liability and the asset upside, i.e. occupancy levels, time lines, mortgage level and how much time you can or will use it yourself.

Do you always want to stay at the same complex ? Hawaii has many nice islands, and each island has many nice resorts .. 100`s of choices .. and then there is the Caribbean , Mexico, Arizona .. all fine vacation spots too !

$5000/month in rent is easily obtainable in some high demand areas .. but sometimes not .. depends on property and ZONING which will be enforced more. Some zoning does not allow short term daily/weekly rentals even though it is commonly done in some of these complexes. Rent might drop from $6000/month if rented furnished on a daily basis to $1400/month if the zoning states "minimum 6 month rent aka rental unit" .. oops ..

So, yes it MAY MAKE SENSE .. it may not .. do your homework .. no need to rush .. everything will come done 30% or more .. not just this "one condo of a lifetime"

Aloha .. off to Maui now actually (Sept 16 !! .. back Sept 27)

btw: did you know that "Caribbean" is spelled with one "r" and two "b"`s ? I did not ..
 
QUOTE (C2Ventures @ Sep 15 2008, 05:38 PM) You could buy 2-3 cashflowing homes in an Alberta top 10 town for the same price as a Hawaii condo that is vacant 26% of the time. I guess a lot will depend on your long term goals and how much down payment capital you have available to get started.

This is a great time to be buying well-selected Alberta properties, so as you mention, pick an area, become a specialist and get started!!

yes, but Maui is so much more fun .... and at the right price with only 26% vacant on a daily rental basis cash-flow might be decent .. even after rental management fees, mortgages, condo fees and taxes.

If the yield and upside is similar: what is better: AB or HI ????
 
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