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report from Northern Virginia
Old 01-17-2008, 08:26 AM   #1
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report from Northern Virginia

An after action report from my recent attempt to purchase a rental property.

I made a purchase from Tricord homes/ Port Aquia in Northern Stafford this past weekend. Very close to the Prince William County line on I-95.

Since my arrival in NOVA from California during 2005 where I made a home purchase (Id rather not talk about that particular issue without bourbon handy). the market here has been rather brutal.

I have been visiting home sellers regularly. Itís a bit of a hobby. Almost as a rule, I would be the only person in the office. What struck me from my Tricord visit was that not only was the office busy, every single agent was writing a contract at the same time. I remarked to the saleslady that I thought she was unusually busy and she replied ďOh we havenít seen this since the hey daysĒ.

Another point, I asked that a cable jack be added to the living room as a condition of purchase. The builder declined and told me if I didnít want it they had another buyer ready to go.

Very unusual.

Prices are 100k less than they were 2 years ago.

I think what I am seeing evidence of is that buyers are out there if the price is right.

Another note as an investment home, they are now asking for 15% down and are charging me 150 bucks a month PMI. My credit rating is mid 700s. To help come up with the additional 5% I considered a home equity loan. I put 125k down on a 572k purchase in 2005. my loan is now at 448k. I have never been late on any payments. Lenders wont give me a penny in a home equity loan saying my house doesnt meet the 80% loan to value test.

that leave a pretty painful mark.


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Old 01-18-2008, 10:59 AM   #2
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Thanks for the snapshot.


No more lawyer stuff, no more political stuff, so no more CYA

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Old 01-18-2008, 11:36 AM   #3
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a great story, do u want to share information about the builder, location and the cost... maybe i like to get into the deal too. 100K less, wow how could that be possible??

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Old 01-18-2008, 03:26 PM   #4
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The builder is Tricord homes. The development is Port Aquia. The development is located at approximately exit 142 on I-95. This will be my second Townhome in the subdivision. The first rented in January after only 7 days for $1695. I think I went a bit light to get it rented.

I paid 295k for the first, it was the builder model and featured a ton of upgrades. My second is 285k.

The community is predominantly govt, Marines and FBI agents at their academy. Looks well kept. 50 dollars a month in HOA. I believe the local rental market with its proximity to Quantio, Stafford and the FBI academy is a strong market. Local area is growing, county plans improvements, USMC national museum just opened...etc. BRAC plans to move Dept of Homeland defense to Quantico. Isolated market conditions that might differ slightly from rest of NOVA.

The seller is under huge negative pressure on current pricing from buyers who bought in 2006 for much, much more.

I would appreciate advice from more experienced landlords/ investors.

I was told they will be raising prices as soon as the remainder of under roof homes are sold. Remains to be seen. Office does get a lot of traffic.

Bad side: I am looking upside down (even after a 20% down payment) on my main home that I bought in 2005. My plan is to keep these properties for 3 years and then revaluate following county improvements and movement of BRAC. I am upside down cashflow wise on each of my rentals right now for about 150bucks. In 3 years at 3.5% inflation I should be even cash flow. At that point I can wait for time to march on.

Window for collecting gains is 3-5 years and hopefully average out with a slight profit from all properties.
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Old 01-18-2008, 06:02 PM   #5
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Thanks, nothing like a "boots on the ground" report. So I guess the discussion a few days ago of homes in NOVA going at 76% off, and another GD on the doorstep was not completely accurate.

Worst market I've seen was Colorado Springs in the mid 1980s. Some homes were negatively appraised because the developer had big loans against roads and utilities that had to be paid by anyone who bought. Every other mall store was closed, it seems. But the "typical home," i.e., mine, was only off about 10%. A decade or so later, the situation was the opposite, booming. I suspect the same will hold in NOVA. This may not be the bottom, but my guess is we're a few percentage points from the bottom.
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