All Forum Posts by: Andrew Taylor

Looking for recommendations for commercial brokers in Conroe/The Woodlands area. Appreciate any referrals you can send my way.

Anybody have an idea what the cap rate is for small multifamily properties in the Conroe, TX market? I've got a lead on an off-market deal that I'm trying to underwrite. Thanks in advance for your help.

Home Advisor referrals pay to be on that service. You're not doing yourself any favors looking there. Best thing you can do is exactly what you're doing: reach out to others and ask for recommendations.

That being said, with all the post-Harvey work going on, you're going to be hard-pressed to find quality, responsive, and affordable contractors if you don't already know one. We're all busy putting flooded houses back together :).

Keep looking, and have patience. You'll find what you need eventually.

There's an awful lot of wrong in this thread. Rae, the flooded house market isn't going anywhere. Slow down, read up on remodeling, get educated, and there will still be flooded houses to buy. I'd start with "Flip" by Rick Vilani. You'll need to add probably 15 to 20% to his figures to account for inflation and labor/material demand post-hurricane, but otherwise it's a pretty solid primer on how to estimate rehab costs. Much better than the book you mentioned above IMO.

Craig, contractors make less money on insurance jobs, not more. I do this all day every day for a living, for both private customers and insurance jobs, and frankly there is no comparison. Given two identical jobs, one being paid for by insurance and one being funded by a private party, I will take the private party all day long.

You're right about mold, though. There's no need to have a house certified mold free, unless you're just budgeting that money towards marketing expenses. The proper way to build a house in South Texas is with an unvented attic assembly and foam insulation at the walls and underside of the roof deck. There are still a lot of builders who are afraid to do it this way though. It's more expensive, and it throws off the HVAC contractor's 400sf/ton rule of thumb.

Rae, don't worry about being outbid by flippers. Take the measurements, do the math, and trust your numbers. (Unless you have money to burn.) The market is flooded with novice investors right now, and it's also flooded with product. Before long, I'm willing to bet that a bunch of those houses you're being outbid on are going to be back on the market, half finished, because somebody watched a Chip and JoJo marathon and went out and wrote a check.

Just my two cents worth. 

Floodway land is typically unbuildable. That's why it's listed at "a great price."

To be sure, you'd need to contact the appropriate building department and give them the address.

@William Hochstedler, I appreciate your input, but I think you're skipping over the steps I'm asking about. How do I get from, "Hi, I'm calling you about the letter you sent inquiring about my property," to actually making an offer? I assume it's not, "Great, thanks for calling, I'm offering $35k per door" (or whatever the going rate is). There's some qualification, some probing, etc., right?

Maybe it's as simple as, "Thanks for calling. Can you tell me a little about your property?" and then Googling furiously in the background while they're talking. I like @Account Closed's warning not to come right out and ask "Why do you want to sell?", since the seller might realize you're an investor and expect a lowball offer - but knowing why they're considering selling seems like a pretty important piece of the puzzle.

Do you ask for any kind of supporting data before putting together a preliminary offer - i.e. T12 financials, rent roll, etc? Or do you wait until later in the process to ask for those? I understand the first pass is sort of a rough qualification, and the fine-tooth comb part will come later, but what's reasonable to ask for up-front?

Most of the properties we're targeting are in a specific area, so we'll know (roughly) what the cap rate is. Is it as simple as chatting with the owner until they volunteer (or you're comfortable asking for) the NOI, and then doing a quick calculation and saying something like, "At an NOI of [whatever they said], our offer would be something in the neighborhood of [stated NOI / cap rate]," and then whoever speaks next loses?

I've never done any phone sales, and in fact I hate talking on the phone, so I'm just trying to sort of systematize this process so I don't screw it up from the get-go. I appreciate everyone's input.

This may be a fantastically stupid question, but hey - we're all strangers here, right? I'm getting ready to send out a batch of yellow letters to owners of small multifamily units I'm interested in purchasing, and it occurs to me that I have no idea what to say to them when/if my phone rings.

"Hey, I got your letter about buying my property."

"Yes! That's great."

Crickets from caller.

Crickets from me.

Obviously (well, "obviously" *I think*) I don't want to make an offer sight-unseen to every Tom, Dick and Harry that might call me. What do you guys recommend as a "script" for taking these calls? How do I answer, what do I say, what process should I follow moving forward from the initial phone call?

Thanks in advance for your input.

We showed up at 8 o'clock this morning, and the place was deserted. Completely vacant.

I work for a small builder in Houston, and we are doing remediation work on flooded homes. I met with a client yesterday who is having a problem with a tenant. One of his rental homes flooded, and she threatened to sue him if he set foot on the property.

I just assumed that standard landlord law gave him the right to enter a property to do emergency repairs or damage mitigation, but this lady is really freaking out and says she has a friend who is a lawyer who swears up and down he cannot enter the property without her permission.

Any words of wisdom?

I'm not an attorney but I think owner financing is a little more complicated - and a lot more risky for the seller - than you make it sound. I would absolutely have an attorney dot the I's and cross the T's. Lose a lawsuit and you're on the hook for all the monies paid plus triple damages as I recall. 

As far as escrow, why not use some of the down payment money to fund the account so your mortgages are paid in advance instead of in arrears?