All Forum Posts by: Andrew Edwards

I've heard they appraise and depreciate items not typically depreciated like stoves and refrigerators but items like light fixtures, water heaters, furnaces and all the wiring and plumbing attached to those items, sheds, the list goes on and on. Pretty much everything other than the building its self.

The example I was given was a 150k condo depreciated about 40k in various items.

Has anyone out there ever done this?

I have several multi-family properties and I'm always looking for ways to increase my cash flow. Can we start a discussion on Chattel Appraisals?

Who has used this and would you recommend using this strategy?

Can you tell me about the benefits or risks involved.

WAMU... what a great company. Nine months ago, when they wanted our loan one of our properties appraised at 500k. Six months later when they decide to get out of the HELOC biz they do an in-house appraisal and come up with a value of 150k. What the hell??? The HELOC was pretty much wiped out. Best part is they will still charge us $500 to close the account. Great customer service to boot.

This is probably a dead topic, but I think when you're starting out you'll come across what you might think of as opportunities when in reality they're traps. The shortcuts get you into trouble. You'll have plenty of opportunities to screw tenants, realtors, banks, vendors, the IRS, etc, etc. Whatever you do keep it legit. As a LL/REI I've had my integrity tested often. At the end of the day I can sleep soundly knowing that I did the right (and sometimes more expensive) thing with my integrity intact.

At what point does it become advantageous to re-fi this way?

How many properties or how much equity/debt would you have to have to be considered for this type of financing?

I'm not at the billion mark yet... but would like to know more.

Most banks require seasoning of 6 mos to a year. I've found that Countrywide doesn't require any seasoning. For example, on a cash out re-fi they'll base (as high as 80%) LTV on a new appraisal.

CW=Conventional Wisdom perhaps

All great inputs. I'm sure most all REI's have considered and I'd be surprised if this topic hasn't been covered before.
If I can add my two cents:

Consider a broker who charges a flat rate per transaction. I've seen it as low as $400 with a $50/mo fee.

I've found it hard to put a value on the info found on the MLS, including comps, past sales, contacts, etc. when analyzing a property.

Calculate all the fees; Broker, MLS, Associations, whatever. If you close 1
transaction per year you should be able to pay all those expenses.

Save mom 3+%... priceless.

The knowledge you will get, not only in the beginning getting your license, but on every deal is invaluable.

Everyone has a different approach to investing, do your own diligence.

Another resource is your local apartment association. Sometimes even if you're not a member they'll answer quick simple questions without paying to join.

I had two roommates and wanted to buy my own place, couldn't afford my own house so I started looking at duplexes. Found out I could use the GI Bill with no money down; at closing I got a 3k check for rents and deposits. Stuck that in a separate account along with the positive cash flow, in a year I'd saved enough to buy another one. Now I own several multi-family and even an office building. A few years ago I decided to stop paying my Realtor and got my own license (saving me thousands of dollars.) Now I do REI full time. I've never regretted it for a second.