All Forum Posts by: Bill Devola

@Jeremy Pace

Great answer.  And that is dirt cheap BTW.  I'd expect that set up to cost around $4.5K here.  

As always, I could write a book on this topic. 

Hate to be contrarian, but I've never had good look through the references channel.  Too often I've had contractors get people they know for the reference.  

Then my post gets worse from here...I don't have tried and true "best ways" to find someone good.  After years of doing it and meeting a couple hundred contractors, I can just tell.  I know, thats not helpful.  

Look for little things.  When they come to do the estimate and your describing the work, ask for their opinion.  Be uncertain about something.  "Im thinking about opening up this wall here, but am not sure if its load bearing, or if wires are running through it.  Whaddya think?"  If they say 'no problem, we can figure all that out', thats a bad sign.  I like guys who'll go to the basement, look at the roof line, and check for outlets, then give me some detailed thoughts.  Are they writing things down and measuring?  Good sign.  What kind of questions are they asking you?  About the project, or payment schedule?  If they start talking money too early, thats no-no for me.  

If your job is small, this doesnt apply, but if its not, they should have worked on something big recently or better yet show you what they are working on now thats comparable in size.  Drive there and check it out.  Does the job site look like it was hit by a tornado?  Small thing, but not good.  Go there early one day. What time do the subs show up in the A.M.?  Speaking of subs, guys doing decent size (but not huge) are likely to sub out electrical and plumbing.  Find out how long (and confirm with the sub!)  they've worked together.  7 years of history? Great sign.  We just started together 2 months ago == not so great.  

How does the bid look?  Every book I've ever read says get labor/material broken out separately.  I don't think I've ever had a contractor do this for any job bigger than a day or two worth of work.  But I don't like when they turn in a lump sum bid with no breakdown.  I like to see that they've assigned some value to individual parts of the job, and that value makes sense.  Even if I have to give them some fake optional items to break out that Im not really considering doing.  In my experience the better ones will sit down and price your job out while many of the rest will throw out a number and figure things out later (ie shortcut, hit you with change orders, or just overpriced it to start).  

I know none of these are concrete, but my gut goes a long way in the process.  But nothing for me is more important that meeting the contractor on the site and giving him every opportunity to show off his knowledge.  Even if I know the answer to the question Im asking.  Guys who really know what they are doing will be able to explain it to you so it makes sense.  Others will BS their way through and you'll sense that.  

I don't have any contacts for you, just a piece of advice from experience:  call more people.   For a $5K repair, I wouldn't stop until I had at least 5 people through the place.  You'll end up having to call about 15 companies, but you'll learn by talking to people about mold remediation.   Sometimes you just gotta work the phones.  

Also, keep in mind whether or not you'll need some sort of certificate or proof the remediation's been done.  If you dont, great.  But if you do, be sure youre gonna get this upfront to avoid a headache when/if you sell if youre going to need it.  If youre going to ask me how do you know if you need it, dont want to say on the open forum!  o_O

I've never done a deed-in-lieu, but I feel like that's gonna hit their credit.  Not as bad as a foreclosure.  But I'd say this is less preferable from a creditor's point of view than a short sale.  

I'm sure there is another one or two (extra) creative ways that are not obvious to me, but the only thing I can think of is deeding it to an investor and letting them assume the mortgage(s).  

Before you or they object to the problems with this plan, I already know.  But there aren't many options in a C location with an underwater home and owner who doesn't want to short sale the place.  

@Jay Dewberry  not necessarily.  There is actually a clause in most mortgages that provides if the property is abandoned, the owner non-responsive, or signs that the property is falling into disrepair they have the legal right to secure or repair it.   Which may be why they are tight lipped.  My guess is legally that clause can get dicey. 

I think OP's issue is that it appears there may be no will.  I've never deal with a situation like this.  To be honest, it sounds like a immense amount of work to track down heirs, get them to take whatever legal action is necessary to get control of the estate, agree to sell to you, and take care of whatever is happening with the lender.  

As Dewberry mentioned, the probate court is a great place to start.  Get his name from tax records as mentioned above by others.  Another thing that will be really helpful for you to do is pull up the mortgage instruments against the home (hey, as long as your at the county, why not?).  See if there is a lis pendens in place (believe MA has these, but not sure).  Also, see what his original mortgage amount is and when he took it out.  If its underwater, youre on like strike 5 with the deal.  LOL. 

Don't read tooooo much into the LLC thing. That could be a person just buying investment property "the right way", or it could be 120 person operation in Nevada.

Other than that, if there is a broker involved, make that broker earn their money!

I think trying to predict a downturn from any one subset of data points (in this case anecdotal evidence from mortgage lenders) is not going to give you an accurate idea.  

There were A LOT of factors that went into the downturn. Im pretty confident that we will see an uptick in foreclosures for two reasons. The first is as the fed tightens. But thats years away given the gradual pace they seem to be proceeding at. Second, the banks are holding back so much inventory its obscene. I'm not being hyperbolic either. My area of the country is pretty high value, and I can go through so many houses that are either sitting vacant (already foreclosed), occupants have been living mortgage free for 2-3 years, or a listed REO property has sat marketed months on end getting offers the lender refuses to accept.

My point being, these larger lenders seem to be propping the market.  My guess is they are doing it because flooding the market with inventory right now would depress prices.  They aren't hurting balance sheet wise any more, so they will take their time foreclosing and disposing.  

That said, I think there would have to be a major shock to the economy for another severe downturn to happen.  I agree some markets like San Fran, maybe NYC are overpriced, but I would say the majority of the country is not in a bubble like it was in '08.  

I also agree that a downturn would be welcome for conservative investors.  Its getting almost as hard for me to find inventory in NJ now as it was in '05.  

I mainly replied to this thread to laugh at what @Curt Smith had to write.  Hilarious and vintage.  Ahhh...when you describe in detail what you look for as a real estate investor it can seem so absurd, but this is our lives.  No matter what we're investing in.  The down and dirty detail matter.  

But as long as I'm here I'm going to agree with the larger points from @Jack Baczek & @Paul Stout  had to say. I've said this before and I'll say it again...looking at a deal from such a measurable perspective such as # of units, cap rate, city, amount of work etc is too rigid a way to evaluate a deal.  Well, at least for a 3rd party to evaluate it.  

There's so much else that factors into a question like this.  Whats your age and your short/long term goals?  Is there owner financing, or will you "shoot your financing wad" for the next 18months if you do this one smaller deal?  Is the area appreciating?  Is there room to expand the number of pads?  The list could go on.  

People that have these general rules they pass on probably have them for very good reason.  It just may very well be the reasons they have for those rules aren't applicable to your situation, desires, or limitations.  Evaluate each deal on an independent basis and consistent with YOUR experience.  

LMAO @Bob Bowling : Not sure how they do things in Hawaii, but ... NOI/Value == cap rate. Period.

Ummm..what your missing here is if the building is distressed and/or mismanaged, when you 'right the ship' you'll be above the prevailing cap rate for the area.  Same idea with renovating a house.  You get some equity (or discount) for your trouble of dealing with the issue versus purchasing turnkey.   

The NOI is under-performing if its mismanaged. It's a well accepted concept.