All Forum Posts by: Stan Butler

I am in the same market as you and like @J Scott said its really tough these days. I have upped my price points significantly out of the first time homebuyer market to get deals.

@Patrick T.

I am not sure why you feel the need to lecture me like a 3-year old. This isn't my first rodeo. I have been investing in real estate for 10 years and have flipped about 40 houses during that time frame (10 in the last 2 years). I have never been asked for this before and neither has any other serious investor in my circle, even on buyers using FHA loans. I have been asked for the scope of work many times and that is not an issue. Providing permits is also not an issue...

@John Holdman you said:

"What you paid for it is indeed a very good indicator of what its worth. I assume you're trying to sell it for significantly more than that."

I read and learn a lot from your posts, but I dont agree with this statement. I am trying to sell the house for market value, easily justified by the comps in the neighborhood. Market value is established by a willing buyer and a willing seller. I certainly understand the lender wants to sign off on the market value since their capital is at risk. When the property was purchased by an extremely willing investor from a distressed seller (bank), thats not market value.

Are you going to tell me that the the guy in the news recently who paid $14,000 for the Faberge Egg that is valued north of $30 million can't sell it for that much because he only paid $14k for it??

The actual question posed was, does anyone else rehabbing get these kind of requests when selling??

Its not a question of having all the records, its a question of divulging what things cost and who my contractors are. The lender is loaning money against a property based on what the property is worth today. What was paid for the property in the past, or for the rehab, should be of no concern. The property is worth what its worth, whether I did all the work myself, or paid $40k for renovations. Otherwise, whats the point in comps?? You might as well just say its worth whatever you paid for it...

Would you go to the builder and ask for receipts for a new home purchase?? I dont think so...

I can see the lender wanting this stuff if I was refinancing a prior purchase and looking to use current value.

We flip a fair amount of properties every year and from time to time we complete the buy-rehab-sell transaction within 90 days. When that occurs, the lenders appraiser will usually ask for a list of repairs to justify the price increase. We have even had to get a second appraisal when the buyer was doing FHA financing. In our latest deal, we have run into a lender asking for the following documents:

• List of all contractors and licenses
• Copies of all permits for work
• Every receipt of items purchased for the home (about 35)
• Make and model number of new appliances, hvacs, garage doors

Needless to say I think this deal is going to die unless the buyer finds another lender to work with. Does anyone else get this kind of request??

I download the HUD information into my own spreadsheet every day and track the movement of prices over time and the sales price / list price ratios. I am trying to figure out the most accurate way to determine DOM. I can pull the Appraisal Date, which doesnt seem to ever change. The List Date changes all the time based on a property going under contract and falling back out. I dont think HUD includes the time the property was under contract as counting toward the real DOM. So my question is whats the best way to determine the DOM from HUDs perspective??

That is referred to as title "seasoning". For a portfolio loan, I have worked with several community banks that don't require any seasoning to cash-out. For conforming loans, I think they each have their own time period. After the title has "seasoned" the V in the LTV can be the appraised value instead of the purchase price.

I had my GC give me a quote on a property a year ago that we ended up not buying (title issues) and it came back at $4,000. Here are the tasks that were listed:

• Drilling holes in the bottom of the pool for drainage
• Dispose of pool equipment and terminate pipes, electrical
• Jackhammer the pool deck and throw in pool (rent jackhammer)
• Bring in fill dirt via dump truck
• Rent Bobcat and Vibrating Tamper to fill and pack the dirt.
• If Bobcat wasnt possible and had to use wheelbarrows, cost goes up.

This did not include the cost of new sod to cover the area.

So @Mark Ferguson , are they still doing appraisals on their properties, but just keeping the info private?? If so, what are they hoping to achieve??

Also, after winning a bid, will the buyer still be able to get a copy of the appraisal from the AM??

@Will Buscher

http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

1st page, under the Exceptions heading:

"Exceptions. Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not required include all of the following.

Generally, payments to a corporation. But see Reportable payments to corporations, later."

In the "Reportable" payments section later in the instructions, it talks about Medical and Attorney payments mostly.

I have never heard of the landlord exemption and I did not see it upon a quick glance of the 1099-MISC exceptions. I have always filed a 1099 when I have paid any INDIVIDUAL more than $600 in a year. I do not file them for payments made to corporations as that is not required.

I dont see why it should matter what the intent of the property usage was when you paid the contractor. Its still going to be income to the contractor and that is the purpose of the form.