All Forum Posts by: David Jacques

When determining the value of the property, you want the appraisal to be as high as possible and the assessed value to be as low as possible. The catch 22 is they are evaluating the same thing.

Your construction costs look obscenely high for a sub 2500 sf house. Your site numbers should be scrutinized. If the site is graded with utilities stubbed then maybe your close. What is included with your design/entitlement? Approved house plans can run over 50k. What is the status of the approvals on the site?

Your GM looks a bit thin. Get your construction costs down. For 70k, I can build a new townhouse.

It almost seems like you have to consider the time value of having all of your cash tied up versus levering the property if you're going to look this much into it. If that is the case, I have to imagine that your overall returns with the higher vacancy exceed that of lower vacancy and no debt.

Is it really relevant though? Unless you're analyzing homes within a homogenous community, every deal is so different that it almost doesn't seem like it matters other than for anecdotal reasons.

For those not in the know, she is referring to the government sponsored EB-5 program where immigrants can have their visa expedited by investing $500k into a development project. It isn't used very often unless debt is very expensive. You're introductory the fed into your project, which draws the process out. The benefit is the expected return to the immigrant is negligible since they are just buying citizenship.

How do you intend for this to work? Unless you're employing interns, you'll need to pay people when times are slow when you would normally just cut off contractors.

If you really wanted to hire staff, you would need someone to oversee operations, purchasing, construction, acquisitions, land development, entitlements/permits, sales and marketing, accounting and potentially HR.

Way back when I was pounding the pavement looking for deals, one of the tricks, so to speak, that I used works if you have access to the actual mls in your area (not Redfin, zillow, etc) but the website that real estate agents use to upload listings.

Define an area that you want to invest in then then search for listings that are improperly labeled (i.e. The property is 123 S. Main Street but entered into the mls as 123 N. Main Street). It happens more often that you would think, particularly with foreclosures and other investor grade homes if the agent doesn't have any particular incentive to review their listings.

It requires a solid working knowledge of the area but one realtors mistake is extra profit in your pocket. In Baltimore, a south versus north location can be a colossal difference. Because many of the homes look similar in Baltimore, an investor could very easily pass over a deal that is in a prime area because it's simply mislabeled.

Shooting from the hip, it sounds like the back taxes are more than the property is worth.

You'll save yourself some money if you learn about contract assignment instead of actually purchasing the property then reselling.