All Forum Posts by: Dustin Beam

@Brie Schmidt I was thinking something similar, I just prefer to be transparent and not blur the truth. However, he didn't pay for it, I did. And all he really needs to know is that it passed the appraisal. 

At the same time, I need to manage him in this process and try to keep his head level. If it ever came to the point of me saying "Look, you're not getting the report", he would probably lose his cool. 

Would you provide the seller with the appraisal? I know that the seller will want one, but I dont' see how any good can come of it.

Back story: I'm in the process of purchasing some FSBO property. So we've met many times and he has my phone number, etc. He's very anxious and wants everything sped up. Thinks the bank and appraiser are dragging their feet, and so on. Today he calls to vent about it all. After the conversation, I got the appraisal.

The numbers aren't wildly different from what I'm paying, but the appraisal did come in about 7% higher. On a $100k deal, so what. But this is over $500k. Is that enough for him to try and find a way out of the contract? I don't know, but I don't really want to find out.

How would you tell him, nicely, while keeping his temper in check that yes it passed, but can't/won't give  the actual numbers?

Maybe this can be pinned?

So I feel like this would be a topic that would be hugely beneficial to new Kansas City investors, a little to experienced investors, and also to the people we hire that do good work at a fair price.

So bottom line, I was thinking we rate our experience with people based on price and quality of work. Please jump in and help other people (and me haha).

Example:

XYZ Plumbing:

Service: 4/5*

Price: 2/5*

Overall experience was .....

@John Johnson basically yes. That's just me though. I think it's a better way to determine a good deal. There are other ways to evaluate a deal, too.

...

I'm under contract with my first properties, but I preferred to look at cash on cash return over other  rmeasures. It's not totally different than $x/door, but I like it better because you take into account your down payment, closing costs, etc.

Look at it this way, if you make $150/door on a duplex, but it costs $200k to purchase (@ 20%, that's $40k down), then your COC return is 9%. $150x2x12=$3600 3600/40000 = .09.

Let's say instead you buy a duplex for $100k, but only make $100/door. Now $20k down and yearly returns of $2400. But 2400/20000=12%.

I'd rather make less and have higher returns. Then I could theoretically buy two of those $100k duplexes with the same amount of capital.

Determine three prices and you'll know. Cost to purchase, cost to rehab, and ARV. Know those and you will have your answer. I hope that didn't sound snarky.

8% coc return and paying more than market value doesn't seem like the best deal from my perspective, but I know that people have different goals and are in different markets than I .

Don't forget Craigslist also has a map search so you can see properties close by and what they are asking for rent.

I would also add to be up front early about it with anyone you might be partnering with. If they find out on their own, it won't look good on you. It's like they say, secrets don't make friends. :)