All Forum Posts by: Evan Wiesner

@Lacee Beitler Well you just found a guaranteed reason to replace all the flooring, cabs, vanities, and paint the entire house! Congratulations! (he says with a mild snicker)

I actually don't mind those properties, but you will probably need to do all of the above. And once all the flooring is out take a really good peak at the interior and see if that eliminated some of the smell or if it's in the floorboards/slab. If it's on a slab foundation be prepared to use a lot of kilz and you may have to use a machine called an ozonator as well. 

We've purchased so many properties like that, between smoking and pets, that it's a little routine. The trick is to be patient and overdue it a little. Just because you think it smells a little better doesn't mean it's gone. If you smell it at all before you start painting again, it will come back. If you're patient you can get rid of it all but you're probably doing all the surfaces to accomplish that.

Good luck! 

@Brandon K. Having a solid knowledge of construction would really help but don't lay back on the financials. Whether flipping or investing in long term holds you'll need to understand the metrics associated and how they affect you. After that it's experience and repetition as much as anything else. Get involved in deals, yours or otherwise, and ask questions. 

Why did you remodel this? Why did you buy that? What's the ROI on the property or the additional work you're doing? What's the financial structure you're working under? How did you get that loan? Where did you identify this property as a potential deal and how did you evaluate it? All of those are questions you should be asking (when appropriate) to anyone you can find involved in a deal who is willing to share. Just spend time in the system and you'll start to discover the nuances. And good luck!

The reality is that you are limited in options. You can ask them to pay cash for the rest, which probably won't happen with an FHA buyer. You can drop your price, which is painful but the easiest if you're considering timeline. Or you can terminate and try to find a new buyer. Keep in mind that the FHA case number assigned to that appraisal is good for 90 days so you will need to find a conventional borrower if you can't find a cash one.

I left out that you can contest the appraisal since you said that there aren't any real comps. At this point its probably best to consider what you have in your hand and make the best of it. FHA buyers are usually limited on cash so you're stuck a little. I wish you the best of luck but I think those are your best avenues at this point.

Wendy Vaidic I'm going to disagree with almost all realtors and that's ok. I understand their points and I just happen to disagree. We've literally flipped a couple thousand properties in over 20 states. On a normal remodel at market normal prices you don't need staging. It's wasted money and we average putting properties in contract in under two weeks. So much so that we actually budget two weeks for that stage of our hold time. Normal being the part you have to identify, and if you're going to shoot for the highest price in the neighborhood than yes, you probably need to make it look nicer. In my experience the ROI on that money you spend for staging is almost non-existent. And yes, we've been able to run tests. (Similar homes, same neighborhood, same time, different price, one staged and one not... The lower price almost always sells first) On a-typical remodels then absolutely stage it. Mid century modern, high end contemporary, anything that looks like a frank loyd wright design, ultra high end, or any home that has a living space you just can't figure out how to decorate yourself needs some kind of roadmap for buyers. When they can walk in and see at least one idea of how to make it work they are more likely to be able to redesign with their own furniture. To clarify, we DO stage homes but we pick and choose the ones we do very carefully. If you're selling a 1990 built track home that's 1500ft and 3/2 in a neighborhood of all the same homes, staging isn't going to help you at all in my experience. The price is all that matters.

Just make sure you're comping it against other manufactured homes. There certainly is a value difference. We've done many of them across the country and they can be really profitable.

As a first time investor it's going to be tough. You'll probably need to put up some form of collateral and you might not get the best deal. Finding a partner may be the way to go to begin with and you're on the right site for that. You're doing the right thing by trying to lock up the funding first though. I wish you the best of luck.

@Account Closed you have a great plan laid out and I want to congratulate you on executing it. The biggest issue our local operators often have is that they aren't planning and they need a greater support structure. We built our model around the fact that local investors need more than just capital. Even great investors need manpower if nothing else and that kind of good support is hard to find.

Both as a real estate broker and then as a mortgage broker I had mentors who constantly reminded me to touch every file every day. Just move them forward. Do what you can that day on each property and then work on building your business. If you're diligent and do that first thing, you'll sometimes be amazed at how much time you can free up to find the next profitable venture.

@Robert Butler Adjusting the dollars per foot of comparables is never an exact science. I preach to my team the law of diminishing returns.... as you add square footage the dollars per foot decreases. And it works in both directions, but it's never perfect.

My suggestion is to find a way to "bracket" your comparables using gross sales prices. @Joe Villeneuve mentions sticking within a specific comparable size and he's absolutely right. But that's not always possible, especially if you're in a high gentrification area where there have been a lot of knock down rebuilds.

If you can't find enough by bracketing size and age, then you have to use logic. Use the dollars per foot as a starting point but adjust for square footage that is different (finished attics and basements are rarely worth the same... I value them around 50% compared to traditional first or second floor space) and then lean on the ancillary's of the properties. Covered parking, pools, lot size, and narrow your bracket by appraisal methods for the value differences in those items for your area. When you think you have a value, sit back and look closely at the nearest 3-5 comps higher and lower in value than yours and make sure your property fits.

And if you're still not finding a good number, take @Russell Brazil's advice and find a local broker. 

@Denise S. Cancellations right before a foreclosure sale (purchase money, HOA, or otherwise) because of a failure by the foreclosing party are extremely common. So while there may be something legitimately screwy, the fact that it cancelled just before the sale isn't out of the ordinary or a sign of anything more than typical practice of making sure you've done it right before selling the property. (it happened twice to me in one county yesterday)

You can contact the attorney, but they probably won't give you any real information. If you're lucky they'll give you an idea of what they are doing with the property from here and if they're starting over they may tell you about how long that will take. But I would look for other options. 

@Daria B. I'm fond of explaining to my team members that you never know the other investors intentions or model. Because there are so many variations, I couldn't possibly know my competitors intentions unless they specifically tell me. 

So one thing you bring up is the hold time, and if they truly intended to flip the property and are still holding it then they may have had to deal with redemption rights in some form, or a deed restriction of epic length. 

The remodel might not be the issue but if they are borrowing using hard money or even family money with excessive interest or fees they could be backwards on holding costs alone.

And finally, they may have raised the price because they originally received multiple offers on their first go-round and when that deal fell through they decided to shoot higher. That's my least favorite strategy, but I've done it so I can't complain about it.

Now take all of those and put some form of them together and you may have complete over-analysis on their part just trying to figure out how to make a bad deal better. Like I said originally, if you stick with your numbers they may come back to you and you're playing it the right way by being patient. Well done.