All Forum Posts by: Gregory J.

Thanks everyone for the feedback. New construction in this zip code is selling for $600k-$800k+ so I think there is a very good possibility this could work. Only way to find out for sure is get it under contract and then have a geotech survey performed. (Thanks @Jay Hinrichs for teaching me the proper term!)

I spoke to the trustee again today and asked him what it would take for the HOA to sell the property. He explained that under the current restrictive covenants the association doesn't even HAVE the ability to sell common ground. He explained that they were already considering amending the restrictive covenants to allow something like this and he is going to speak with the other trustees about it tomorrow. He was very supportive of selling it though!

I understand that this is a long shot because it literally depends on a 50 year old HOA amending its restrictive covenants, but if things do move forward I'll keep you updated.

Even if the new build doesn't move forward just reaching out turned out to be a great move. This trustee is THE realtor that people go to when they need to sell a home in this neighborhood. I explained that I am also looking for a home to renovate in the area and he told me there are three different elderly residents that have reached out to him recently as they are moving into nursing homes and need to sell their home. Hoping to hear back on these!

@Manolo D. Probably normally a good point about the taxes but in this particular area the common ground is assessed at $0 so the HOA doesn't have to pay tax on it. On the other hand, I don't know who is mowing it but somebody is...

I am marketing for my first deal in the zip code that I live in and looking for advice on my first direct mail. It's a fairly affluent area and I feel like the typical marketing messages that real estate investors broadcast don't connect with this market. Homeowners in my market generally don't need CASH RIGHT NOW or to SELL THEIR UGLY HOUSE.  Sellers don't tend to view their house as an "ugly" house and they can be motivated for lots of reasons, but probably aren't desperate. Here is what I plan to include in my letter:

Mr. and Mrs. Last Name,

Hello,

My name is Greg Saplin and I am an engineer from Chesterfield, Mo. I am looking to buy a home in the Riverbend or Green Trails neighborhoods. Nothing I see listed meets what I’m looking for so I’m sending letters like this to homeowners in our area. If you or someone you know has a home that they need to sell please call me at 636-299-XXXX.

I can close without any commissions or fees regardless of the condition of the home. If it needs some work or isn’t perfect then that’s no problem at all. I’m always looking for a project to work on. I love improving the neighborhood I live in.

Please call me at 636-299-XXXX. I look forward to talking with you!

Originally posted by @Perron Riley:

@Gregory J.  One thing to keep in mind is the St. Louis area does have quite a few underground caves due to the limestone in the area.  That being said, today's technology can prevent/correct many of the settling issues deemed irreparable in the past.   I recently had a house piered to correct settling issues-most hit bedrock at 40 feet but several went to 60 feet along one section of wall.  

It sounds like your on the right track.  I would definitely get a comprehensive soil survey of the property and go from there.

 Thanks for the local perspective! I plan on moving forward to see if I can get it under contract.

I noticed a vacant lot in my subdivision and found out it is owned by the HOA. I asked one of the neighborhood trustees about it and he explained there was originally a house on it but the ground settled and the house wound up being demolished. Everyone now assumes nothing can be built on this lot.

I have a hard time believing that in a development of several hundred homes one particular .3 acre lot is IMPOSSIBLE to build a house on but everything else is fine. I imagine with a soil survey and a properly engineered foundation it should be possible to build. How would I go about pursuing building on this lot? I would think that first I would get the property under contract with the HOA with a contingency that I would do a soil survey to determine if it is suitable to build on. Get the soil survey done and then move from there.

I asked the city about the lot and they didn't have any records related to it being "unbuildable".

If it matters the subdivision was built in the 60's and is in the St. Louis Missouri area (Chesterfield). Based on Aerial photographs from the St. Louis county parcel viewer I can see that the house was torn down between 1970 and 1981.

I am actively searching for my first deal for a flip and I feel split between two schools of thought that I have heard through various BiggerPockets resources:

School 1: get a property at a great discount and have a thorough understanding of rehab costs and ARV so you can ensure you make a profit and mitigate your risk. Generally flips stick close to the existing floorplan while renovating all the cosmetic kitchen and bath stuff.

School 2: location, location, location. House is either a tear down or gut rehab, generally in a highly desirable area. Investors can afford to buy at retail price because they aren't at their "highest and best" use. Investors tend to add sq footage, add a second story, add accessory dwellings, or subdivide existing lots to tap new value.

In my market the best deals I see are on single story ranch homes of 1200-1600 sq ft in size. My market supports new 2500-3000 sq ft homes at $150-$200 per square foot which tells me I could pay a premium for the 1200 square foot ranch that is functionally obsolete and turn a profit by adding a second story. 

My instincts stay start with what is safe and expand on what I understand. Start with the small ranch rehab. as I get experience, get a little more creative. Do the first deal with the current floorplan. Do my next deals with reasonable additions. Learn what goes into it until the pop top isn't so scary.

Looking forward to meeting everyone. Thanks @Peter MacKercher for being such a great resource for new investors. 

I'm at the same stage as you are and here is what I'm doing. Every week I look for all the open houses in my target market and I check them against the county records to see which ones are investor flips which are usually only 1 or 2 per week. I go to the open house and walk the house and write up a scope of work of what the investor most likely did. when the listing agent starts asking about me thinking I'm an interested buyer I explain to them exactly what I'm doing and if they don't want to waste their time with me I understand. Every time so far the agent is interested and wants to talk about the house! I ask them about what feedback buyers are giving, if they think anything is missed or wrong with the house, if they think it's priced right and what price do they think would get them offers today. Now you have enough information to do your own estimate of the rehab costs (with Jay's books) and analyze the deal as if it were your own. if the deal makes sense you might be pretty close. if your analysis shows the other investor is making or losing $100k on a $350k house at the day 1 list price then something is probably off. Not a perfect method but it gives you the opportunity to network with agents while learning and practicing for that first one. It also shows you what level of rehab you need to be doing in your market. Best of luck on that first deal!

Great meeting you last night Bob and happy to hear you made the move back. I would be interested to hear your take on this recent BP blog post.

https://www.biggerpockets.com/renewsblog/second-wa...

I tend to think a new migration out of the cities will affect the boom cities more and possibly benefit Midwestern cities such as St. Louis.

On the other hand I see lots of millenials with small children flocking to suburbs with great schools. In my neighborhood in Chesterfield 5 years ago there were no kids and Parkway considered closing the elementary school. Now the school is full again. Neighborhoods built in the late 60s and early 70's are experiencing a generational turnover as original owners are aging out of their homes.

Fellow newbie here. I have one rental which is my former primary residence. It's going great so far and has me hyped to do many more in St. Louis.

I'll be there and I look forward to meeting everyone!

Ask your realtor if they could provide furniture for staging or if any other realtors in their office have furniture that could be used for staging. I have no idea if this is common, but it is something my realtor does. She has two storage units full of common area furniture of all different styles so she can stage a home she is selling.