All Forum Posts by: Jeremy England

Depends on how good of a deal you are getting.  If there is 5k more in repairs but you are already getting the place at 50pct discount, don't miss the forest for the trees.  

 I haven't read this entire thread but if this is multi family, I would probably use the cap rate method.

Net operating income/ required cap rate = value

NOI is calculated by taking the gross rents then deducting expenses (vacancy, property mgt, maintenance, cap ex, etc)

Does that project cost exceed arv?  

Is that correct?  I probably wouldn’t buy it if so

That seems odd to me.  What's the difference in that than those people who build small apts for their aging parents (as opposed to converting a garage).  Perhaps contact a trade organization among appraisers (not sure what it would be called) National appraisers bla bla.  And see if you can get a referral for your lender.  

You could also get a realtor to look on the mls to search for sold listings using the key word "mother in law suite" or "garage apartment" and find out who appraised those sales

There are a few options.  Just offer financed deals.  Get a preapproval froma  mortgage broker and use that to make offers.  If you are trying to make it attractive to sellers then remove contingencies if you are confident it is a good deal.  

Use the cash you have and shop for cheaper properties.

These are for MLS properties

For off market properties, no such proof of funds would be required.  If you get a deal, then you could bring on a partner or a private lender.  

Buy a list of out of state high equity owners and send them a letter or post card.  Repeat as necessary.  When you get in front of one, pitch an owner financed deal.  

Thing is you're not really offering an all cash deal. If you want to differentiate yourself from a traditional mortgaged deal then perhaps you should say you are privately financed and approved, then supply the letter from the HML.

How was it that you ended up with such a slim margin?  I'm sure you have gained some valuable knowledge and I'd like to hear about what costs you did not account for.  

As for your problem, if it indeed did not get solved, there is also an option of renting the house and refinancing out of the hml.  You'd leave several thousand in cash in the property but you'd have income and better loan terms.  Just a thought

Thanks

I'm thinking of bidding on a triplex at a county auction and wanted to get the input from people here on placing a value on the property.  

The building is in a c-d neighborhood, although the street it is on is better than the other blocks due to less traffic.  The market rental rate for the units (after repair) is 625/mo, this coming from another building across the street with equal sized, clean, painted, with newer cabinets   

The tax assessed value is 72000.

Unsure of repairs needed yet but if I guestimate 12/sf i'm looking at about 25000 (I'll verify this before bidding)

Comparable sales do not reflect much due to the number of sfh surrounding the property.  

If I price it according the cap rate method, I come up with 122000 

Bank's highest bid is 70000

I intend to BRRR this property, but not certain if I'm looking at a deal.

72000 purchase price (foreclosures in this area that sell to 3rd parties typically go for approxmately assessed value)

Repairs 25000

Buying cost: 500

evictions/cash for keys: 1500

Initial cash outlays: 99000

Annual revenue: 22500

Taxes: 1417

Insurance:  1500?

Vacancy: 1800

Maintenance: 1200

Cap/ex: 675

Management: 2025

Lawn maint: 480

Water/sewer: 1200

NOI: 12233/.10 = 122330

ROI: 12.3%

question is what method would the appraiser use to value the property.  

anything it look like I'm missing here?

You and me both, Im making offers, waiting on a reply from a seller now.  I too invested pre 2008 and thought it would last forever.  LOL.  And just like you, it's taken me until now to jump back in.   

Great story, where did you find the rental and flip? MLS or off market?