All Forum Posts by: Pete Harper

@Thomas Weidner

Very creative to get the bank to agree to loan based on renovated value. Most banks won’t do that.

On the appraisal did you try and challenge the second low appraisal using the first appraisal? Often if you have data to back up your challenge you are able to win. Depending on the appraiser they can have difficulty appraising a house + land. I had a situation with a 1600sqrft house on 58 acres. The 1st bank appraisal was dismal. I looked at his comps and he was using a “shack” on land. I found another lender who agreed to appraise just the house on the 3 acre parcel, ignoring the other parcels with 55 acres. The appraisal came in significantly higher without the land. The difference the comps changed from “shacks” to homes. The best part was after refi I now owned the land free and clear with no lien. My lesson was to make the deal look as cookie cutter as possible to the bank.

@Caleb Haynes

You are right, the numbers don’t make sense. I think there are multiple factors at play.

1) Traditional investments; Stocks, Bonds, CD etc yields are low. Traditional investors are chasing higher returns.

2) Mortgage interest rates are at historic lows. Your mortgage payment dollar buys more.

3) Chip and Joanna factor. Real estate is now “cool”.

All this has moved more less experienced investors into the market. People are no longer looking for 1% deals. Instead people are counting on appreciation for returns. We will see how this shakes out in the long term. Will new investors be able to survive long enough to capitalize on appreciation?

@Caleb Haynes

Texas market is super hot right now. Inventory is low and demand high. As others have noted due to Covid, average homeowners are just not moving. We are seeing very little turnover of existing inventory. My guess is local demand is being driven primarily by investors.

I have an investor friend who recently bid on a completed flip in Round Rock. The property was listed less than a week with multiple offers. He bid $35k over asking and was not even in the running.

Personally I’m sitting on the sidelines, keeping my powder dry. I’m focused on improving my properties and raising rents. Coincidentally rents are rising fast too. My last vacancy I had three renters looking and I hadn’t even listed for rent. All word of mouth referrals and drive by. Tenant moved in before the paint was fully dry. I could have rented four more units if I had them.

The market is crazy right now. I’m guessing there will be a correction in the second half of this year as we see the benefits of the Covid vaccine.

@Account Closed

Something is fishy about this account. I received a PM asking if I was interested in his deal. I responded to send me the details. I also noted his profile was blank and suggested he add more information so I could tell if he was legit. No response. Today I see the account is closed.

Anyone with a similar experience?

@Dawn Heimann

I would recommend you set up you LLC as a series LLC. I didn't and had to create a series LLC later as my portfolio grew. I still have the original LLC with two properties. All the new properties have gone into the Series. You have a great deal of flexibility with a series. You can keep it as a single series while you are small. As you add properties to your portfolio you can either put them In the original series or create a new series. At the advice of my attorney I have spun off a new series for each new property. Series - street name.

As others have mentioned there is extra bookkeeping overhead. I had to set up separate bank accounts for each series. It took some convincing but Wells Fargo has agreed to multiple accounts under the same EIN. Each account is labeled series-street name.

@Rajiv Bm You can’t go wrong with any of the Austin suburbs. The market is super hot. I have a friend who bid $35k over asking price in Round Rock and was still out bid. Be prepared to compete against multiple bidders.

@Courtney M.

For my first successful MF deal I represented myself. I found an off-market deal from the county tax records and contacted the seller directly. We did the negotiations by email and I wrote up the contract. I was familiar with the State MF contract from other properties that I was not able to close through a buyers agent. As others have mentioned it is often cleaner to cut out the middleman in negotiations. I had my attorney review everything for a nominal fee. We did a thorough pre purchase inspection. I used the inspection to negotiate a new roof, GFCI upgrades, and replaced defective appliances. I was able to get everything I asked for in negotiations. In this case I can’t see where a buyers agent would have helped. It may have hurt in this case with this seller who didn’t want to pay a commission.

@Cameron Davis Link didn’t post.

https://www.biggerpockets.com/blog/bpinsights-march-2021?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2004/04/21

Texas scored four of the top-10 cities for rent growth. Houston #1, Dallas #3, Round Rock #7 and Killeen #10. I have property in Killeen and all of my properties fall within the triangle of Dallas-Austin-Houston. Interesting Round Rock made the list by itself as a close suburb of Austin.

I would agree rent appreciation in Killeen has been good. In two years we have been able to raise rents from $595 to $675 for a 2 bedroom 1.5 bath townhouse. We are forcing appreciation by renovations; new floors, great paint and updated fixtures. This year the market is strong enough we will shoot for $735. Killeen still has some catching up to do, a similar 2 bedroom unit in Bryan-College Station rents for $750.

What is everyone else seeing?

@Greg H. So the best I can do is be a PIA, cost him legal fees and ding his credit report. Too bad. Another option is to file a BBB complaint. This would warn other people to watch out.