All Forum Posts by: Ronald H.

Hello Samori

Yeah, Paul has hit it right on the head. Trying to pinpoint the ARV of an older home would lead to inaccurate results. Using the average for the area, and adjusting for home size, lot size and amenities, and special attributes is the way. Age of the comps can be important, if the subject property is not going to be demoed or rebuilt.

Search sold properties within a mile or less of your "subject property."

Select the comps with the closest Sq ft of living space, beds and bathrooms, and lot size to your subject property.

If some of the comparables are within all the same location, but have an ocean or mountain view, then ask the people here or someone experienced and they may know. Properties located a block from a subject property that you are trying to buy, and that have these special attributes will be in higher demand, making them worth more.

You can try a web search and town records, if online to see how that town has valued the property, or ask someone here or an "experienced broker."

To change topics: How much is a Garage worth? I have it somewhere on my laptop here, but I am tired, so just do some web searches using keywords, such as "Improvement value of a garage in Texas, or Is it worth the cost to build a garage? Imagination and creativity with your searches will find it, but just ask everyone here first and then try the searches if you still are uncertain.

With all being equal between your newly found "Comps." Newer homes with newer amenities will be higher in price and I think the amenities and additions should bring the value up higher than a similar home that is 30 years older, due to age of the house and additions.

Ask experienced contractor's and broker's, if needed. They will know.

If you have the time, you can do comps with Microsoft Excel, or Access. I may have a spreadsheet for what you are trying to do with these comps, but it is late and I am ready to hit it.

Recommendation: If you can outsource finding your comparables and/or doing databases and spreadsheets, because they are time consuming and your time will be better spent on speaking with Seller's and getting the properties under contract.

Hope this helps.

Forgot to change the title. A more suitable title would be "Are the Cris Chico methods of buying being used currently?"

If you never own a property that you assign, aren't you essentially a Bird Dog?

Hi, everyone.

Have nine questions. Some have to do a bit with the Cris Chico way of doing things.

If Mr. Chico does not have to know about Rehab Costs, then his contract with the person he is buying from, the "Seller" has to have a clause or exit strategy in it that specifies that Mr. Chico's offer is contingent upon a 3rd party buyer completing the Rehab Estimate and Inspections and if there are tenant's in the property the 3rd party buyer has to approve of them.

Q1: Would, or are there any Real Estate Investor's now that will buy from a Wholesaler that does not provide a Full Report of the Rehab, holding and selling costs?

Q2: Earnest deposit would have to be supplied by me. I would need the property to be under contract. Mr. Chico says he gets them under contract w/o owning them. This will not work as far as I know. Anyone got any ideas that I am overlooking here? I know some case law and having an interest seems to be the only way to be protected against Broker's and lawsuits and possibly an unscrupulous Investor, who may decide to undermine you if you had no contract to begin with. If taken to court you would most likely be fined for taking a referral fee w/o a license. Yeah, I've heard people say structure it as a consulting fee, but it makes me nervous, still the same.

Q3: Maybe the contract specifies a deferred EMD, where I would get the EMD from my end buyer?

Q4: Where are all the talented "Virtual Assistant's?"

Q5: Performance based pay would have to be the way, because there simply is too much opportunity for a lazy person to do nothing, if the pay was hourly. Any ideas on how you would come up with a pay and incentive plan?

Q6: Can this and is it being done currently? If you are in Massachusetts it would be great if you could let me know if this works for you, but anyone in any state with helpful feedback on this is fine.

Q7: I am lousy on the phone and don't have too much confidence in selling. I would welcome any feedback on how I could still go ahead with this, but hire someone else to get the property under contract. I have a feeling that this is impossible. Anyone else have someone getting their properties under contract for them?

Q8: Anyone else have someone getting their properties under contract for them?

Q9: If you are a R.E. Investor and you would buy from a wholesaler who does not provide a full rehab report, do you require the contact info, such as the "Title Company to use?" or any other information.

NOTE: I have heard from people here and on another website that say they are buying without even seeing the property. Who in their right minds would not want to buy and sell this way?

I guess engaging the service of a Lawyer could tell me for sure, but I am hoping to get some sound advice here.

Just a comment: If there truly was a low risk way of getting a property under contract and assigning it to a 3rd party buyer than why wouldn't everyone be using it now.

The following article is courtesy of Zillow.com and Wordsmith. Suggestions made by an Investor. Dated 7/5/2010.

Many more articles can found by doing a web search using keywords, such as

* "Benefits of purchasing an LLC to buy real estate"

* "Should I buy Real Estate as an Individual or as a LLC."

You may also want to read the article here on Biggerpockets, titled " Should you put your Rentals in an LLC?

NOTE: If you plan on using Transactional funding for any flips, most require the flip to be done under the umbrella of an LLC, and they will not allow you buy as an individual.

Check with a lawyer or accountant for the most accurate answers. Since I'm neither, what I'm presenting is neither legal nor accounting advice. However:

From an investment standpoint, most lawyers and accountants will advise you to place your properties into an LLC. Some will advise a separate LLC for each property. That way, if for some reason one LLC is breached, you still have protected your other properties. But I know investors who simply use one LLC. And I know others who will put roughly a certain dollar amount of properties--such as $1 million--into each LLC. So one LLC might hold 3 properties and other might hold 5. There are various arguments in favor of that approach, too. Largely, it reduces the cost of forming an LLC for each property.

You probably won't be able to purchase the property in the name of the LLC. Instead, you buy it in your name and transfer it into the LLC. Another possibility involves buying it in the name of the LLC, but you providing a personal guarantee for the mortgage. Bottom line: Lenders won't lend to most LLCs unless they've got someone specifically to come after.

Another strategy is to transfer properties into a land trust. Some investors prefer this approach. Land trusts can offer more protection, but they also require a lot more paperwork.

In an LLC, the profits, losses, etc., flow through the LLC directly to you. So (oversimplifying--an accountant can provide the details) really there's little difference, tax-wise, between owning a property in an LLC and owning it in your own name.

In this area, I believe I see that homes in good condition are selling for more than assessed value.

I am aware of how the people are buying and how assessed values can be a moot point.

I had one price. My friend tells me another. He is a licensed broker, but he does not like the idea of selling to Investors. He has a multi unit rental.

My friend also finds it hard to believe that rehabbers can make money fixing houses.

My home may be fixable or may not be. Cold in winter. Hard to manage for me. These are the reasons for thinking about selling.

Property really has not been marketed at all, outside the one test ad, which led to some odd characters replying to me. 2 were developer's who got my info and didn't call. Another respondent only gave me his first name, no actual email and no phone number. What a joke. I told him he will need POF to see the prop. Haven't heard from him in a couple days. LOL. Another respondent says he has a friend with a ladder and he wants to buy his 1st deal. Said he could do the rehab for less.

NOTE: Should I ask for POFs from everyone before inviting them in my yard and talking with them? I only want serious closers, no tire kickers.

NOTE: What is my broker friend thinking when he says offer at assessed? He is only trying to help me, I hope. He does not actively pursue investments any longer. He does not like the thought of selling to Investor's. He also cannot fathom how money is being made in rehabs, with today's prices.

A one day test ad flushes out people requesting details and addresses, but not following up. Is this going to be the most aggravating experience of my life?

Thanks for the reply, Jon

Yeah, I have lived here since my Mother was placed in a Nursing Home December 2010. My name was not on the title until June 2013.

I wonder what they'll want for proof that I lived there. Utility bills, etc.

I inherited my Mom's home and the deed was passed to me one year ago this month. The home needs a lot, and I have been considering selling.

From what I am reading, I would have to wait until next June of 2015 to be in exempt status to Capital Gains. Am I correct?

Threw a For Sale posting out for the hell of it, to see what happened. Would love a property half the size with half the size yard.

Got four responses in one day that the posting was active. Two of the experiences, I have already talked about on here. 2 Developers.

The third response is hard to guage. He left no last name and no phone number. Wants to know what creative solution I am looking for. He would like to know the address. I replied to him, but when I am ready to sell, I am going to want proof from my respondent's that they can actually close with all cash, or else I am not showing them my property. My time means that much to me.

The fourth response was from a guy that said he has a friend that fixes houses. He goes on to say that he is looking for his first wholesale deal. I cannot seem to take this one seriously. If he is serious, he does not instill a lot of confidence in me with his reply.

To change topics. My friend and client, who is a broker and owns a rental, told me to start pricing at Assessed Value. Since I have no reason to believe that he means me harm, I am wondering how he comes up with his calculations. My major concern with his idea, is that I will lose any buyer's. The home may or may not need to be demoed. Assessed home value is $112,500.00 The assessed land value is $146.700.00 Combined assessment for bldg and land = $259,200.00. If sold for 70% of ARV, I am looking at $181,400.00

A search of recently sold 3 bed, 1+ baths, Single Family homes on Trulia using similar property and lot features shows two fairly old sales. First is a $356K sale dated six months ago, and a $318.6K dated 5 months ago. I am surprised to see that the search did not show many comps from 3 months back to present. I know that more info is need, but this is just a brief scenario.