All Forum Posts by: Brad S.

As an appraiser, I will take all the info on the house and use it to estimate the quality and condition, in order to compare it to comparables (recent sales) with relatively similar quality and condition. So, if your repairs significantly increased it's quality or condition, it may contribute to a more favorable outcome. 

But, basically it sounds like you just repaired significant damage issues back to its' typical state. So, really, you probably just saved the valuation from being negative due to those damages, as opposed to increasing any value. 

Many people seem to complicate valuation issues more than needed, a strait forward way of looking at it is simply asking, "Would a buyer pay more for ...?"

As an appraiser, I am merely trying to see the market reflections of what a buyer would most likely pay for a property. And in this case, my guess is that a buyer would not pay more just because you fixed damages.

Hope that helps.

Ok,. I got a little carried away with my other post. I must've been day dreaming!  :)

If this is for a rental or sale, then moderately finish the garage, economically, so someone can use it as additional detached living area/office, etc. 

This one is easy. For me it doesn't depend on any further info, except if there is a compelling reason to have the lawn area in place of the garage. 

Otherwise, renovate the garage into a man cave, while keeping the garage elements to easily convert back with no or minimal cost in the future. Best of both worlds!

Insulate, add electrical, mini-split ac, and possibly plumbing, as desired, drywall, tape and paint, put built-in cab's on one side if you want, hang the tv, speakers, etc, install bi-fold/multi-fold doors on the side leading to a patio, and replace the garage door with an insulated one keeping the track and removing the motor, or install a carriage type garage door into the existing garage opening. You are ultimately adding additional detached living space which should add to the appeal to a future buyer/tenant, or for your enjoyment.

Come on man!  You don't need to settle for just one, do BOTH!  LOL

Then you have to invite us all to hang out in the cave when it's done!

Hey @Donna Yu!

You obviously know real estate and are a successful realtor, so you are in a great position to start focusing on your real investing goals. You have plenty of money to start and most likely have plenty of RE knowledge to rely on as well. 

My first recommendation is to have a relatively clear idea of what your goals are. You already mentioned you want more passive long-term investments, and possibly in a more landlord friendly state. Further clarification would be how much cash flow are you wanting? How long are you hoping it will take to get there?  How leveraged or conservative are you interested in being? Do you need/want the monthly income soon or are you willing to work toward a greater income later and leverage off future appreciation? Are you going to focus on sfr's, 2-4 units, 4+ apartment projects, industrial, commercial, etc?

These are not meant to be a comprehensive list of questions, but just a start to tickle the brain. You may have answers to some of these questions already, but it is a good exercise to have some clarity on those goals, then you can forge the path to get there. 
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As to your other questions: 
My first very successful deal was through a family member contact that knew of an investor that was selling one of their local rentals. And, I should've held on to that one. A good piece of advice is to hold on to all your good stuff and transfer any marginal or questionable stuff into better stuff. 

My best deal was from the mls. I just recognized a great deal and potential when only a few others could see it. 

I've had out of state rentals since 1997, and started by following others that had already done all the research and ground work - there was no reason to reinvent the wheel. Where to start depends on your goals, etc. If you want to maximize cash flow that would dictate where to look, if you want more appreciation potential, that would direct you to other areas, etc.

In other words .... See 1.

:P

In my observation, many people incorrectly think there str is exclusively a real estate investment, it isn't. It is a business, which may or may not include the real estate. This is nothing new and has been going on for many, many decades, with vacation rentals, hotels, bed & breakfasts, etc. Many people act as if this is some new phenomena, it isn't. What's relatively new is the tech that has exposed the str opportunity to every sfr and lowered the bar to entry. Therefore, it is the use of some of the RE that is changing, and some local regulations are feeling a need to catch up with these changes. 

So, when you are underwriting an str purchase, much of the business should be evaluated separate from the real estate. Unfortunately some local regulations may change altering the business potential or plan. In many areas, I think some of those considerations and regulations are warranted, since those areas are zoned exclusively residential, are filled only with sfr's, and an str is a commercial endeavor. Now, in areas where a majority of the sfr's are vacation/str's the considerations are different.

These comments are in response to some of the other posts. As to the OP, unfortunately the options seem limited. Fortunately, the OP is smart or lucky that their property still works as an mtr or ltr. I would keep tabs on the local council meetings and proposals and get in touch with the city leaders expressing your concerns. Find local REI associations or other groups to ban together to help fight the regulations.

As a non-attorney, I'm not sure why it would be illegal for the city to change their regulations regarding str's. It doesn't preclude you from using the property as it was initially intended in the zone it was when you purchased it - as an owner-occupied sfr. It is just limiting the commercial use of the property. In some areas they limit the # of any type of rentals, and that was long before arbnb. Those may be located in HOAs though. Now, if your area has many str's and that is relatively common, than you may have a reasonable argument.

I had somewhat of the opposite issue, where I turned my ltr into a legally permitted str, but unfortunately, there were a ton more unpermitted str's in the area which appeared to dilute the str business. I ended up turning back into an ltr, since it wasn't successful as an str at that time. 

Anyway, good luck and fair warning to anyone considering an str - plug this potential into your underwriting.

@Alessa LeSar Congratulations on your success so far, it seems like you are hitting some of the right buttons for your professional real estate journey! Now you can start focusing on leveraging your realtor success into your own REI success, where you don't have to split the successes with your team or Zillow.

You are asking good questions and are smart to reach out for helpful advice on here. There is a lot of wisdom here, but, it is best to take that wisdom and channel it through your own filters for your specific situation and specific goals.

@Henry Clark has a wealth of knowledge and experience and I would absorb what he has posted. It is important to get clear on your goals, your destination, etc, then you can develop the path to get there. I've seen many past posts talk about how they want a certain # if doors/units or properties, but what they really want was a specific cashflow amount and not necessarily the management headache of 100 doors. They may really want quality cashflow as opposed to quantity, and that may mean maximizing a specific % return is secondary.

In the past, I have had properties where I was getting great CoC returns (30-45%), only to realize many years later, I would've been better off never owning those properties.

Anyway, you are in a good spot, as you pointed out, your contacts can be great resources to support your REI journey. Don't get too caught up in the cash required for some deals. The most important part of REI is the deal itself. If you truly find a deal, the money is available. You may have to partner with someone or something, but it is there.

I don't think utilizing your home equity for investment makes the most sense in most situations. A HELOC may be best as an emergency fund. It seems like maybe doing a few flips may make sense for you. Since you can recognize a deal, know what it would take to add value that a buyer in that market wants, utilize your resources to get the work done reasonably, and possibly have it presold to a buyer through your agent network. That way you'd be able to build up your cash, to put into other deals and direct it into some longterm hold properties, or str or mtr (short -term or medium-term rentals).

The most important part of this REI game is the deal – finding them, recognizing their potential and then knowing how to get it done. The money is important, but secondary, and it doesn't have to be yours. Money will crawl out of the woodwork if they sniff you having a deal.

Since Detroit seems to be a subtopic in this thread, here's an actual historical population chart showing a slight recent pop increase of 0.2% for current 2024. Personally, I am not a Detroit guy, just pointing out actual facts. These days, it is easy to do basic research into many markets.

Hey Bobby, welcome aboard the wild ride of BP!

Glad to have you!

I left out the most important thing - NEVER overpay a deposit for work not yet completed, that money and person/s sometimes have a way of disappearing in certain situations like that. 

You can also arrange to get the materials yourself and shop around for better pricing, which can help keep costs down. You can ask the Sub's, or whoever you are going to do the work, which materials they need and price them out at other supply houses. Or you can find someone to do a "takeoff" of the materials needed for the job, based on your plans and then send that out for bids. There are people and companies that will do takeoffs for you, for a fee. So, that may consist of getting a list of the lumbar needed for the build, etc. Also, some suppliers will do a takeoff for some of the materials. Not sure if Home Depot or similar will do it though, but they may be able to point you in the right direction.

But, this is easier with experience and knowing about other suppliers. It is more straight forward for certain things like the lumbar for your addition. You can send out the plans