All Forum Posts by: Shawn Clark

I'm a nuevo Real Estate Investor, and I will close on my first property on November 1. Based on many books, blogs, vlogs etc., it seems that cash flow should always be the priority. Therefore, my first plan of action, after I close, is to appeal the recent tax assessment on the property based on my purchase price. I bought the SFH for $76,500, however, Baltimore City assessed it at $110,333 (and I'm thinking that's what it has based the taxes on). In addition, while I was under contract to buy the home, the appraisal came in at $92,500. So, I'm thinking if my appeal is approved at either purchased price or recent appraisal, my tax bill will be cheaper, therefore increasing my cash flow. Baltimore City real property tax rate is the highest of any jurisdiction in Maryland with this property being assessed at 2.36 percent.

Does anyone have experience with this? Any tips you can share will be much appreciated.

...when I have the funds available to purchase...

@Olivia Darling Who says that wholesaling in AZ is legal?  I know of many people that do it, but then again I also know many people that speed down the highway, but that doesn't mean speeding is legal.

Arizona Revised Statues: 32-2122. License required of brokers and salespersons

A. This article applies to any person acting in the capacity of a:

1. Real estate broker.

2. Real estate salesperson.

3. Cemetery broker.

4. Cemetery salesperson.

5. Membership camping broker.

6. Membership camping salesperson.

B. It shall be unlawful for any person, corporation, partnership or limited liability company to engage in any business, occupation or activity listed in subsection A without first obtaining a license as prescribed in this chapter and otherwise complying with the provisions of this chapter.

A.R.S. § 32-2101.47

“Real estate broker” means a person, other than a salesperson, who, for
another and for compensation:
(a) Sells, exchanges, purchases, rents or leases real estate or timeshare
interests.
(b) Offers to sell, exchange, purchase, rent or lease real estate or timeshare
interests.
(c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange,
purchase, rental or leasing of real estate or timeshare interests.

...It goes on to list about two dozen other activities that are reserved for brokers only.

Don't mess around with people in foreclosure, especially if you don't know how to handle it.  These people are on the brink of losing their homes and need to speak with qualified people who can actually close the deal 100% of the time. 

@Stephanie Walkes Here is a quick breakdown of the prices on a home like this: 

1) Remove and replace kitchen (Gut kitchen, install granite countertops with Island, SS appliances (microwave, refrigerator, stove, dishwasher and garbage disposal) remove wall to dining room.- $8,000.00

2) Remove and replace Bathroom (new tub or shower, new vanities and toilet, ceramic tile, paint, bath accessories). - $4,000.00

3) Frame and finish basement - $6,000.00 (with full second bath included will run about $10,000.)

4) Painting a property of this size including the finished basement - $2,500.00

5) Remove and replace all doors (about 10 in this property) with 6 panel hollow doors - $15,000.00

6) Install HVAC to include Furnace, condenser and ductwork - $7,500 (If the ductwork is already in place we can have a 2.5 ton furnace and condenser installed for $4,000.00(ductwork is the most consuming and labor intensive part of installing a HVAC system)

7) Install carpet on second floor(This includes all three bedrooms, hallway and stairs) and basement $2,300.00

8) Refinish hardwood floor and new color of the stain of for the living room and dining room - $ 900.00

9) Replace windows with all new energy efficient vinyl windows - $3,000.00

I think that's all of the big stuff. Let me know if you need me to explain in more detail.

@Shawn Clark - did you see the part about making over $1000/ hr on referrals?  Also, I have another sales gig that I work, and I like to hike and fish a lot, so I really don't have much time for the paper-work and taking pictures and putting up signs and all that.  For the referrals, the leads are coming in from my "I Buy Houses" marketing.  So, I'm already doing that marketing anyway.  If it's not something for me to buy, I do a little sales script with them while I have them on the phone to build them up and get them ready to list with my other Realtor friend, then I send him a text or email with their name and number.  He does the rest.  We're all happy.  Win/win/win.  I spend maybe 15 minutes on it (30 minutes max) and make 1/4 of the side.

One thing to remember is that you can often make good money on "un-motivated" leads by referring them to a good Realtor.  I often make over $1000/hr by doing this.

@Shawn Clark ,thanks for the note.  That is the way I look at it too. It is definitely an expense but if these expenses turn into money making investments, the income-expense gets reported on a specific Schedule E  and I am told that if the expense is pre advertising date for a rental, they they are to be capitalized into the purchased rental or other property only to be recovered when depreciated or sold.   See @Brandon Hall blog on BARRR vs BRRR. But what about the expenses of the dry hole look-sees? Where can such an expense be reported?

Cheers,

Buddy