All Forum Posts by: Burt L.

When meeting with a seller, I would still know what the zillow value is. I have been caught off-guard by sellers quoting the zillow value and its helpful to be prepared to discuss that value as its what they may have "lodged in the mind" - as well the useful discussion of ARV vs. As-Is value.

Oh boy - not a road I really wanted to travel... At the risk of Jon Holdman holding me down for a new pummeling on the 50% rule, does this really apply to new construction - when operating costs are lower?

Local investors are desperate for deals as this market has appreciated so much, and rents are strong and continually on the rise due to a virtually non-existant vacancy rate. Vacancies are often brought up in a humorous light at REI meetings now- they are just cause for another rent increase.

I can feel the bruising developing already.....I want to belive there is an additional route as a 500k value wouldnt cover the project costs. This may be the end of the path on this YL deal.

What a website! Where else can you go from direct marketing to doing calculations on land development- in a few moments? Its good to learn that the $100 per foot figure I was quoted isn't a hard number, and probably was just a quick response from the person quoting it - knowing that they can't go wrong at this rate.

I have to say that obtaining a H/B report to see if a deal is a deal, is daunting. If one had to do this for each SFR, it would be very hard for all the seminar promoters to gather people.

How would it be to look for ROI based on rental income instead of taking the profit right at the buildout and sale? Rents on either 4 or six units of three bedrooms should go at $1,400 each, or $5,600 or $8,400 monthly. Is there a cap rate formula to get to an acceptable return for such a proposed project? The cash on cash could be quite good in the current interest rate environment.

It doesn't seem that a large apartment building would be workable, as though the property does have duplexes at three of its four corners, at the fourth corner is a SFR. The apartments buildings down the street are all bordered by duplexes, before transitioning to SFR's.

As mentioned, the block is zoned 3-R, though no one else has gone to 3 units on a lot. Two duplexes to the east, and across that street - is the first apartment building of maybe twenty units.

Entering int a contract like this would be much different that the usual rehab project, and I don't know how to term it. I'm reluctant to have others come by the property address to help me assess the potential project, as I know what can happen if a property isn't already "under control". As I've seen at BP, having a trusted appraiser contact is very helpful.

I'm "out of my own league" on this, but am more than ready to try a different league anyway.

I much appreciate the reply, Will Barnard. It seems somewhat similar to single family calculations where one starts with the ARV and works backwards to the max allowable offer.

I spoke with a general contractor, who said the cost per ft. starts at $100 per foot (no grantite, stainless, etc.). He didn't seem quite as informed about zoning, but said that if zoned R-3, that 3 units should be allowed per lot. Nothing else is larger than a duplex on the block, except for apartment buildings at the end of the street.

So it looks like there would have to be three units each and/or a higher value than the 200k per unit. Only one of the many duplexes is townhoused and they are each 1780 sq. ft. There aren't any other townhoused comps; the somewhat inaccurate Zillow shows them at 225K each, or $125 ft. The assessed values of $200K are stale as they are assessed each two years and there has been a substantial gain in value. since. That duplex was construcgted about about 17 years ago, though I dont know when the party wall agreement, etc. was done.

I am likely confused on an aspect of the "dirt" calculation provided, as it seems that the debt service of 21K for the project was applied to a single unit, so there may be a little more room for the dirt/profit calculation. I may be entirely missing something, as well, which is more likely.

It was suggested I get it under contract, with a longer than usual time to closing, in order to look further at the feasibility of it. I would need a stronger than usual contingency though. It seems I still have to find some more "exit value" and having two three-plexes likely doesn't provide the same 200K per unit as duplexes would. On a spread of $25 per foot ($125 exit value less $100 costruction cost per foot., it wouldn't seem to work. It would take 10,000 finished square feet to meet the sellers price of $250K, with no profit. It would seem the spread would have to be larger, or there wouldn't be any construction locally.

Recent single family sales show a value of $150 to $170 a foot for smaller houses, dropping to about $110 a foot as they get over 2000 sq. feet. Maybe smaller units would be better?

I'm certainly open to further suggestions on this analysis, or whether I should just put "the head down, turn the jazz up, and get back to stuffing envelopes". A land deal would definitely be a cool change of pace. When I townhoused a duplex before, I created the comps the other landlords told me they were quite pleased with. At least it has already been done here and the builder wouldn't be such a pioneer on this potential project, other than three units per lot.

I don't know if all this was only a very interesting exercise in feasibility. Is there anything else I might consider? The general contractor said this county is one of the easier ones to work with.

I sent a YL to a house built around the turn of the last century that was the orginal farmhouse that is now surrounded by duplexes, one of which has been townhoused. The lot size is 32,000 feet and and extends from one street to another, with frontage on both streets.

I know nothing about "bringing property out of the ground" although I did townhouse a duplex some years ago, creating an increase in value of about 50%.

The cost of the lot with buidlings (to be removed) is 250k and the duplexes next door are 300K each, and the one that is townhoused has its asessed values increased to 400K, combined. Thus it would seem that there could be two lots of 16k sq. ft. with four townhomes of 200k, or 800K in total. The local market is strong and rents are even stronger.

I would be looking for an assignment fee to the eventual developers, and this could a great find from a yellow letter. I don't want to bring in potential builders until I "know what I have" or suspect I'll be taken advantage of as am not knowledge about this now. I dont know about construction costs, permitting, etc. It is zoned R-3, or thee units per lot so could conceiveably have three townhomes on each lot, or six in total at a total value of 1.2 million.

The owner is a burned-out landlord who is just finishing an asbestos abatement on the farmhouse and plans to turn it back into a rental, but is clearly tired of it and the property. It was the original farmhouse for what once a 6000 acre farm: he said the title work on it is 34 pages long.

What might be my next step(s) in determining if this is a workable deal? It its current use its not a deal.

Rick Harmon - after reading my last post again in the lite of day - I only mean that my first distinguishing between "last market recording date" and "last market sales date" at Listsource didn't add to my own earlier post as the difference in those dates doesn't help with locating inherited properties. Its easy to step on toes, online, and I was only referring to my own earlier post. Whew.

Rick Harmon - the only difference between last market recording date and last market sale date is the timeframe between the date of closing and date recorded and probably wasn't helpful info for the thread.

I have lost the trail with both listsource and realquest as they don't pick up deed types well, and one cannot screen for transfer sales prices of zero - and 1 to 101 picks up almost zero. So not much else can be done besides pay Salesteam live $2500 for a sign up fee, and $200 per month for access to their list. Unfortunately, this is not in the budget for just access to the list, before the costs per piece -of a newer person in this.

After I called salesteamlive and was on their waiting list a day for a call back, I then received a 25 minute sales pitch from none other than Dann Doraan the marketing mann. I just wish I didn't have to pay so much for access to obtain the product.

The interesting part is that their answering service personnel tell you that you can place an order if you give them your credit card number, but can't provide any information on pricing per letter/postcard, ad copy, return address, type of stamp, etc. without the returnn call from sales first. This was a little less than stellar, in my opinion.

Regardless, I'm still in a stuck place on this and no one I've spoke to at different list providers have been encouraging about it.

Found this thread in the archieves and its right on point for my present situation.

I am trying to build the equivalant of an inherited real property list through Listsource. US Leadlist is sold out in my market, and Salesteamlive (the only other group I know that markets an Inherites list) requires a $2500 set up fee plus $200 per month to mail unlimited inherites at .58 per postcard and $1.40 per YL. K. Marie Poe mentions above that the list cos generally want you to think you can't DIY it yourself, and I am seeing that.

I don't know what the other companies have access to that Listsource doesn't. I've been told the data is run through 4 different databases but the Recorders Office and Assessors info, etc. has to be the same.

I've spent much time with customer service at Listsource (long hold-times waiting for reps overseas) and have arrived at a criteria that uses:

1. Last Market recording date (As opposed to Last Market Sale recording date)
2. 100% Equity - as no loan
3. Absentee Owner

I obtained 1300 results in my market, using my square footage and price ranges. I then looked at the sample of three results of the list, and saw REO cash, HUD cash, and straight cash Purchases. I then bought a list of 60 results and have got the same results through the first 20 examples checked. Not so sure I want to pay for this particular list of 1300 results now.

I then screened by Last Market Sale Deed Type accourding to another rep - PR deeds, Trustee deeds, Interfamily Deed, Survivorship deeds, etc. and got less than ten results. There were 88 PR deeds, I overlooked - but I believe they were from the PR selling the property. Another rep at Realquest (another Corelogic Co) said the deed types just aren't picked up well. In my local MLS, the many types of family transfers/Revocable living trusts are simply shown as "Intrafamily transfer and dissolution" and so don't specify. That description is broadly used for family/divorce/RLT transfers.

I also tried to filter by transfers for a nominal amount - $1 to $10 as mentioned in the thread, and got three results. One cannot specify zero dollars in Listsource, that I've found.

Michael Quarles mentions that a person has to filter probates against real property, so I am starting with real property, and trying to work backwards, I believe.

Steve Babiak also mentions determing the the type of document a county records transfers non-market transfers with. I spoke with a person in the Recorders office, who said that it would be a beneficiaries deed, but that was already checked. I don't know that they gave me very good information. I don't believe my state has a property transfer tax, but I should check further.

Would there be any further suggestions? I would like to avoid the $2500 sign up fee, and a $200 monthly fee ($2400 per year) for only access to a list then priced at .58/$1.40 per mailer that I think I can get close to DIYing, as Marie commented.

I submit this dilemma to the wisdom of BP-its been a long two days of customer service reps and sales pitches, etc.

Appreciate the replies and others DFD insights.

Brandon Turner Combining items like tall weeds, no curtains in the windows sounds beneficial; I've been mailing to everything with as little as peeling paint or worse, which probably isn't enough to go on. I"m looking forward to driving after a snowfall to see who doens't have vehicles going in and out, but its been a lite year for snow.

I certainly have used Listsource, but also wanted to add some rifle shots to the unsightly, more costly shotgun blasts.

Josh Rogan

I"ll add FSBO's to my list too. And I have found people I run across more than happy to tell me about properties in poor condition that are dragging down their nearby property values. A fellow who lived across from a hoader house was more than happy to tell me all about that property, and another nearby one as well, in an expensive neighborhood. Neither hoarder house owner has called on my direct mail pieces, but I bet they still have my letters somewhere.

Thanks for the additions.

When driving a neighborhood, I find its much easier to find properties that seem distressed - with wood exteriors as brick is such low maintenance. In those with wood exteriors, I want to mail to about each fifth house, which is probably too much. Houses with peeling up roof shingles are simple enough, but those with peeling paint on wood trim might not be sufficient to mail a letter?

The time of year is also helpful, and of course unmowed lawns are an indicator, but doesn't help in winters. I have thought of driving a day or two after snowstorms to see what houses don't have car-tracks in or out of garages or any other cars at the property.

A bird dog I know was also getting some heat from a wholesaler for sending him the addresses of each house with unmowed grass - as thats not a sufficient lead.

After selecting a property, I look to see if it has sufficient equity and then mail to the owner of record, whether it owner-occ or abssentee owned. Wanted to see if others had more focused suggestions as I'm likely taking too broad an approach. I seem to want to mail to about every fifth house in some wood-faced neighborhoods, and there are nearly none in some better brick neighborhoods.