All Forum Posts by: Steve Babiak

I'd like to thank Sean for this spreadsheet. It is comprehensive for pricing rehab work and materials. Some prices are even filled in by Sean; you may wish to have your contractor that you intend to use give you the real figures, just so that you aren't too far off in (gu)estimating prices. For some people, it may be too comprehensive, since it covers all phases of construction as if being built as new construction.

Great job here, and you got my vote.

This isn't the first time a wholesaler had such ideas on this forum ... sigh ...

Local short sale investors here have indicated that they have shorted investment properties of other (failing) investors.

Banks aren't sympathetic towards the defaulted investors; they're simply looking at lowering their losses by accepting the short sale, just as with an owner occupant property. The lender will likely request a promissory note from that defaulted investor for some amount. If there are other assets that aren't underwater, those will be brought into the picture as well so that the lender's losses are mitigated.

So, the short sale here is a possibility, but what amount will the bank accept - that is the real question that's tough to tell.

Now as to the question #2 from the OP: "what if I get the number I want but can't find an end buyer."
If you get those rents and the bank agrees to your number, it's hard to imagine that you would have difficulty finding a buyer - but you'd have to have reasonable expectations for your cut in this deal. $50K profit may be unlikely, but there will be some buyer who will take it if priced right.

Since vacant land produces nothing on a balance sheet except for real estate taxes and insurance bills, some owners of land put self-storage facilities in place while they wait for the "better use" of the land to come along. For example, in my area one of those shopping warehouse clubs is now displacing a self-storage facility; in that shopping area there exist a Lowes and a Target and a movie theater multiplex, so the people are flocking to this shopping center, and the self-storage facility can now be displaced for bigger revenues from the shopping warehouse club that is now moving in.

Another place where I saw self-storage put in was in an old factory where no manufacturing was being done any longer. Again, self-storage was a way to create a revenue stream from a property that was otherwise just a financial drain on the owner.

zillow does selections of comps based on straight-line distance from property under consideration. When is this a bad idea? Say there is a river separating two towns, and that there is only one bridge connecting those towns. A house far from that bridge will be compared to one on the other side that is equally far from the bridge, because a bird could fly a straight line between those houses and they are close by in that way. But for a person, those houses could be more than a mile apart because you have to cross at the bridge; and we know that properties more than a mile apart do not serve as appraisal comps (most of the time).

And then you will have school district boundaries, where houses on one side of a street belong in one district and on the other side to a different district; the one with better school district, lower taxes, etc will have better market value to a normal buyer. What do you think zillow will value them at?

There was some other site that had done a study of some houses and zillow values. One had a missing roof, and was really in sad shape, yet zillow had given it a value far better than a nearby house that had been rehabbed.

And then you can try this experiment the next time you go to rehab some dumpy house. Get the zillow value before you start; because the condition is dumpy, your zillow value will be high. Do that rehab, and you now have a fully fixed up house. I bet the zillow value is now too low, and you could sell for more than what zillow says.

More than enough reason to not use the zillow value as your only measure of value.

Start with this thread:

http://www.biggerpockets.com/forums/52/topics/39549-rental-comps

The biggest newspaper in Phila - The Inquirer - recently ran a story from a reporter who was having issues 14 years after he agreed to allow a buyer to acquire his property by a "simple assumption" of the mortgage; sounds to me like a "Subject To" transaction.

http://www.biggerpockets.com/links/1640-a-cautionary-tale-about-assumed-mortgages-phila-inquirer

So, what measures should the "Subject To" investor use to ensure that such troubles do not arise down the road?

Doreen, welcome to BiggerPockets.

Hey Josh,

Maybe now people will realize that this is a REAL ESTATE oriented website!

P.S. Sorry about those Rockies ...