All Forum Posts by: Steve Milford

I think this conversation comes down to an available marketing budget. 

If it is slim use a Realtor and go look at every ugly house you can. You will find value. 

If you have money for marketing, do this in ADDITION to working with a Realtor. 

And stop analyzing deals by number...go walk properties, get a feel for them. Everyone wants to analyze everything to death. Look analyzing by number takes all of 10 minutes if you have been doing it awhile. You probably have a spreadsheet that has all your numbers and fun little calculations. Your Realtor can give you comps for ARV. But true evaluation of comps is after it a property is seen.

Here is how I do it for my clients. I show all listings in my client's price range based on property type. I.e. detached, condo, etc, and then they tell me what we go look at. 

IMO, your Realtor shouldn't tell you no, they should explain to you the terms, and let you make your own choice.

What is a lot of houses to view is in the eye of the beholder. My last buyer walked through an average of 5 homes a week for 26 weeks and we looked all over the place. 

Regarding what the media says, I give all that a grain of salt as a few houses can skew the numbers horribly. 

The best advice is have your financials in order and be ready to write an offer on a home that appeals to you asap. The market is swift and because of low inventory many want close to retail no matter the condition. In Vancouver, on homes that my buyers want, we usually are sending offers before the start of the next business day. Meaning, if we view a house at 5pm, I am contacting the other agent by 8pm that an offer is coming and that agent usually has it in their hands (signed) before midnight. If the home is not in the MLS, have your agent contact directly (it's called a dual-agency transaction), or you can do it without an agent if you want.

And then ultimately if no properties work, like Joe said, search in another market.

It comes back to your marketing budget and tracking the results of your efforts, which you should always do.

After you send out direct mail, people that are interested will usually Google you and or visit your web site.

Ranking high and getting a lot impressions is one measurement, yet direct contact is what I measure most. I.e. what efforts result in best ROI to make the phone ring. In simpler terms, how much money did I spend to make the phone ring AND then how much income came from that lead.

I.e. Let's say I spent $500 in direct mail and I made $7k as a result. That translates into a decent return. It doesn't always go like that though. Another thing to look at is the durability of your marketing. 

For that I mean, how long does your message have staying power? Online impressions are a few seconds and then they are gone. Vs I have found post cards sit on the fridge for a few weeks. No matter what, be prepared to spend time, effort, and money to get phone to ring.

When I find a property not being marketed fully i.e no inside pictures, this usually means there is an inside problem. It can help or hurt you. 

How to find local rehab costs? Materials can estimated through HD or Lowes and then they usually have installers as well. Or call a local GC. 

Have a local Realtor tour and like mentioned, they will ask you for proof of funds or pre-approval to make sure your serious. If I had a buck for every time a buyer told me they were serious but didn't have proof, I'd be a rich man. 

Always have a property inspected. The reports will disclose problems and be your initial eyes and ears. If is warrants further attention, then go visit. Only you know what exactly what you like or don't - I always go with my gut. I.e. there is a property here in town that has a great price and is in decent condition but has been on the market forever. As soon as you visit you see why, there is a big homeless camp across the street. This can't be seen on any photos already published. If I or a personal rep didn't visit there would be no way to know.

Hope that helps.

In what area of expertise?

For me, getting my license was a launchpad to further training and opened up lots of doors.

Pay what you need to based on your exit plan and look at the value of land/what it sells for as well without a building. 

Personally, I would insure for replacement cost. If the duplex is a good rental, why not continue to let it be?

Browse your area of interest to learn here.

My 2 cents: 

Use a Realtor or someone else experienced to pull comps. Comps are best of homes with similar features sold within a short time frame. In my market that is homes at 1/2 or less from site home sold within last 3-4 months. Do your comps come in line with your market trends?

You will have to qualify to purchase BEFORE you house hack. It doesn't all happen at once. Can you do that?

You state costs to be payment + utilities so income you will need to separate utilities as well. By your numbers, income actually is ($775 x 2 rooms) - utilities. This makes your negative cash flow even greater.

Vacancy rate amount seems low and cap exp should be broken out as well. If you going to rent, you will also want to have reserves.

Evernote has an app. I use a Google Task list and multiple Google Calendar. Another key is to designate time for what is important. As the saying goes, if it isn't on the calendar, it isn't important enough. As crucial is to measure the amount of time you are on social media and then reduce it. 

A contingency is your get-out-of-contract card.

As such be sure to include it in every contract unless you think you it is a slam dunk for a win.

As a Realtor, I have never written a contract without it. You can make it whatever you want and it is nothing more than an if...then statement. I have never seen a pro-flipper not use one - yet many write contracts on property sight un-seen. They can do that because of contingencies. Some are generally accepted though I have written some that seem outlandish. All that matters is that both sides agree and everything is negotiable.

You should know comps of ballpark ARV and allowable expense (to make the deal work for you) before you put an offer on. It makes no sense to think there is $25k room for repairs only to get a couple of verbal ballparks that need $40k. It won't work. Basically it always comes down to this simple truth:

You win by buying according to your exit strategy. 

Want to know what to repair? Visit other homes on area to get a feel and review comps. Get a Realtor for that. Also, don't over-fix or upgrade, you won't get you money back out. 

Contractors will do what you tell them to do though the level of fixes that you want may be different than what contractor is used too. I have seen this come up a lot. 

(With my contractor and I, it took us a few discussions to identify what vs. how much to fix. I kept focusing on price and I wanted certain upgrades with reason though realized that what I wanted was not feasible...he gave me alternatives that worked.)

I then walk a property, feel it, smell it. Buy a contractor lunch to go with you for his/her time and ask for a verbal ballpark. 

I have a contractor friend that can ballpark to within a few thousand (I have tested his numbers-they are solid).

Make offer, perform due diligence regarding contingencies, enact contingencies if needed, or move forward.

I also never lose earnest money if I back out of a deal.

Essentially, all homes are as-is based on price you are willing to pay and a contingency helps you when you get a better idea of what you are buying. If it is not a reasonable win for you based on your goals, why wouldn't you back out?

i know people that still go and smell. Have a Realtor put together a tour and go see or have a Realtor visit and do a video of it and then send to you.