All Forum Posts by: Nate Garrett

Haha!

@Wendell De Guzman 

Is the stray cat included in the purchase price?

Hi @Maurice Bey 

If you get your license and go to work for a property manager who is also an active investor (especially distressed property), you will learn a great deal about acquisition, rehab, leasing, management, maintenance, and liquidation.

I don't think you'll see all of that if you just go into the typical RE sales job.

Best of luck with your new business.

Nate

Thanks @James Wise !

That's as good a place as any to start. If you are looking to flip, you need to know what you can sell for after repairs, then work backwards:

After repair value (ARV)

- Transaction costs

- Holding costs

- Rehab costs

- Acquisition cost

= Gross profit

A note of caution: foundation repairs can be extremely costly. If you are going to proceed, I would get a structural inspection done to determine the extent of necessary repairs as the cost can vary widely. Joe Ramey with Stresscon in Tulsa is an excellent choice for structural inspections. 

Also, structural repairs can have an impact on the demand and selling price of a home. You will need to disclose the repairs to the buyer when you sell. They rightfully get a little nervous knowing that the foundation has had issues.

@Kyle Critchnau 

It sounds like everything went perfectly to me!

I'll make the assumption that you are in your 20's or 30's. Us youngins (including myself in this group!) are hard-wired to chase after every deal that comes across our desk. We all could use a little more patience! If I had a nickel for every bad deal that I almost rushed into, well, you know....

Not saying that this opportunity was a bad one. Heck, it might have been a home run.

But -

There will always, and I mean always, be another real estate deal. You won't, however, get another chance to be there for your family. 

It is possible, but at least in our market (Tulsa) it is becoming more difficult:

Step 1: Purchase the property at a deep enough discount so that total cost, including rehab and transactional costs, is below 75% of After Repair Value (ARV).

Step 2: Get a hard money loan for purchase price + repair costs. The loan terms won't be cheap. You may have to pay points up front and the interest rate might surprise you. 

Step 3: Complete the rehab as efficiently as possible so you aren't paying the exorbitant interest on the hard money loan for an extended period of time.

Step 4: Apply for a 75% LTV conventional refinance mortgage with the mortgage broker/banker of your choice.

Step 5: Make sure you speak with the appraiser before he/she visits the property. Tell them about all the work you have done on the property and any favorable aspects that would increase the property's valuation. If you have any favorable comparable sales (with MLS numbers), give them that information, too. The appraisal is important because the lender is only going to give you 75% of the appraised value.

In Tulsa, these deals are typically only found on properties requiring extensive rehab. Cosmetic rehabs are being priced up by investor/homeowner demand so it is nearly impossible to end up all-in below 75% LTV.

Hi @Bob Malecki 

Have not done any NPLs, but have purchased several properties via the Tulsa county sheriff auction.

I would get the court case number and look it up on OSCN. Many of the court filings are now being imaged and can be downloaded. Probably would also be a good idea to discuss the case with the attorney that's handling the foreclosure for the seller, if the seller would permit you to do that. 

I would also try to determine if the property is still occupied and have a plan for post-foreclosure actions, if you are going to proceed with the foreclosure.

Information about the Tulsa county sheriff auction process can be found on the Tulsa County Sheriff Website.

Hope that information helps.

Nate

Hi @Natassha Brown 

It's funny you should ask. Just yesterday I did a blog article titled "The Best Time to Buy Real Estate" about that very topic.

You can click the graph to get an interactive version where you can look at more data. The Federal Reserve has a ton of housing data by the way, if you're into that kind of thing.

As you can see, the median sales price of existing homes in Jan/Feb are often 10% below the peak summer months. We have been able to find buyers some terrific deals during the winter months, especially when it's snowy/icy outside. There aren't too many buyers that are willing to brave the weather, even for a good deal.

On the other hand, as @Sam Sendgraff said, winter can be a terrible time to sell a property. You can take if from me, as I tried a couple of times!

So the short answer is, winter = good buying opportunity, bad time to try to market a property for sale on the MLS.

@Ryan Harthan 

Good definition, except for including capital expenditures in expenses. Cap X is not included in the calculation of NOI.

Nate