All Forum Posts by: Travis Sperr

Also a little known strategy is that rush appraisals that cost a couple hundred more, hit the value more often than not, might be difficult to get your mortgage originator to order  rush on a refi. 

Roof - adds no value, unless in disrepair - houses are expected to have a functioning roof.

Electrical - adds no value - especially if systems are consistent with the neighborhood/age of property. - might consider upgrading fixtures if it will make the place brighter and a little more appealing.

Curb Appeal - best bank for your buck- sweet equity.

Appraisers are people too, not robots, so a home that feels comfortable, well maintained and clean will affect the value. If your house looks shape from the street - he may use comps that also have better curb appeal- just because the listing typically have the front picture.

Other thoughts might be paint and carpet if you haven't already, to make it fresh.

At the end of the day if comes down to comps - meet the appraiser there - show them improvements you have made, make sure he knows the rental income it produces - provide lease. Provide a package of 4-6 great comps - a couple sold, one or two under contract and one listing. I have found when you do the appraisers homework and do a decent job, they will use your information. You are trying to show a $60k increase in 8 months - show why your purchase was at a discount and where the market is.

This is a duplex - so the appraisal will probably be about $600 - worth the gamble. but don't get carried away making improvements that may increase marketability but not value.

I funded a deal with a similar scenario about a year ago - the title company maybe able to help with this - arranging the payoff and monies. Or just make a call to the mortgage company and explain exactly what is going on. Best guess is sign and send to mortgage company as normal and upon payoff the seller will receive a refund, probably around the same time the escrow money is returned. 

The ever confusing question of what it costs to build per square foot. Here is the immediate problem you are going to have in this arena - everyone uses different math it what is costs to build. Hard costs, soft costs, tap fees, actual construction, etc.

I am working on a deal right now we are budgeting $175k per ft - from demo/site work to build to landscaping - all tap fees, engineers, architect, etc. this is for an 8 unit town home development reselling around $400k each.

I see single family construction a little lower - closer to about $125 a ft all in. (everything but land). All depends on price point of the end product and who you are working with.

Sell it. Cash out in this crazy market and set up shop in OK. You will be able to profit without paying taxes on the gain. If you were living in OK you likely wouldn't buy this house in Colorado, so why keep it. You could probably buy a home to live in and two rentals with the proceeds (using financing) exceeding the cash flow of this one in Tulsa. 

Your cost to sell will likely be closer to 6-7%. 

Hedge Funds have been buying homes in the Twin Cities for years - ask anyone at Renters Warehouse.  We have clients flipping houses to hedge funds that will hold them as rentals. 

Always depends on the lease - but as long as you send the letter to the tenant accounting for why you are keeping the money within 30/60 days - again depending on your lease. Obviously not worth trying to collect any unpaid rent for the lease term if you are going to sell the property. At this point it is much more important to get the property back in good shape than to try to get the money from the tenant. 

Rental property = cooking in a crock-pot

Rehabbing = Cooking in the oven

Wholesaling = cooking in a deep fryer

Rental property typically isn't profitable (or not extremely) in the short term, a better long term play. If you are looking to generate immediate income or cash flipping or wholesaling is the way to do it. I use the term "immediate" loosely because it has a lot to do with your ability, market and focus.

@Matthew Berry Do a larger deal - with a good liquid position you can operate in the higher price point ARV $500k and higher - these deals are typically much more profitable. Tying up all of your cash to make 10k on a deal is scary place - one unexpected issue, price reduction, etc and you are flipping houses for community service.

The flip deals are still there, but the market has changed. Rents are so strong that the low priced houses are going to owner occs and land lords. We fund a ton of deals in the Twin Cities, the price point is going up and the repair budgets for the deals we are funding. ARV averages over $300k and repair budgets between $50k-$100k. Also seeing a ton of scrape and infill new construction from $350k to $1.5MM. Still a lot of money to be made in that market.