All Forum Posts by: Atampreet Singh

Sounds like a great idea. Do you know of any good ways of finding these type of clients. I looked up a website 'Stowit' that i am going to try, do you know of any other?

Thanks

Quote from @Drew Sygit:

@Atampreet Singh Recommend looking into rentlng out the pole barn separately. 

There are a lot of contractors, car collectors, etc. that will be interested. Just make sure you have a tight lease that requires them not to store anything outside (so it doesn't look like a junkyard) and they don't interfere with STR guests.

Quote from @Josh Young:

Quote from @Atampreet Singh:

Quote from @Jeff Copeland:

Good advice here already. We're going to start seeing this a lot over the next year or so. Up until now, appraisals (looking back 6-9 months) have supported prices from 6-9 months ago. Not anymore. 

Pretty soon, 6-9 months ago will reflect last Fall, when interest rates spiked and sales stalled. 

The thing is if I wait and don't find a layout like this for another 5 months, I would have lost about 20k in earnings. So based on that I decided to accept the 250k paying 15k over appraised. 

Any follow up thoughts? I am thinking I ll be able to get it refinanced in a year or so when rates go down. 

Exactly why you have reserves and extra cash on hand, you might have missed out on this deal otherwise. If $277-8k made sense then you should be better at $250k, you just have a little more cash tied up until you cash out refi in a few years.

At the same time I am appealing the current appraisal by providing alternate properties the appraiser could have used that sold for much higher price per sq feet and are in similar area just half a mile further out. 

This appraiser went up to 2.3 mile from Subject property and right around 3 mile there are mutliple (better) comps. 

will see if it works otherwise no issues just paying higher down-payment essentially 






Quote from @Bill B.:

You were happy at $277-8k right? You should be ecstatic at $250k. You just “made” $19k. One person out of 330 million in the country made up a number of $235k. 

If you got 10 more appraisals do you think any of them would be the same? I bet you $100 at least 8 would be over $235k. As you mentioned it’s going to be a rental for you. Guess what. Properties have different values to different buyers. How much is a tear down in San Diego on the beach worth to an owner occupant who can’t afford to tear it down or rebuild? Now offer it to a flipper or a builder or a well off buyer of their dream property. And yet the appraisal would be the same for all 3 buyers. 

Yes, may be I am too attached to buying this property right now, but numbers are there as well! 

Quote from @James Hamling:

Quote from @Atampreet Singh:

Quote from @Jeff Copeland:

Good advice here already. We're going to start seeing this a lot over the next year or so. Up until now, appraisals (looking back 6-9 months) have supported prices from 6-9 months ago. Not anymore. 

Pretty soon, 6-9 months ago will reflect last Fall, when interest rates spiked and sales stalled. 

The thing is if I wait and don't find a layout like this for another 5 months, I would have lost about 20k in earnings. So based on that I decided to accept the 250k paying 15k over appraised. 

Any follow up thoughts? I am thinking I ll be able to get it refinanced in a year or so when rates go down. 

Reading between the lines, your STR analysis on this property is that it can do "as much as" $4k per month in revenues, as STR, correct?

On a $250k buy, that's a "lame-duck" performer in my book.     I wouldn't have bought it on that fact alone. 

I get a strong sense that your far too focused on just buying something, vs buying a PERFORMING Asset.     That appraisal was a life-line, it was trying to help you, save you from grossly over-paying. That's easily evidenced by seller readily chopping things down many thousands right off the bat.     Reading between the lines again, this leads me to think you have a joke of an agent "defending" your interest on this. That and fact your on here asking vs talking with your buyers agent. 

I havn't seen anyone bring up the obvious 1st step of IS that appraisal legit? Don't try to fight it as immediate reaction, try to UNDERSTAND it. Than beat the seller over the head with it.     If your not ready to walk away in an instant, you already lost. 

Forget the future, ignore everything other than this 1 deal. NEVER buy something based on fear, if your operating from fear, WALK-AWAY. Fear based decisions are ALWAYS regrettable. 

Quote from @Derek Caffe:

See if the seller will carry the difference. Your appraisal came in at $235K, and seller is asking $15K over? That $15K can be seller financed at terms that still makes sense for both parties. I don't know expected return or cashflow on the property as a mid-term rental, but you can run your numbers and see what you're willing to sacrifice in cashflow to pay off the seller financed portion.

Yes, that's what we are doing this morning! I found some other comps that sold for much higher price per sq. foot and my realtor wrote a detailed email to my mortgage broker! We'll find out what happens. 

Quote from @Luka Milicevic:

Quote from @Atampreet Singh:

Hello all,

I am under contract on a 4 bed 2 bath home in one of the nicer suburbs of Detroit, Auburn Hills. 

I am under contract with seller right now for 277k with 8k in seller credits negotiated upon inspection.  

Now, somehow, appraisal has come in at 235k.

Since, this house has a lot of earning potential for me as a mid term rental airbnb. I would like the deal to not fall through 

Seller has sent in writing a counter for 250k with no concessions, and has asked me to sign mutual release if I don't accept. 

Any thoughts from experienced investors? 

how would you go about negotiating price or buying with sellers terms as is? 

 I don't know if it's mentioned here, but you can ask for what's called a reconsideration of value. Send in comps to the appraiser and have them review those comps and see if they can come up on appraisal....at least to 250k. 

After talking to multiple investor friends everyone suggested to take the deal because appraisal is just temporary in this case. So.   

Thanks for your reply though. This was my first bigger pockets forum post. Pretty excited to see some responses. 


Quote from @Madeline Lamour:

Does the price at 250000 still make sense for you? Do the numbers still work? If they do and you can afford it, then 250 is a possibility if you really want this property.

now, you can make your own offer explaining the situation. We just did that for our primary. We explained matter of fact that we do not feel comfortable offering that much above appraisal price (under contract for 425, appraisal was 355!!!) Because 1. The current market and a potential recession and 2. The bank only financing 70% of appraisal price, paying that much would wipe out all savings and we still needed to renovate the place. So we counter offered with 370, still above market but way under asking, as that was something we could afford and would leave us some reserve. Then we prayed they would accept. They did because they wanted to sell and they knew other potential buyers would also balked at the appraisal vs asking price. 

so if you feel like gambling a little, write a nice letter explaining your thinking and ask for something you can afford. 

If you really really want it, then accept 250.

Remember, the other side is also gambling.

hi Jeff, 

Yes, it was a big shock to see appraisal come in so low. I am taking this one because I know we ll cash flow about 40 percent cash on cash return at minimum so. . 





uote from @Jeff Copeland:

Good advice here already. We're going to start seeing this a lot over the next year or so. Up until now, appraisals (looking back 6-9 months) have supported prices from 6-9 months ago. Not anymore. 

Pretty soon, 6-9 months ago will reflect last Fall, when interest rates spiked and sales stalled. 

Fingers crossed!!! Hoping it's a good buy. If not, I ll just buy 3 more houses at lower price later this year to average down. 


Quote from @Madeline Lamour:

Does the price at 250000 still make sense for you? Do the numbers still work? If they do and you can afford it, then 250 is a possibility if you really want this property.

now, you can make your own offer explaining the situation. We just did that for our primary. We explained matter of fact that we do not feel comfortable offering that much above appraisal price (under contract for 425, appraisal was 355!!!) Because 1. The current market and a potential recession and 2. The bank only financing 70% of appraisal price, paying that much would wipe out all savings and we still needed to renovate the place. So we counter offered with 370, still above market but way under asking, as that was something we could afford and would leave us some reserve. Then we prayed they would accept. They did because they wanted to sell and they knew other potential buyers would also balked at the appraisal vs asking price. 

so if you feel like gambling a little, write a nice letter explaining your thinking and ask for something you can afford. 

If you really really want it, then accept 250.

Remember, the other side is also gambling.

The layout of the house and location works for what I intend to do with this property. So, not knowing when I ll find a 5 bed 2 bath house that is almost turnkey is the reason i accepted the 250k. 

And the house is on a double lot with 30 x 30 pole barn detached garage that i intend to turn into a separate dwelling one day. 


Quote from @Atampreet Singh:

Quote from @Drew Sygit:

@Atampreet Singh given the market is not increasing anymore, what do you have to lose by walking away?

You can check back on the property in a month and it it's still there, make another offer.

REMEMBER - investors make their money when they buy!