All Forum Posts by: Rob C.

A house I'm considering purchasing has a pest problem, and there are a lot of rodent droppings in the garage and attic. If I go through with purchasing it, I'm planning to hire a pest control company to get rid of the pests. But what about the droppings they've already left behind? I imagine it would be rather costly to clean the droppings scattered about the insulation throughout the attic. Is this a health hazard? Do they make a house legally uninhabitable? And do average homeowners (i.e. not investors) consider this a dealbreaker when looking to buy a house?

Thanks, Rob

FWIW, I did a little more research on the properties that sold at the very low prices.

Evidently the one that sold for $38k was an executor's deed. As I understand it that means it probably went to a family member for a price that's not representative of market value?

Also, after doing some digging I was able to get in touch with the owner who bought the one for $40k. He mentioned that he put $20k into it. Still a very low all-in price nevertheless.

I'm still not sure where that puts the market value of the property I have under contract, but at least it's enough to help eliminate the thought that I may be getting ripped off if I proceed through closing.

Thanks J Scott and Jon Holdman. As J mentioned, I am looking to hold this as a rental for a while. I understand the challenge these days to get appraisals to come in at a price that a retail buyer is willing to pay. Since I'm not looking to flip, this isn't as big a deal for me. Nevertheless, I was hoping to cash-out refi subsequently (to pull out my rehab costs), so the appraisal dilemma may hinder me from pulling out as much cash as I'd like. Mostly though I'm just concerned whether or not I'm paying more than I ought to. When looking at prices down around $40000 for similar properties as the one I have under contract, it makes me wonder if I'm getting ripped off or if those properties were just an absolute steal. I'm guessing (hoping?) the latter. Or perhaps those properties had tons of liens or hidden rehab costs?

J, I get the impression from you not to worry too much about the comps so long as it cash flows for me and I can hold for a couple years at least? That's the kind of experienced opinion I'm looking for. I haven't developed my gut instinct (as far as real estate is concerned), so I may end up trusting in yours :) I actually do have an appraisal contingency on this one under contract so it will be interesting to see if it comes in lower than my offer price, and if that will give me any negotiating leverage.

Thanks again!

I'm trying to gauge the market value of a property that I have under contract. The difficulty is that the only comps in the same neighborhood over the past few years have been foreclosures & short sales. And the prices vary wildly!

Below I've listed the details of the property I have under contract, along with the comps I've been able to scrounge up online and with the help of my agent. I'm interested in hearing the opinions of the biggerpockets community regarding what its fair market value might be. I also think using a concrete example like this will help everyone (particularly rookies like me) get a feel for how others in the biggerpockets community analyze market value.

Property I have under contract:
http://www.redfin.com/GA/Lawrenceville/1964-Watercrest-Cir-30043/home/24887058
It's an estate sale. Under contract at $82,000. Needs about 15k in cosmetic work

Other comps on the market:
1) http://www.redfin.com/GA/Lawrenceville/1694-Watercrest-Cir-30043/home/24975674. under contract for $81,000. needs some cosmetic work as well (not sure how much)

2) http://www.redfin.com/GA/Lawrenceville/2054-Watercrest-Cir-30043/home/25095074 - listed at $94,900 (though I'm not sure what it's under contract at). upgraded bathrooms. good condition for the most part, but carpeting could be replaced in certain areas. Half of garage appears to have started partial conversion to 1 bed and 1 bath. Framing and plumbing, but no walls. Water heater and HVAC displaced to locations right next to where the cars would park (i.e. not to code)

Previous sales:
1) http://www.zillow.com/homedetails/1394-Watercrest-Cir-Lawrenceville-GA-30043/14803781_zpid/
Supposedly move-in ready according to description. Sold for $79,000.
2) http://www.zillow.com/homedetails/381-Fountainmist-Trl-Lawrenceville-GA-30043/14803863_zpid/
on adjacent street. sold 6 months ago for $95000
3) http://www.zillow.com/homedetails/1524-Watercrest-Cir-Lawrenceville-GA-30043/14803791_zpid/
500 sq ft smaller, but supposedly in "perfect condition" according to the ad. Short sale that sold 5 months ago for 40,000!
4) http://www.zillow.com/homedetails/420-Fountainmist-Trl-Lawrenceville-GA-30043/14803859_zpid/
on adjacent street. sold back in March for $38000!!

Thanks, Rob

Thanks for the responses.

Lynn M.,
I agree that rationalizing the airfare as part of education costs makes sense. :) I'm leaning toward flying out there to witness the inspection.

Luis A.
Thanks for the comments in regard to the radon and mold inspections. I'll probably pass on them unless there's specific reason to as you suggest.

To answer your initial question, my objective is to buy and hold long-term and start building passive income for retirement- hopefully early retirement :) I'm not looking to hit a home run on my first deal. Just looking for something low risk that will get me started on the right path. Thus, I've been targeting SFRs in reasonably good middle class neighborhoods with good school districts that have moderate cash flow potential (around 10% cash-on-cash after financing). Those properties don't exist anywhere near where I live in San Diego. That's part of the reason I started turning my focus to Atlanta.

The price points as you mentioned are also very attractive in Atlanta for a newcomer like me. I've put in offers over here in California, but have no luck competing against bigger fish with $100k's of cash to offer. Over in metro Atlanta, there are a number of properties that I can actually offer all cash on (with the intent to subsequently cash-out refi) giving me a little bit more of an edge. Ironically, this one I have under contract was able to come with an offer contingent on financing.

I started with the idea that I'd be investing locally, but after struggling so much to get an offer accepted I started to consider out of state real estate. Around the same time, it seemed like I might be able to transfer to one of my company's offices in Atlanta. That's been delayed for a number of reasons since, but it got me looking at the market over there. Aside from the points already mentioned, I started to discover a lot more appealing reasons to invest in Georgia versus California. For example, Georgia law is a lot more landlord friendy, whereas California law pretty much caters to the tenants. Unemployment percentage is in double digits over here, and businesses continue to leave California because of higher taxes and regulations. Meanwhile, Georgia appears to encourage business growth through their legislation. And with our deficit in California soaring to mind-boggling figures over here, the folks in Sacramento will have to find a way to raise revenue- I won't be at all surprised if it's through property tax hikes. etc. etc.

I'll send you a colleague request, and would definitely be interested in discussing things further with you in regard to a second opinion.

After months and months I finally got one of my offers accepted on an out of state property in Atlanta. This is a first for me. I'm planning to fly out to see the property and neighborhood with my own two eyes (for personal comfort if nothing else). However, I'm wondering if I should fly out before the inspection to witness it in person. Or wait to see that the inspection report doesn't turn up any dealbreakers, before shelling out a grand for airfare. Does anyone have any thoughts on how important it is to be present for the inspection?

Moreover, are there any other specialized inspections that I should be sure to get done? I'm planning on a termite inspection. What about radon testing? mold and air quality?

Also, if anyone in metro Atlanta has any home inspectors they strongly recommend please feel free to suggest. Currently I'm debating between:
http://www.accuspectga.com/ and http://www.callinspectall.com/

Lastly, if any of you Atlanta pros are interested in coming to see the property with me simply to give your opinion of whether it's a safe investment, I'd be happy to compensate you at a rate you value your time at, or whatever we agree is fair. I value experienced opinions. Below is a link to the property: http://www.redfin.com/GA/Lawrenceville/1964-Watercrest-Cir-30043/home/24887058

Thanks, Rob

Second try (now that i understand how to get the "mentions" to work):

Jake Kucheck Probably a bit of both. I've gotta believe they're turning a profit on their nor cal property, which they surely bought at significant discounts. However, it's also evident that they simply did not make the kind of returns they expected from rents.

Callum Kerr I'm right there with you

Matthew, I'd be wondering the same thing. It's still all a bit obscure to me, but my conclusion is that you can't buy HUD or Fannie Mae in the first look period if it's intended as a second home. However, Freddie Mac foreclosed homes do appear to be available to second home owners during the first look period. Note though that an affadavit of owner occupancy needs to be signed, and I'm not sure what that entails. More details are available on their website: http://www.homesteps.com/homesteps/homebuyer/firstlook.html

All the talk lately is about hedge funds entering the market. Interesting to hear that one of the first to enter is now looking to get out:

http://www.reuters.com/article/2012/10/17/us-foreclosed-hedgefunds-idUSBRE89G1TE20121017

redfin is also a good one. Punch in the address of the property you're interested, and it will show you "nearby similar listings" and "nearby similar sales"