All Forum Posts by: Bryan Hartlen

@Josie Stephens What are you planning to do with it: rent or sell?  Either way check your comps. Generally, an extra bedroom increases home sale value. But you need to make sure that your market has demand for 5 BRs.  5/2 is an odd configuration for most markets (you’d usually have more baths to support larger families).  Also need to make sure that you’re not sacrificing other important features for your market (eg larger kitchen).

If you’re planning to rent then the extra BR could be a bonus especially if you’re planning to rent by room (like a university / college market).  If the target is standard LTR then again you need to consider many of the same considerations you’d have for selling the property.  

@Monish Anand - you can get STR demand numbers from companies like AirDNA (and similar). I also believe there is an STR focused forum here on BP that I would expect to have more STR specific resources and experiences that could help. You could also engage a professional STR management company. There analysis would provide projections on occupancy and avg rates and they would most likely be able to assist with trades to complete your rehab. Of course this would come with fees but you'd have more data to make your decisions going forward.

Holding costs can be killers. DOM is a downward spiral on ARV and holding costs.

We’ve started to add an extra 3 months into our holding costs even in neighborhoods where inventory is moving well.  It’s become hard to predict if/when rates will change, if/when buyer sentiment will cool because of world affairs, if/when etc etc. We’re also sticking closer to average properties within their neighborhood to reduce risk in our ARVs. The hardest part for us is initial pricing - you created a quality product and want to get top dollar so the temptation is to push the listing price.  In post-mortem analysis we’re generally better off pricing a little below ARV, generating high demand and selling faster. 

We use https://biginsurance.us/ in AL & FL (I’m pretty sure that they’re nationwide)

@Catie Fihn, the wholesale value will be the price a flipper is willing to pay. You do your same analysis as you've been doing as a flipper: Price = ARV - Rehab - Holding - Profit). That's your price to flippers. You may need to adjust the price up or down depending on the profit targets your investors look for but your familiarity with doing flips should make this an easy exercise for you.

We are on a smaller scale (and without a designer on our team) so our solution is that we pick a target comp and use it as the fit and finish guide for our finishes.  

@Chris Seveney, @Patrick Roberts and @Denise Supplee thank you.

On top of the previous recommendations - as you don’t appear to have a property manager, I’d suggest you start documenting every issue and correspondence with the tenant.  Would also make sure that any warnings are put in writing even if you are following up on a verbal discussion. 

@Chris Seveney shouldn't your title company have found the recorded CFD? What raised the flag for you to dig deeper?

Do I have this correct?
- LLC bought the property using Lender with the title exception that you noted.
- Lender was selling the note, with the same exception, which raised a flag for you?

We’re selling a SF rental property and offering seller financing.  We’ve bought, sold and created a handful of notes but they’ve always been to individuals.  

Do you treat underwriting an LLC buyer differently than an individual? We've previously used Call the Underwriter to underwrite individuals, but my understanding is that compliance is less of a concern when selling to an LLC?

Are there any LLC-buyer specific potential pitfalls that we should be wary of?

We’ve had one group want to do the purchase within a trust; specifically put the property in the trust and then sell the trust.  Any concerns with doing this rather than a straightforward sale and having them handle trust steps after the sale and without our participation?

We don't plan to sell the note, BUT we want to keep that exit open should the need arise. Anything unique about re-selling a note held by an LLC that we should take into account? Are they more/less desirable than a typical owner-occupied note?

Any recommendations on attorneys that would have experience in this that could advise and handle the transaction (in Birmingham, AL)

Thank you in advance for sharing your experience and wisdom.