All Forum Posts by: Brandon Roof

You are getting infinite CoC ROI because your refinanced mortgage is for as much or more than you ever put into the deal. You now have a $0 investment that is generating a return, thus it can't compute a specific percentage and is infinite.

That being said, I don't believe your numbers will work in a real life setting. If the ARV is $80k, and that's what it appraises for, in order to get it refinanced at $69k, you'd be getting 86.25% of the ARV, which I've never seen anybody get that much before. You'd be more likely to get 70-80%, which would still help recoup most of your original investment.

I'll save you some time: Move on.  This deal won't even hit the 1% test before you remedy what will easily be five figures of issues.  Don't be swayed by their appraisal either.  How that number is determined can take many forms.  There's the possibility that the appraiser never even stepped foot in the house and is basing it more on location, amenities and recently sold comps in the area.

If you look at it in a vacuum and remove any emotion or risk tolerance, it should simplify the question to look at each avenue for it's financial efficacy.  Will any money you invest provide you with a greater than 7.5% annual return (surpassing the rate on your loan)?  If so, invest.  If not, pay down the loan.

When it comes to making a low offer, using the listing agent as your agent may prove to be more beneficial to you in some cases.  Let's say the property is listed at $50k and you are offering half, effectively cutting the listing agent's potential commission in half.  Having them represent you on the transaction now provides them with the opportunity to pick up the other half of the commission that normally would have went to an outside buyer's agent, and may be enough of an incentive to them to prioritize your needs over the seller's and lean harder on them for the sale.  Any dollar over half the asking price you offer should, in theory, be even better for them as they now stand to make more on the deal than they would have simply as the seller's agent.

Is this in a class A neighborhood or someplace more fowl?

That's wild if they don't consider the area in which you enter through the front door to be livable square footage.  You may also want to check and see as the whether this was initially a two-story and added the additional level and garage to the side and that square footage never got recorded, as opposed to your belief about the bottom level.  I'm sure you are likely correct in your assumption but you could always do some rough measurements of each level and go from there.  We have many tri-levels in our region (an entirely different state from yours) where the bottom level is halfway below grade and is included in the square feet.

You already know what to do, it just stings.  If you can't bear it, you've already mentioned some other possibilities that may be worth pursuing.  There are probably a couple other avenues you could explore through various forms of seller financing, but I don't think it's going to lead you to the end result you initially hoped for.

Not every flip is a home run, and not too many hit it out of the park on their first try.  You've hopefully gained a lot of knowledge from this project that will lead to greater returns in the future.  Do what you can to preserve your investment in this one and begin to position yourself for the next, applying what you've learned from this experience.

 Didn't the other properties suffer the same fate as the property in question?  Were they not all flooded at one point as well being nearby?  Does the location of this house specifically pose a threat to be flooded again where others don't?  If the one that sold for $243k flooded back in 2016 as well, and nothing was done to prevent it from happening again (like raising the house) then it should be safe to include within your comps.  From there, go with the advice everybody else in the thread has provided.

Also, don't get too married to wording in property descriptions such as "low maintenance" or "rarely vacant".  Same goes with the units rents.  Those figures may be proforma and not actual, while everybody's interpretation of "low maintenance" and "rarely vacant" can differ widely.  Generally the seller's interpretation will be a little more optimistic and you'll later find yourself very disappointed.

No way.  You legally couldn't meddle in the lease of a property someone else owns, but even if they hypothetically gave you the green light, and the properties don't close for any particular reason, you'll be out thousands and the seller gets a fresh start.  If you want them out now, include it in your contingencies and it will put it back on the seller.  They can then begin moving on from any month-to-month lessees or attempt cash for keys if the leases are many months from expiring.