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All Forum Posts by: Logan Turner

Logan Turner has started 42 posts and replied 271 times.

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Ian Walsh:

No comps to me usually means no demand when there are actives in the market but no solds.  I also don't like to lend in these areas because no comps = market values that are not known yet.  If I don't know the value, I won't be the first guy to speculate or attempt to set the market there.  I just pass.

 I'm ok if i purchase a little too high, as long as it makes sense as a buy and hold. My strategy is mostly to buy and hold distressed properties that can cash flow because rental market is still very strong. Job losses haven't really occurred, but the oil drop has scared people from buying. So i'd like to take a risk/ advantage of the fear and position myself well for the next boom. Could be 1 year could be 10, but as long as it cash flows, i don't mind tying some money up into it. 

Are you a hard money lender, a bank underwriter? Just curious, when you said you don't lend.

thanks for your time

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Joe Splitrock:

@Logan Turnerit sounds like property prices dropped like a rock due to the oil bust which, I expect to last for a while. If you are a buyer in this market, I would tell any seller to forget the comps. Oil will stay low and therefore the boom is not happening in the near future. Compare to Detroit when the auto industry tanked. I am sure sellers had trouble accepting it at first, but eventually houses sold on short sale or sat empty. If you are buying, use this situation to your advantage. Place lower offers and let them know the market is only going to get worse due to oil prices staying or going lower. Draw a comparison to what happened in Detroit to make your point more visual. I don't really believe your situation is as bad as Detroit was, but it illustrates what can happen. It creates fear of loss with the seller. If someone tells you a comp from one year ago is valid, just laugh in their face. The local economy drives real estate value in all cases.

 Great post. thank you. I love the fear of loss technique. Rent prices are still holding up pretty well (above 1%) but no one is buying, and i agree, i think it is 2-5 years out until things heat up again (based on multiple discussions with many locals in oil- but still a wild guess). Thats why I'm trying to position myself, for cash flow, but waiting out the next boom. I have a great income, so i can even take some losses, if a worst case scenario occurs. 

Thanks for the advice

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Chris Mason:

Clearly my opinion as someone in Real Estate in the Bay Area is needed here...

...haha, just kidding. Gotcha. I have zero professional experience that would make me know a damn thing about a market like this.

Super cool that someone from the (in)famous Williston popped in, though! Is Midland like the Williston Jr?

Yeah Odessa/Midland. Check out friday night lights! Same thing, this town has been a boom/bust town for 50 years. Last big bust in the 80's. They under built on purpose to prevent a future bust. This led to no where near enough houses for workers and rents skyrocketing. townhouses renting for 2500-3000 (120k purchase). Prob the only place besides D class areas where you can see 2% rule.

Btw, I'm born and raised in Sacramento, but came out here for a lucrative career in medicine. But most recently (2012-2013) i was in san jose and santa cruz. The market was crazy out there. Things cooling off now?

Post: Creative financing suggestions

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Jason Smith:

Logan Turner In my business I use a 3 option offer

1) divide up their asking price into equally pmts (I say this to the seller not so much seller financing)

2) seller financing w/ballon due in 15 years

3) All cash closing in 5 business days

**Now, pending on the motivation of the seller and their true bottom line price a cash deal might be good:

ARV: 130k (less say)
Repairs: 15k
As is value of: 115k
Quick 60% off: 69k MAO

If selling as a wholesale deal: subtract a modest 5k fee will be 64k net to seller

**other option the subject 2 w/ equity note due in 5-10 years or when every u sell

**and finally divide up the asking price: the local rents must be a higher than the mgt pmts so you can not only pay the new note but cashflow as well...all my deals like this I need at least 200 net...but maybe you might want to make less than that and that's great...but try hard to a least cashflow something

If want me to explain in much detail PM

Thanks Jason. PM sent about a couple of things.  

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Shane Knuchel:

We have an identical situation in North Dakota right now and I am also having trouble valuing SFRs and town homes. Town homes that used to rent for $3000 per month are now listed at $1400, and vacancy rates are creeping towards 50%. I've contacted a few sellers, and they are motivated but valuing a property when the rent has decreased 50% in one year is difficult. Plus many investors seem content to ride out the market and hope that prices increase. Something has to give at some point, but who knows when that will be.

 Oil towns cause crazy swings. I know a lot of owner occupied homes sitting on the market sitting as well, where the owners are stubborn to sell. It's been about a year now, and prices keep getting reduced, little by little, so something has to give soon.

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179

Thanks @Sarah Ziehr great advice. I am meeting with a few sellers and will be asking their price and determining motivation to sell. Ideally i would like to also have some comps to bring in to justify my reasoning, but going back too far is a disadvantage to me because it was a hot market. Now, that is has cooled, and may be cool for a while, its tough to determine values going forward.

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Jeff B.:

Assuming you're talking SFR?

Some duplexes too, but mostly SFR's.

Post: What to do when no Comps?

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179

Yes. SFR.

Post: Creative financing suggestions

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Originally posted by @Brian Gibbons:

@Logan Turner

how did you get 44,000 owed? We're kind of first mortgage is it, is it FHA, VA, conventional ?

Try getting 50% of market rent for payment on Equity payments 

Explain why you need 50% of rent collected to the seller

 With current first mortgage is in place I like doing subject to the existing financing purchases with the note no payments for five years 

 What is the payment on the 44,000 ?

 What is the sellers motivation to sell ?

Does he need the money today or can he take a note?

This business is about low all cash OR creditive deal with payments that can help you as a re investor feel comfortable about the risk

You could also look at Wrap around mortgages depending on the existing financing for an acquisition strategy

Hey Brian, thanks for the reply. 

I looked up the deed on the property. The house was bought in 1999 but a mortgage was taken (HELOC perhaps) out on the home in 2013 for 44k. So perhaps its around 42 k owed. Just guessing based on public record. But, not sure the type of loan it is. I have not negotiated with the seller yet, and was trying to get my ducks in a row before i did, so i am not thrown any curveballs.

Not sure yet motivation to sell, other than listing it to sell in a slow market. I will find out if motivated or just perusing, but very few homes are selling and tons are sitting on the market for months. 

Would the wrap around be: he still carries the mortgage of 44k, but we add to that (for example) a 60k mortgage that I'm going to pay? Basically I'm paying the 100k total mortgage but 44k is in his/her name and 60 k is in my name? Only draw back i see, is I am a 1099 employee (anesthesia business) but i have a credit score of 720-755 and a high income but not 2 years of tax returns, so no one wants to loan (except hard money)

And thanks Brian again for the tips and advice. Very much appreciated!

Post: Creative financing suggestions

Logan TurnerPosted
  • Rental Property Investor
  • Dallas, TX
  • Posts 283
  • Votes 179
Looking for some advice and fresh ideas to make this a deal: 3/2 1500 sq ft home. No comps available (stale market) Owner is willing to do seller financing. Owner owes 44k on mortgage. Value is roughly 120-150k. Would need 10-25k based on drive by and pictures. B- neighborhood What are some creative ways to make this a deal? I was thinking discussing with the seller: reasons for selling, urgency of needing to sell and determining their bottom dollar. But if the seller holds firm on asking price of 130k, what are some creative ways to structure owner financing that can be a win win? I could prob rent this place out for 1200-1400. So I would need monthly payment to be around 600-700 for it to be a deal.