All Forum Posts by: Chris Vail

@Benjamin Molina Sacramento is getting pretty hot right now especially with the arena nearing completion, and the close vicinity to the Bay.  There is a lot of money that has been flowing from the Bay to here making some of the transactions seem less than ideal.  Most important thing to remember is stick to what makes sense to you.  Loan values on conventional loans are based off the appraised value at the time of purchase.  Meaning if it appraises at 575k then a conventional loan will use that as the value it bases the loan off any sale price higher than that would require the buyer to bring cash to the table on top of what ever percentage is required based on the loan type.  In your example an additional 83k in cash on top of the down payment.

@Derek Daun, @Matt Inouye I just ran into this when we refinanced our current primary in anticipation of turning it into our next rental once we finish the rehab on our future home.  Our current home was a model home that we purchased from a builder that went bankrupt in 2009, naturally we got a decent deal because of this (in hindsight we probably could have gotten a better deal but we were very pleased at the time with our purchase). Fast forward to 2016 where the base homes around us (no upgrades, builder basics) are selling for some where between 285k - 295k.  When we got our appraisal I figured on the conservative side we would get 300k - 305k and the high side somewhere in the 315k - 320k.  Our appraisal came back at 295k and this wasn't the first time that an appraisal came back lower than I anticipated so this time I challenged the appraisal and requested an explanation on why all of the upgrades we have in our home are essentially worthless from an appraisers point of view.  The reason I was given was they do not have a like for like comp to compare it against meaning that since no one has purchased a house with a lot of upgrades throughout the house there is no bases for what they are worth.  I further asked how the new homes they are selling less than .25 miles away are able to sell above base price with upgrades and appraise at the value they are listing with the upgrades?  Answer I got was since someone is willing to pay the price and the builder backs up the cost they appraise the house at that price.  Long story short until we sell our house there won't be a comp to compare it against for a refi.

@Kris Ven

Pointers for you below (I am not a pro)

1. Read and do research
2. Ask specific questions
3. Be active on the forums
4. Attend some REIA's in the area
5. Listen to all of the podcasts
6. Don't play on the freeways

@Debby Chen you do not need a buyers list to start in Sacramento. If you can find properties and get them under contract at 70% ARV all in (including rehab costs), that are in A/B neighborhoods, and your numbers pencil out. I am almost certain that if you place said property on the marketplace here on BP you will get a ton of folks responding looking to buy. After a couple of properties you will have a list of folks that you can farm out properties to directly or you can continue to use the market place. Sacramento is extremely competitive right now so if you can find a deal you will have no problem unloading it. If you can't unload it or you are having trouble finding a buyer... You do not have a deal.

@Adam Sharp going to be devil's advocate here. If you have 25k you are looking at ~ a 100k loan not including closing costs since most banks will be looking at a Loan To Value (LTV) of 75% meaning that you will need to have at least 25% equity in the property. Not saying it is impossible but highly unlikely that you are going to find a multi family in Sacramento for 100K with no work to be done. It would have to be no work since you will have no money left over after your down payment, not mention the closing costs of the loan, carrying costs until it is rented, and reserves in case an oh $hit moment happens. It can be done but you are probably going to want to save some more before you start. Unless you are planning to move to sacramento and house hack in which case you would be able to qualify for primary residence home loans and can get down into the 5% equity down payment category based on your credit.

No Idea but am Curious of the outcome.  When I bought my rental I removed the Digger Pine in the back yard for this very reason, I didn't want to, however with the way the tree had grown and the amount of neglect it had seen the tree guys recommended removing the tree as it was not an if but when the tree would fall.  Half the tree was facing my rental and half the tree was facing a neighbor and I did not want to take that call at some point in the future.

Keep us posted on the outcome @Derek Daun.

Ahh thank you for the response @Brennen Cook.  When we get our next project I will have to thread the process as well.  Good luck and keep us posted on the progression.

@Brennen CookI forgot to ask how did you locate the deal in the first place?  My wife and I are looking for a similar project but for our next personal residence over in the Fair Oaks / Folsom area.  

@Brennen CookI am looking forward to see how this project unfolds.  What software are you using for your drawings?

Thanks @Al Williamsonfor putting the event together.  I had a good time even with the "protesters".  I also want to say a thank you to the other presenters Brian Burke and @Ben Leybovich for taking time out of their schedules to come down and speak.  Thank you Embert for handling the transitions, Daniel Hernandez for helping organize the event, @J. Martinfor helping facilitate the panel discussion, and thank you for everyone the showed up to make the event a success.  Thank you @Elizabeth Colegrovefor the side conversation during one of the intermissions and I hope you find success on the property hunt up in Washington (sooner rather than later).  I enjoyed talking with you @Jason Flynnand hope the future remodel of your Mid town house continues as planed.  Thank you to all the folks at the dinner after the event for the great conversation and personal stories of your own real estate adventures.  I am looking forward to building on the relationships that started yesterday and seeing what the future holds.