All Forum Posts by: David Flores

Hi BP World,

I am sure I am not the only one that runs into this problem. My whole niche is finding great deals, like most of us on this site. I am running into a problem though when properties are being appraised. They are usually always appraised near the purchase price, but this is not the true value and I think the appraiser and everyone involved knows that. For example, I recently bought a property that is bringing in 4k a month. The purchase price was 245k and it was only appraised for 250k. It was a quad plex in good condition with 11 bedrooms. The comps in the area for 5 bedroom DUPLEXs have been selling for 200-250k. One property most comparable to mine had 9 bedrooms and was a duplex that sold for 330k, just a couple blocks away. Its great I got such a good deal on the property but how can I get a TRUE appraisal so I am able to either take money out. In my opinion the home is worth near 400k. It seems like appraisers just go with the purchase price when doing their valuation as we all know, but is there anyway to get a true appraisal. Does anyone have experience with showing an appriaser why the value is wrong?

I was thinking I hire a private appraiser get my own appraisal done and then show it to the bank who is going to refi. Let me know if anyone has any tricks or tips for this, as like I said, I am sure I am not the only one that deals with this.

To build off what I said, its understood you can post a forum that can list these things. But a consolidated place where an investor can just browse deals, view specs, etc. That would be amazing!

I think a great improvement would be a place where you can post actual deals. Kind of the way you can go on the market place and view properties people are selling. That same exact setup but instead of homes for sale people can post deals. For example, if I recently found a great fixer upper but I do not have the means to actually do it I can post something that says the specs at a high level like "Partner Flip Deal" "Looking for Joint Venture" "50-50 Split" "Chatam NJ". Then someone can click on it and see the description, more pictures, details, etc. 

This is what a lot of members are looking for I think and can bring the site to a next level. 

Ask to set up a seller financing deal. This sounds like a perfect situation to do that. Even if you set up a seller financing deal at 10% which is a slam dunk for the seller (the ones I have closed on are usually at 5-6%. If you are unfamiliar with how to set it up DM me and I can help you through the steps. 

You can setup a situation that looks irresistible to the seller and perfect for you. For example, you could probably offer 15k above the price he/she was originally asking for and have an interest rate of 6%. I submit offers like this all the time and have a template to share with you if you need it. Not enough people realize how awesome seller financing is for both parties. Have to educate the seller. 

Investment Info:

Small multi-family (2-4 units) commercial investment investment in Morgantown.

Purchase price: $245,000
Cash invested: $29,500

Another investment in the books!

What made you interested in investing in this type of deal?

The yield on the property was very high and the numbers worked great. I am also able to value add on the property by getting utilities off to the tenants.

How did you find this deal and how did you negotiate it?

Found this deal through a fellow listing agent in the area. I was able to negotiate very well during the deal as a married couple was getting divorced.

How did you finance this deal?

Yes, 10% of the DP.

How did you add value to the deal?

I will be adding value by getting tenants on the utilities and I have a parking lot from my other investment deal that I will utilize for students to pay for parking there. I will be charging 50 dollars a month for 14 spots and will produce an additional 700 dollars per month.

What was the outcome?

Outcome was great! All parties are happy

Lessons learned? Challenges?

Ask questions during the negotiation process the more you find out the more you can work with.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

An agent and a lender.

Investment Info:

Small multi-family (2-4 units) commercial investment investment in Morgantown.

Purchase price: $245,000
Cash invested: $29,500

Another investment in the books! This one I am extremely proud of due to the negotiating skills involved. I was able to get the seller to seller finance 10% of the down payment, give me a 10k credit for some repairs, and repair some things on their own. The property is already fully occupied with about 4k dollars coming in through revenue and I will be cash flowing about 1,100 dollars a month right off the bat. Love keeping full ownership of properties and would rather get creative with financing than bring in partners and this one worked out perfectly!

What made you interested in investing in this type of deal?

The yield on the property was very high and the numbers worked great. I am also able to value add on the property by getting utilities off to the tenants.

How did you find this deal and how did you negotiate it?

Found this deal through a fellow listing agent in the area. I was able to negotiate very well during the deal as a married couple was getting divorced.

How did you finance this deal?

Yes, 10% of the DP.

How did you add value to the deal?

I will be adding value by getting tenants on the utilities and I have a parking lot from my other investment deal that I will utilize for students to pay for parking there. I will be charging 50 dollars a month for 14 spots and will produce an additional 700 dollars per month.

What was the outcome?

Outcome was great! All parties are happy

Lessons learned? Challenges?

Ask questions during the negotiation process the more you find out the more you can work with.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

An agent and a lender.

@Mark Sewell, believe it or not all of these workers are from the oil fields. It is 100% occupied, has been that way for 2 years now, and there is a waiting list. But I think I found my answer to all this. 

I think I am going to avoid the situation all together for now as the risk far outweighs the short term benefit I may experience. Sounds like a good time to get involved is when democrat policies take control. Will wait for that bust period. 

@Clifford Paul, if I could like your comment 10 times I would. Extremely helpful. I think I will probably stay clear of it and focus on my niche (rental properties). 

Was just really surprised by the cap rates and occupancy rates. Seemed extremely interesting but if its too good to be true, it probably is!

With your advice I will keep my eye out on when these things go bust, could probably scoop a park like this for pennies on the dollar and walk away a couple years later. 

Btw, sounds like a god damn movie out there lol. Crazy how different parts of the country work economically. 

@Austin Neal @Jim Cummings @Glen Mauldin @Joseph Gonzales

Awesome insight, thanks so much. So it seems like all of you know the area and business very well. I don't like saying "okay forget about it". That being said, how would you guys valuate an RV park based off of oil jobs in the Permian Basin? It sounds like maybe valuating it at a 50% occupancy would be a safe bet? Let me know what you think. Right now the listing price is valuating at near 100%. 

Another quick question, would there ever be a scenario where ALL jobs could wash up? Or would that be pretty impossible given the amount of oil in the Permian Basin. I mean just thinking about with common sense, oil is a resource we heavily rely on, so I would think no, but let me know your thoughts. 

Al your opinions would be very useful.

Hi BP World,

I came across an interesting deal that I wanted some advice on. Mainly for those involved in RV parks in Texas. The RV park is located in Permian Basin where there is currently a ton of activity. The RV park is listed at a decent price which would come with it a decent sized loan amount. The finances look great with a 100% occupancy since 2017. 

At first I thought this was a slam dunk gem. But, as I do more due diligence I have concerns about how long/sustainable the RV park will be. My questions are the following:

- Do oil worker jobs go through cycles or are they stable for 10+ years once a good site like the Permian Basin is found. 

- Could it be possible that 5 years down the road all jobs could be dried up because the market for oil just isn't doing well.

- Is anyone familiar with the Permian Basin area and has a rough idea of when/if jobs are sustainable for years to come. 

Obviously the main concern here is getting involved into a large loan, jobs drying out, and my park becoming a deserted island.