All Forum Posts by: David S.

Quote from @H. Jack Miller:

There are a ton of variable here. But lets throw something out just to get this started and you can adjust the numbers.

Lets assume you have a 40% expanse load that would leave 60% or an NOI of 71k, lets assume a 7.5% cap rate, that would put the value at 944k.

You can change the math as you see fit, a lender maybe look at the seasoning of the project and only use your basis, this will depend on the lender and how long you have the project for before you refinance it. 

Sounds like an exciting project. Good luck with it

Thank you for the feedback. I assume the 40 percent is operating expense (management fees, vacancy, trash pick up, ect). I was thinking that my operating expenses would be considered closer to 15 percent. Is this unreasonable to expect? I need the project to appraise around 1.2 million. 

Also what is a cost basis real estate appraisal? Is that when they use market comps instead of income based? Because of the lack of seasoning of the property and leases is it unlikely they give me an income only basis appraisal? Thanks. 

Hello.

I’m planning to spend $400k in cost to turn a building I purchased into a nice conforming 6 unit apartment complex, with standard looking layouts and individual water meters, sprinkler system,  ect. I project they will rent for $1650 each to nurses and researchers at a nearby university.

i will need to cash out refinance it within a month of its completion.

If I have it rented out fully for $9900 a month ($118800 a year), what’s (1) a reasonable appraisal value I can expect for a cash out refi? (2)  Would appraisal valuation be entirely based on income? (3) If so what kind of cap rate can I expect for this type of building to be used for the appraisal valuation ? Thank you. 

Quote from @Patrick Britton:

if it's zoned for 4 units, the appraiser will not make it 7 units.  Period.  Doing so would result in that appraiser losing their license and source of income.  

Are you familiar with the non confirming structure appraisal or the rebuilt letter?

Quote from @Scott Mac:

It's either 7 units or 4 units, the appraiser is not going to just churn up some particular number of units from thin air.

1 unit = 1 apartment = 1 front door = ie A1, or B3, or 2, or C, etc...

Hello.

In order for an apartment I purchased to appraise for enough money to pay back my loan, I need the appraisal to come back for a 7 unit using the income I make off the property as a basis of appraisal. 


It’s zoned as a 4 unit, which makes it a residential property and subject to appraisal using comps (not income as you would with a commercial property).


I’ve heard I need to be appraised as a “non confirming” 7 unit, and I’ll need something from the city called a “rebuild letter”. Do I need this to get the max appraisal, or is it unnecessary? Is this hard to acquire? Any advice? Thanks.

Originally posted by @Jasmine H.:

@David Swanke I was looking at sales and pending sales in Remington before I got to this post.  The one you are buying looks lovely.  We were basically driving all day yesterday and today around Remington, Charles village and around the three universities getting to know the areas.  We are considering buying one in Remington and thought I should compare to the pending sales in the area and came across yours and another (23 w 27th) that I really liked.  

We have a house on n broadway that we are improving and trying to get tenants for. We are ready for another and are possible thinking to live in for a couple years and maybe rent out in the future. We are considering college area and also looking in VA particularly near James Madison univ. (Harrisonburg) and UVA (Blacksburg). Hubby likes VA and i prefer Baltimore so i was researching to compare the two and cames across your post. We were supposed to go see the ones near JMU tomorrow but circumstances prevented the showing of those properties. Funny how things work (usually trying to be aware of the signs), anyways I prefer Baltimore more than the others.

Hey I own a house on N. Broadway now that I rent out, on the 900th block. Which block is yours on? 

Originally posted by @Rondi W.:

Great questions. How do I determine contribution limits? I ran the numbers, guessing on rehab costs, and it didn't satisfy what I wanted. I know there are people who rehab these buildings and I don't know how they do it. Lot to learn. Thank you for your response!

 They don’t rehab these buildings because it’s not economically variable. That’s why you have abandon homes and building/blight 

Hmm try refinancing the houses through an Llc with a private lender. That’s your path of least resistance. 

Hello. 

Let’s say I took a mortgage deferment for 10 months because of COVID on my home loan. Deferment freezes interest. 

The total I owe on the home prior to the covid deferment is 100k. My payments are 1k a month. I suspend payments for 10 months. Would the total amount owed on the mortgage after forbearance be original balance plus the missed 10 payments (100k+ 10k = 110k) or would the new balance after forbearance be closer to 100k? Thanks 

That’s way too much blood sweat and tears...I just do brrrr, pay cash or a short term high interet loan, pay others to do the rehab, rent and refi. I don’t even understand what all this toil is or investing your own money but best of luck.