All Forum Posts by: Josh Dillingham

@Aaron Currier I have two properties that I purchased in the last 2 years. last year I set up separate savings accounts for cap ex, maintenance/repairs and real estate savings.  I started the cap ex account with a couple thousand dollars and will continue to put $300 per month total for my two properties.  I put about $75 per month into my maintenance account and put all other money in my real estate savings account which I will use to reinvest in my next property, as well as covering vacancies, income tax, etc.  I like separating the money out because it makes it easy to ensure I am not overreaching and using all my savings for another deal only to have a large cap ex expense that I don't have the money for.  I just added the additional savings accounts to my regular bank account, it took about 15 minutes and there are no fees associated with the extra accounts. There are plenty of ways to keep track of your money but this is an easy way that I like.

based on those numbers it would pass my initial test. I would make a decision quick if I were you, if he puts it on the market at that price I would imagine you would have some competition. I would cover myself by making the offer contingent on property inspection.

as far as I know the standard is two years of employment in your current position or current industry. I'm sure there are some special cases I am not aware of. I would start contacting some lenders and see what they have to say. @Upen Patel would be able to give you more insight from a lenders perspective. other options would be hard money or private money lenders.

@Michael Plante my concern with this is that your tenant doesn't have any business insurance to do the work they will be doing, so if they get injured doing the job, or someone gets injured because the work they didn't wasn't up to par it falls back on you. If your tenant does happen to be a professional at doing the task at hand then I would work up a formal agreement to pay him for the work he does, but keep the rent the same.

I wanted to do a follow up post to say that I ending up asking the second appraiser if he would mind if I provided a few comps he said it wasn't necessary, hint taken.  I didn't provide any comps but I did try to paint a picture of the vast difference in the condition of the house when I bought it compared to where it is now.  I let him know it had been uninhabited and flooded with no heating and water shut off by the town along with a handful of code violations.  The second appraisal came in 50% higher than the first, which made me feel vindicated.  Of course the bank tried to play a game of split the difference between the first appraisal for $49,000 and the second appraisal of $74,000. I got them to settle on a price of $68,500 which will leave me with about $48,000 for a down payment on my next property.

I pay 2.88% for my property in Brattleboro (downtown district), Vermont. and 3% for my property in Hinsdale, NH

@Andrew Johnson I hear what you mean when you say " a lot of bad data"  I say same town because this is a small town with very few sales that could be considered comps.  in the original appraisal all of the comps were from 10-20 miles away from the property in adjoining towns, and some of the sales were two years old. So the alternative comps I selected used the same criteria as the original appraisal.  And I know the town assessed value is not a reliable number, but I thought it might be relevant in a case where the town assesses a property for $90K and it sells for $40K after being on the market for less than 7 days, but I guess I was wrong about that.

What is your opinion on providing a list of comps to the appraiser when you meet them at the property? I want to do everything I can to help the appraiser and get a fair valuation,but I also don't want to offend them and have them feel like I am trying to persuade them into giving a high valuation. I also plan on giving a list of all the improvements I have made. Is there anything else you all do to get the most out of an appraisal?Any appraisers out there that can let me know what they do and do not appreciate in terms of borrower provided information?

I am refinancing a rental property that I bought last year and fixed up. I got the appraisal back last week and it was 25% below what I feel is a conservative valuation of the poroperty. After providing evidence of why I felt some of the comps used were less than ideal (2 of the comps were sold by an estate and were only on the market for 1 week and sold for 40% of the town assessed value, when the average selling period in the area is 3-6 months) and providing 13 alternative comps in the same town, same acerage, same beds and baths, same sqft, same condition (maybe slightly better) that sold for twice as much as his appraised value, the appraiser felt my argument is invalid.

I've decided to order a new appraisal as I really don't feel this is a case of me being unrealistic about the vaule of the property, I think the appraiser took minimal time looking at comps and was offended by my questioning.

you'll have to follow whatever rental agreement they currently have in place with the former owner. for single room occupancy it's most likely month-to-month with a 30 day notice to vacate. i would serve them notice as soon as you take over ownership. I wouldn't offer them any compensation unless you have reason to believe they will cause you trouble that will cost you financially. most likely they'll go quietly with no problems at all.

I guess It comes down to how hard you want your money to be working for you. 7k-10k per year in savings is nice and you can keep collecting that by doing nothing more than you're doing (as long as you don't run into any repair expenses as it sounds like the property isn't making enough to save for that.  But your money could work a whole lot harder if you sold, then took that $112k and used it as 25% down payment to acquire 10 units cash flowing a total of $2500 per month after all expenses. That would be $30,000 a year from cash flow plus the yearly principal paydown.