All Forum Posts by: Daniel Watrous

@Gaston Barua Sales Price per Square Foot (SP/SQFT) is a very poor metric in most areas*. It's better to make adjustments to the comparable home sales that make them more similar to the subject property. For example, if you are looking at a 3 bed 1.5 bath, but the comps have 3 beds and 2 full baths you'll have to reduce their selling price by the difference in value of a 1/2 versus full bath.

In my area you can access foreclosure records from the courthouse. Every file has an appraisal included, so if you can find a couple foreclosures in the area your considering you can get the appraisals then use the adjustment factors used by the appraisers.

*SP/SQFT isn't informative because there can be huge variations in condition, finishing, room count and features that affect value and usability. Also, differences in sqft really only matter when the differences are significant (1000 sqft vs. 2000 sqft, etc.)

To me your question boils down to the following: you need to save $150k, but should you "save" it by paying down principle in your current mortgage or should you save it in other investments? It all depends on your mortgage interest rate. Unless your interest rate is very high on your mortgage, 5-10 years is a long enough period to enjoy gains in a mutual fund by weathering small swings. Or check out RealtyShares.com they have been a BP advertising sponsor for a while. You can invest in real estate deals with as little as $5,000.

Your target is functional obsolescence , a property might need an update to make it usable again. For example, if you can convert a 1/2 bath to a full bath or recover a lost bedroom or storage area. 

You won't get a much bang for your buck on things like updating a kitchen or roof, because those are necessities. Every home has to have one, and while you can make your home more desirable (will sell more quickly) a new kitchen won't make it worth more.

Lender discretion; whenever there is a transfer or sale the due on sale clause is 'armed' whether or not that trigger is pulled is entirely up to the bank. 

You can request a written response, but technically no response is a type of rejection. You can try submitting your offer again, but get clarification because if your offer was incomplete (missing required addendum or proof of funds) it can't be submitted.

How do you feel about debt? That sounds like a great strategy as long as you have good numbers and are comfortable being that leveraged. Is this a flip or buy and hold? If you have a conservative rent target and include things like capital expenditures, taxes, etc. you should be in great shape.

Warning, being this highly leveraged means that it will be more difficult to refinance unless you are buying at a steep discount.

Tip, obviously you can record the private loan as a second mortgage to make the private money lender more comfortable.

Those aren't comps if they are new construction and double the sqft. Look further out. Generally we you want to stay close (within a couple miles) and within a year, but markets are different. You can use the new construction as 'comps' but they are so different you'll have to jump through hoops to make the right adjustments.

For example if you have two very similar 3 bed 2 bath homes on similar lots built in a similar time period, but one is a bit bigger you can generally make a linear adjustment based on the sqft. But if you're comparing a fixer two distinct layouts with very distinct features it's very hard to make a meaningful comparison.

In my area I can access foreclosure records which include appraisals, and then use the appraisers adjustments to help me make comparisons. 

It doesn't make much difference, at closing you pay some pre-paids (insurance/escrows) to yourself/the bank and credits to the seller (pre-paid taxes, fuel oil,etc.). You don't have a mortgage payment until you've 'borrowed the money' for at least a month. 

Tip: In most jurisdictions with the permission of the owner you can start advertising the listing to renters. 

I am an investor friendly agent working on generating enough capital to invest myself.

in New London a 2 Bed 1 Bath Unit has a median rent of $900 [$1.04-1.13/sqft] and takes about 30 days to rent. What property were you looking at specifically?