All Forum Posts by: Eddie Egelston

 All of the estimates are rounded to the nearest $500.  :/

My dude, you're making this way more complicated than it is.

Gathering the data to input into these indices would take more time than finding great deals.

I won't poo-poo all of them, but for example index #2, list price to Tax Assessed Value, with all due respect who gives a crap? Why TF would you care what some random-*** assessor appraised the property for, and then compare that to the random-*** price it's listed for? There's zero value in that.

This line of thinking is for Zillow Offers or some gigantic company that has to deploy billions of dollars and gather data to improve going forward. You guys are Mom and Pop.

I am a Realtor in Illinois and I have represented HPoA in 2 purchases. I also sought them out to buy my personal residence, but I accepted another offer before receiving theirs. "Scam" is not a word I'd use to describe them, unless I was an uneducated tenant that didn't understand some very basic concepts of what the lease program was about. I think their website does a fine job of explaining the program and a lot of the important details. Here are the pros and cons of working with them, from the perspective of agents, tenants and sellers:

Pros:

Tenants get many more potential rentals to choose from. (In my market it gives them about 5-10x the selection.)

Agents representing a tenant can instead represent a buyer. (Commission difference on a $250k house might be $1000 vs $6000)

HPoA offers cash

Tenant gets certainty of a renewable lease and a professional management company, versus the unknown of a private landlord

Cons:

In my market, renting through HPoA means paying about 10% more than market rent. Could vary more or less

The 5% annual purchase price increase is too rich for all but the hottest markets. Planning to buy years down the road will be prohibitively expensive for almost all tenants

Standard rent increase of 3%, may be in line with the market but is not what most private landlords would do. Most tend to keep rents fairly flat to prevent vacancy

Process to buy and make-ready a property can take 3-6 weeks longer than a standard lease of a vacant home

Side notes:

I have observed HPoA list their properties for rent on MLS once tenants vacate. They start by listing for approx what the tenant was paying. This can be very out of whack with market values. They stubbornly stick to their guns for months and months before lowering the listed rent to something reasonable. In that time they have potentially lost tens of thousands of $$$ in revenue. Not sure if they are stupid and don't care, or if they need to do that to stop former tenants from coming back to rent for newer lower price.

Most potential tenants I talk to are very intrigued by the benefits, and usually the timing is the biggest reason they don't try to go forward with the program. (For example tenant needs a place in 30 days, the program can take 6 weeks.)

Real estate agent here; I'm not a developer. I can't imagine you would do better than selling each lot separately. You are selling a view and [perhaps] water rights. You're not selling a place to play football with your kids. The value is the proximity to water, not the land. If one guy with more money than sense wants to pay you for all 3 lots so he can have 2 acres, fine, good for him. The likely path to maximum value is 3 lots sold separately.

The IRS has some bad news for you... You have to pay taxes on flips.

1031 exchange does not apply. You might want to read some basic info on the topic before contacting a professional.

 Ahhhhhh that's interesting then. So if you don't close, you pay nothing it sounds like.

I personally think that's incorrect. You closing should be the reward for the agent. The flat fee should be his insurance against you "wasting" his time, and if anything it should be refunded at closing, not charged. That's my 2 cents.

I think we still need more context. What's the purchase price range?

@Account Closed, when in fact maybe the reverse should be true? Do they or can they get that detailed in their reporting?

@Account Closed Thanks for the reply. Yes, my hail storms are pretty tame compared to yours. I get it, in the long run you are basically the one paying for the roof through premiums and deductibles.

That's why I specifically mention flips. In that instance it's pretty much just the deductible. If you chose a higher premium, lower deductible, and then file a claim, you add a $10,000 roof to a house and then immediately sell the house. A brand new $10,000 roof may add $5,000 in resale value, if you are replacing a very old and worn roof. This sounds lucrative to me.

Again, not trying to commit fraud, I'm trying to work the system. For example, if you buy a $30,000 used car, and a month later you crash it, insurance picks up the full value of $30,000. However, if you crash that same car 10 years later when the car's market value is $5000 your insurance only pays you $5000.

Compare that to roofs. You install a $10,000 roof, then next week hail destroys it; insurance pays for another brand new $10,000 roof. Alternatively, you install a brand new $10,000 roof and then 20 years later a hail storm destroys it, insurance pays for a brand new $10,000 roof.

That's the inefficiency. Insurance companies don't depreciate the roofs like they do with cars.

Market value has nothing to do with rebuild value. You're comparing apples to cars.

Whenever a cloud passes overhead in my neighborhood, the "storm chasers" aka roofers start ringing the doorbell saying hail was in the area and they can likely get me approved for a new asphalt-shingle roof and siding. I personally think it's a crock. The house is 13 years old, with aluminium siding. LMFAO WTF kind of hail would we have to get to damage aluminium siding? Most of my neighbors, with houses of the same age have gotten roofs replaced. I call BS because my roof faces the same "hail storms" and is functioning just fine.

My question is, does anyone use this to their advantage on investment properties they own? Specifically, flips they own? I'd imagine if you bought a house, then quickly filed a insurance claim, the insurance company would want to see the dates of the last hail storm, and they would check to be sure you owned the house on or after that date. How often do these "destructive hail storms" pass through any given area every year?

I'm not advocating for, or insinuating fraud. I'm just wondering how, if ever, these types of claims can assist with flipping properties. Thoughts? Stories?