All Forum Posts by: Hobart King

Andy, thanks - Not deterred at all just a small setback :). We are going to take a look at the appraisal when we get it and send over the other appraisal on the house next door. We may have screwed ourselves by buying a house 4 houses down for $45k (it was a good deal and needs to be updated, but I think it would probably sell for 120k if we did it well). Thanks for the advice!

Welp... just had a really bad appraisal. My buddy and I have been doing the BRRRR method and we just completed a house and currently have it rented for $1,100/month. It's in kind of a weird location as houses one street west sell for $300k+ and houses a few block to the east sell for very little. One of the houses on our street was purchased for $150k within the last two years. We are looking to refinance that property plus another property we own and we have a lender we like. We felt really good about getting a appraisal of $120,000 on this property given that my buddy re-did the property next door that is identical and got an appraisal of 120k. First appraisal came back at $50k which really left us scratching our heads. Second appraisal came back at $70k which again is much lower that I feel it should be (I think we could sell for $140k). We have not yet received the appraisal report, but I plan to review to see what was used at comps. Anyone have any ideas on how we can get a higher appraisal? Do we have the right to choose our own appraiser (we would choose the first guy that gave use the 120k appraisal on an identical house next door).

Also Anyone know any good lenders in Birmingham, AL (or elsewhere) that will lend at 80% LTV with no seasoning period for a smaller portfolio (2 houses worth ~165k)?

Recently bought a property for 45k (2/1 900 squat ft) that's in good shape and need to get an insurance policy on it. Our lowest quote was $100/mo which seems outrageous given I pay about that amount for my 3/2 1900 sq ft plus carriage house personal residence. Anyone got any ideas? It's held in an LLC I own with my business partner which is why I think the cost is so high.

@Lynnette E.

They’re accounted for roughly in the numbers.

I don’t have any financing costs either and taxes are low so there’s minimal holding costs.

@John Teachout

There’s a 20k foundation issue. Needs new HVAC, Electricity, Plumbing. Needs roof work.

I think it’s borderline tear down and rebuild. Perhaps I overestimated some items... if we come in under that number I’ll be ecstatic. I built in 10k of misc Expenses too. So real number closer to 130k

I am rehabbing a house in a nice area that I purchased for 15k and I have another 3-4K into it to strip it down to studs. Im fairly confident i can rehab the house for 145k which has me all in at 160k (the 3-4K of Demo is baked into the 145k number). ARV is conservatively 200k but I am pretty sure we can get 215k. That would put my profit less realtor fees/closing costs at 25-40k.

Here’s where things get interesting. There’s a vacant lot next door that is 10+ yeas behind on taxes. I tracked down the owner and she’ll sell me the land for $100 plus clearing the taxes/liens. I have no clue what a fair price for a vacant piece of land in this area should be as none have sold in the last 5 years. There’s one listed for sale for 55k that is not cleared (my lot is cleared) but it hasn’t sold. I think a homebuilder could build a 1900 sq ft 3/2 and sell it for 330k minimum at a cost of 130 per sq ft which would put their profit less realtor fees at conservatively 63k if the land was free. I was thinking 30k for the land and it seems to have generated some attention at that price.

Got an offer today for 90k for house plus land. Should i take it? Also of note I am very inexperienced and this is my first flip so may be wise to cash out on this deal and start looking for more. What say ye?

@Barry Pekin

Thanks all. Just got this thing under contract and construction has started on our flip next door :)

@Tamara Deering

She was extremely difficult to track down and didn’t even know she owned it. I recommend using skip genie (45/mo).

BP Community -

What say ye on this deal -

I am purchasing a house for a flip and noticed the vacant lot next door was 10 years behind on taxes. I contacted the owner and she agreed to sell me the lot for $100 if I took care of back taxes ($2,600) and closing costs ($1,500) so I would be in the property for $4,200 or so. I live close so going over there to mow the lawn would not be a problem. The ongoing taxes are minimal (like $300 per year). A 3/2 that’s 1500 sq ft would sell for over 300k in this area. I should

Mention there is not an abundance of lots in this area.

My exit strategies would be:

1. Wholesale it for 15k or so

2. Sit on it for 5 or so years while I get experience flipping and the market appreciates and eventually do a spec build.

3. If it’s a total dud and neither of the above are viable, then donate it to a church and write off the value against my income.

Option 1 above is the best but the difficult part is that virtually no raw land has sold in this neighborhood in the last 5 years so I have no idea what someone may be willing to pay for a lot like this.

Has anyone successfully wholesaled a piece of land like this?

@Kai Van Leuven Thanks for the perspective! I certainly do not want to be in a 3 year rehab ;). This house is very small though 1k sq ft so even with all the work that needs to be done I can't see it lasting more than 6 months. Awesome advice - thank you! BTW- I have taken out probably 10 chimneys in my day. Super easy. 1. Grab a framing hammer 2. Start at the top and lightly tap the bricks the mortar is not as strong as you would think. 3. Throw them outside to the ground below 4. When you get inside, grab three sheets of OSB. One for the ground and then make a backstop against the closest walls. 5. Throw them down against the OSB. Have someone help you and don’t hit them Good luck! @Bob Anthes Wow - sounds really similar! Plaster is no joke. How did you add a 3rd Bedroom and full bath? Did you expand the footprint of the house or convert an existing room? The weird thing about this house is there is WAY too much space devoted to the living room and dining room and not nearly enough to bathrooms. If I could accurately estimate how much it would cost and it made sense, I would probably move a few walls to make the living room smaller and put a master bed bath where the kitchen and part of the living room were, but I think that would be crazy expensive, but maybe not. This house definitely has the square footage to be a charming 3/2 if some of the living space could be converted to master bed/bath. @Brandon Ramsay Yea that's what I'm thinking. The plaster has gotta go!