All Forum Posts by: Jamie DeRossett

You should always trust you instinicts and is alot easier to make a decision if you a a history of doing business with someone. My experience has found that it is great when partners have different areas of expertise and that is what makes my partnership great. My wife is experienced real estate broker that is a expert home stagger and I have a successful appraiser with my own business for over 20 years. Together we are a strong team ready for the next deal today. We have taken on partners in the past and they always put up 100% of the financing and we do everything else and they are in 50/50. I personally have not made much money partnering just by chance, but I have never lost on a house either, but my wife always makes alot of money the transactions so it is a no lose situation for us. 

It is always the best option to use cash as that eliminates the major expense (mortgage) with any property. A good friend of mine has made alot of money the last few years buying homes with cash and renting them out and collecting the rental income. Anytime he finds a good deal his dad gives him the money and they pay cash and he collects all the rent. It is a great method if you have the resources. It is a great deal and I really do not see anyway to fail using this method unless you are a absolute idiot. Anytime you can eliminate major expenses (mortgage, realtor fees, contractor costs) that is more money in your pocket and greatly increases your chances of sucess. 

Jerryll you are right I was wrong on this one. I ask my wife whose is very sucessfull real esate broker and owns her own real estate company after I made the post a couple weeks ago as we are constantly talking about real estate because I appraise 7 days week and see buys and sells 7 days a week and we flip and we have buy and holds and she said that it say in our mls contracts that they can be assigned. She also said it is based on state law and allowed in KY. Being a wise man is being able to admit you are wrong and learn from your mistakes and I was wrong on this one and I will get my facts together before I post in the future. You got me on this one. Have a good day! 

Good luck with wholesaling on market properties that is a great strategy and I am sure you will hear many success stories using that strategy. Thanks for the info Gary I will put that into my knowledge database. 

Giving an appraiser a call would be a total waste of time and money. The overwhelming majority of appraisers are good at appraising single family residences not multi-family properties. The experts on mult-family are commercial appraisers and they wont even talk to you. Having the properties on the same deed does not change the property type as long as they are not all on the same lot. If they have separate lots they would be residential and if they are all on the same lot they would be commercial because commercial is 5 units or more. It is common not to have comps for multi-family because they have slow turnover and there just are not as many duplexs as there are houses so the sales comparison approach is not very accurate unless you do have a good recent comp in the area and that is why the rent is very important. First you have to figure out what the grm (gross rent multiplier) is for each market area. The gross rent multiplier is how we figure the income approach on investment property. To determine the gross rent multiplier you divide the the gross rent ($550 per unit x 2 units=$1,100) by the sales price $150,000=136 that would be a good gross rent multiplier for when the property was purchased in 2004 and I am just showing you how to do the math. You would need to apply that same methodolgy to a recent duplex comp to get a usable multiplier that is applicable today. Once you learn what the multipliers for the neighborhoods you interested in are it will make the process easy and you will learn how to adjust the multiplier for different neighborhoods and what you will see in the better neighborhoods the multipliers are higher and the not so good neighborhoods it will usually be lower. This helps in many ways determing BRV and ARV. This is the way many investors quickly increase the value of multi-family properties is by rasing the rent because it makes a big difference in income approach value.

Almost all realtor purchase agreements have a clause that says they cannot be assigned. 

You are senior at the University of Kentucky studying Biosystems Engineering. Why are you even considering doing anything but your engineering degree. UK has one of the best engineering programs in the nation and  that is what you should be focusing all your energy on my friend. Take it from someone who has been doing the real estate investing thing for a long time the overwhelming majority of money you make in your lifetime will most always come from your job that you work and you should master that (especially being a senior getting ready to graduate) before you try something else. Stay focused on what is right in front of you and mastery your choosen trade before you branch out. That is my advice to you. 

Thank you very much I will look into them all and let you know what I think them. Thank you all and have a safe, blessed. and highly favoured day!

I have been investing in real estate for the about 20 years in the traditional sence. Buying, rehabing, and resaling. I am planning on trying something new and  starting to try and buy on the wholesale end and add that to my already sucessful model. Does anyone know of any really good wholesale books that are available to get me going in the right direction?

There is no concrete answer for the finishes questions. In my opinion those items modernize the dwelling and make a big difference; however, I done those things and have a appraiser come in and not think they are a big deal. Appraiser should look at the market and determine the difference between dwellings that have and have not been remodeled. Then you would subtract your cost from the ARV to if it is worth it or not, but in your case there may be extra motization of getting a better tenant at higher rent. Your best bet for a good appraisal after the improvements is to document the cost and provide it to the appraiser. Look at the neighrhood comps and see what remodeled homes are selling for and subract your cost and that gives you a pretty good indicator if it is worth it or not.