All Forum Posts by: Jennifer Schelkopf

Originally posted by @Ryan Blackstone:

Awesome data. No surprises; however, I will say Cave Springs would be a great place to build and invest for multi-family. or affordable investment grad SFH's. There isn't much out there, but the demand is high.

A month ago I used Rentometer to pull average rents for 3 bd, 1.5+ bath in various places around NWA. The numbers showed that Cave Springs demanded higher rent than even Bentonville. Unfortunately, the sample size for Cave Springs was very small. The report showed 11 rentals there, compared to 200+ in other cities.

Here's what the data showed:

Here's the raw data:

Area	25% Percentile	Median	75% Percentile
Bentonville	1142	1300	1578
Springdale	1034	1250	1505
Rogers	1101	1299	1544
Lowell	1214	1350	1682
Cave Springs	1800	2150	3648
Fayetteville	1116	1350	1584

I've browsed through some of the rentals in the Cave Springs data, and many are very large executive homes. I'm guessing that executives associated with the large employers in the area, along with their vendors, are renting these homes.

@Ryan Blackstone, you mentioned that Cave Springs would be good for MFH or affordable SFH. That makes me think this Rentometer data is not accurate, since it shows such high rents for Cave Springs. Given the low sample size that wouldn't be surprising. What do you think is driving demand in Cave Springs, and what is the typical renter profile there?

Are you wondering which areas of Northwest Arkansas you should invest in? Me too!

To help answer this question, I wanted to know the areas where other investors are buying. I thought others might appreciate seeing what I found.

I looked at non-owner occupied SFH sales data over the past 3 months and found:

* Fayetteville had the most sales, but 72730 (Farmington area) had significantly less sales than other zip codes in Fayetteville

* Springdale was the second most popular, followed by Rogers, Bentonville, and Bella Vista

* 72764, the Springdale area east of W. End St (which includes part of Beaver Lake), had significantly more sales than 72762 (west of W. End St)

* The 72756 zip code (northern Rogers, including Downtown) had significantly more sales than 72758 (southern Rogers, including the areas around Mercy and Pinnacle Hills Promenade)

Raw data:

ZIP Code	County	Population	City	SFH Sales
72712	Benton	40,933	Bentonville	73
72756	Benton	38,455	Rogers	45
72701	Washington	39,782	Fayetteville	37
72703	Washington	28,261	Fayetteville	35
72758	Benton	33,487	Rogers	35
72762	Washington	35,342	Springdale	33
72715	Benton	15,051	Bella Vista	32
72704	Washington	21,336	Fayetteville	31
72714	Benton	11,880	Bella Vista	29
72764	Washington	50,230	Springdale	27
72764	Washington	50,230	Springdale	27
72745	Benton	11,376	Lowell	12
72719	Benton	8,975	Centerton	11
72730	Washington	7,585	Fayetteville	9
72718	Benton	1,465	Cave Springs	8

Pretty graphs:

I am not a real estate agent, and I don't have access to MLS. I used ListSource to pull this data, as recommended in the book "Finding and Funding Great Deals" by Anson Young.

For those of you who are familiar with Northwest Arkansas, was there anything that surprised you about this?

Does anyone have a recommendation for a property management team in Texarkana?

Does anyone have a recommendation for a property management team in Texarkana?

Originally posted by @Ryan Blackstone:

I am in Northwest Arkansas and we typically see or follow these rules. Mind you, each appraisal is different. 

1. Location- Needs to be closer than 3-5 miles out. (if you can stay in the same Neighborhood, then great. 

2. Time- FHA I think does 90 day. We (my team of real estate agent and I) us 365 days out.

3. Age of house: Here are our cut offs. Age: my different cut offs are 1978, 1999, 2007, 2018

4. Sqft: typically good to be no more than 20% difference.

5. Condition- I categorize 1-5 

They will give $$$ valuations if they are missing something. For example, if you are missing a garage stall, they will deduct $5,000 to make it similar. They typically wont go more than 5% above appraised value unless they have a great explanation. However, again the real price is what a buyer is willing to pay and what a seller is willing to sell. And each appraiser has their own way and is way more subjective than I would like. Valuing a property is hybrid of Art form and Science. We go by these rules of thumb, but aren't held to them. We try no less than 3 comps and no more than 5.  

Thanks, Ryan. Love the details! Do you find that appraisers are using a per square foot price at all?
 

Originally posted by @Hadar Orkibi:

@Jennifer Schelkopf i take it that you are referring to SFR?

Typically its a combination of sqf and Comparable sales.

With commercial is more of an income approach. 

Yes, I was referring to SFR. Thanks :)

Originally posted by @John Gardner:

Jennifer, 

It rents for 850. and is in Lakeside School District.  When I first got it 7 years ago I was getting 700.  (it was a complete gut job).  Like I said earlier is that when my last tenant of 5 years moved out I put new flooring & worked on the kitchen.  Before completion I got a call from my very first renter and he was moving back in town.  He is now living in there.  

Are you active in the Hot Springs area?

Yes. I have two SFH and a triplex on Lake Hamilton. Most units are 2 BD/2A and rent for $600 to $750 depending on the square footage.

You mentioned in your original post that you have invested 8K in the deal. Does that include all renovations? Do you do the work yourself? I wish my renovation costs were that low 😀

Originally posted by @Lorne Shive:

Most AR appraisers are going to give value per foot.. its what drives the new construction markets here and continues so in the remodel and sale markets.  Most of your southern region appraisers use square foot pricing. Hope this helps.

It's very helpful. I've been a buy-and-hold investor for 5 years but will do my first BRRRR this year. I wanted to double-check that using a value per foot for estimating ARV was reasonable. Thank you!

I'm reading David Greene's BRRRR book, and he notes:

First off, it’s important to recognize that appraisers in different areas use different formulas to determine the values of single-family homes. They are all still comparing them to other single-family houses, but they give weight differently depending on certain aspects of a home. For example, a California-based appraiser is much more likely to give more weight to the proximity and condition of a home than to the square feet of the home. In other areas, like the South, appraisers are more likely to use the price per square foot of a home than the condition it’s in. Understanding

Greene, David M. Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple (p. 60). BiggerPockets Publishing. Kindle Edition.

What is the biggest component to appraisals in Arkansas? Have you found that appraisers start with the price per square foot and adjust from there, as Mr. Greene suggests? Does it vary for different areas, such as Little Rock, Hot Springs, or Northwest Arkansas?

I'm reading David Greene's BRRRR book, and he notes:

First off, it’s important to recognize that appraisers in different areas use different formulas to determine the values of single-family homes. They are all still comparing them to other single-family houses, but they give weight differently depending on certain aspects of a home. For example, a California-based appraiser is much more likely to give more weight to the proximity and condition of a home than to the square feet of the home. In other areas, like the South, appraisers are more likely to use the price per square foot of a home than the condition it’s in. Understanding

Greene, David M. Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple (p. 60). BiggerPockets Publishing. Kindle Edition.

What is the biggest component to appraisals in Texarkana? Have you found that appraisers start with the price per square foot and adjust from there, as Mr. Greene suggests?