All Forum Posts by: Jeremy England

I'm thinking of bidding on a triplex at a county auction and wanted to get the input from people here on placing a value on the property.  

The building is in a c-d neighborhood, although the street it is on is better than the other blocks due to less traffic.  The market rental rate for the units (after repair) is 625/mo, this coming from another building across the street with equal sized, clean, painted, with newer cabinets   

The tax assessed value is 72000.

Unsure of repairs needed yet but if I guestimate 12/sf i'm looking at about 25000 (I'll verify this before bidding)

Comparable sales do not reflect much due to the number of sfh surrounding the property.  

If I price it according the cap rate method, I come up with 122000 

Bank's highest bid is 70000

I intend to BRRR this property, but not certain if I'm looking at a deal.

72000 purchase price (foreclosures in this area that sell to 3rd parties typically go for approxmately assessed value)

Repairs 25000

Buying cost: 500

evictions/cash for keys: 1500

Initial cash outlays: 99000

Annual revenue: 22500

Taxes: 1417

Insurance:  1500?

Vacancy: 1800

Maintenance: 1200

Cap/ex: 675

Management: 2025

Lawn maint: 480

Water/sewer: 1200

NOI: 12233/.10 = 122330

ROI: 12.3%

question is what method would the appraiser use to value the property.  

anything it look like I'm missing here?

You and me both, Im making offers, waiting on a reply from a seller now.  I too invested pre 2008 and thought it would last forever.  LOL.  And just like you, it's taken me until now to jump back in.   

Great story, where did you find the rental and flip? MLS or off market?

Were I you with only 25k.  Keep 20k for an emergency fund/cash reserve.  Invest 5k in marketing and start wholesaling.  Find a partner and bring him the deal, he brings the money.  Or sell a deal and make your 5k pool, 15k in one swoop.  

great responses, 

Anyone ever employ a vr?  Whats the arrangement like?  Do you pay them by the hour or per lead?  If no one calls, do you still pay them for their availability?  

Wow good looking project.  So can you tell us how you found the deal?  And did you pay cash for the house?

Congratulations

@Jonathan M.  Thanks for your response .  I do agree taking the call is the best method to get the business, but its not an option for me M-F 8-5.  

If anyone works full time and is unable to take calls from sellers during business hours, please chime in and let me know how you are handling this. 

@Michael Quarles  Thanks, I'll take the advice 

J. Scott's book on estimating rehab costs is pretty comprehensive.  Not sure about your market but he based it off Atlanta and that is similar in pricing to the market I am in.  

So I've read up on direct mail and wanted to know how the forum deals with seller phone calls.  Let them all go to voicemail and return messages?  I work a full time job where I can't just stop what I'm doing and speak with prospective sellers during business hours.  

I'm sure I'm not the first one to have this problem, so how are you all handling it?

Does your mailer direct the seller to a website instead of a phone call?  

Another question, since I'm in the wholesaling forum.  I'm getting alot of wholesalers sending me house leads and they are asking like 80-90pct of retail.  It discourages me from even looking at these houses because we are just too far apart on price starting out.  I feel its not worth my time to go check out the house and engage with the wholesaler because he would need to drop his price by 10's of thousands for it to be a deal.  To me a wholesaler shouldn't HAVE 10's of thousands in room to negotiate or else he's not really wholesaling is he, he is simply selling me a property that needs work at too high a price.  Anyways, what say you?  

Thanks

IDK what the formula is, but the "wholesalers" that have sent me leads are asking about 90 pct of retail. Needless to say I haven't bought any of them. Perhaps they are just asking high and expecting a lowball offer. But I think a good wholesaler would be straight up and say Y is my price, X is the ARV, X1 is your closing costs, X2 is your holding costs, X3 is your profit