All Forum Posts by: Jonathan Sanchez

So I just heard back from real estate agent. He did a grid of a specific area. There was not much turn over in that area; So, it's hard to determine comps for that area. 

@Bryan Noth, I reached out to my agent to run some comps for me. 

If you have any additional suggestions that would be great!

Hi everyone,

There is a property that I plan on pursuing. I'm trying to determine what the after repair value will be. I've been looking at recently sold properties in the area and they are very favorable. However, I don't want to overestimate and set myself up for failure. The range of purchase prices is very wide. I have experienced having one of my properties being valued below my expectations.

I want to be wiser and more conservative. And, I'm unsure how far away other properties can be to be considered comps.

Here is the info:

Property: SFH, 1373 sq ft, 4 bedroom 1.5 bath.

I've thought about finishing a portion of the basement to add more square footage. Therefore potentially adding 400 sq ft.

Here are the sold prices for the recently sold. These are sorted from closest to farthest away:

3 bed / 2 ba, 1600 sq ft - $232k

3 bed / 2 ba, 1538 sq ft - $250k 

3 bed / 2 ba, 1473 sq ft - $185k

3 bed / 2 ba, 2000 sq ft - $160k

4 bed/ 2 ba, 1596 sq ft - $196k

4 bed/ 2 ba, 1690 sq ft - $190k

Thanks! PM if you want more details.

I see a property in my local market that I can add value to by adding an additional bedroom to the property. However, when I looked at the recently sold comps in the area the purchase price varies on extreme levels.

For example, I looked at the recently sold properties in my potential area. Just a few blocks to the west a house with the same number of bedrooms sold for $155k with lesser square footage. However, a  few blocks south a few houses sound for $180k to $200k with even less square footage. It's really hard to anticipate what the appraiser would evaluate the property at which such huge margins. 

I tend to weight my estimated appraiser to the lower side to be conservative with my numbers. However, the range seems too wide to really be accurate.

If there is an appraiser who is willing to help me dig through this, please feel to send me a private message and I can give you more details. Otherwise, feel free to share your recommendations with the group. Thanks!

@Steve Morris well said!

@Jonathan R McLaughlin I agree having a great relationship with a bank is key! We are fortunate to work with a local banker; plus she is part of the board. She says they don't invest in houses, they invest in people. Having a good relationship will pay dividends in the future.

@Kimberly Carver I can agree with you. Although my wife and I saved money from our pay checks and contributed to our company's 401k, we weren't necessarily efficient. It wasn't until we read the "infamous book" that changed the way we understood money.

I wanted to survey my fellow investors. Looking back at your early deals, what would you say are common mistakes new investors make?

We recently acquired a new property. The house is currently listed as a 3 bedroom 2 bath where the second bathroom is in an unfinished basement. The bathroom in the basement is poorly configured. For example, the ceiling is low, the vent pipe is next to the toilet, and the entrance is not on the same axis to allow a door to be installed (it's hard to describe). Our plan is to redo the bathroom and convert it into a half-bath. Basically, we plan to turn the toilet toward a more functional direction. This will allow us to drywall up the vent pipe. We also plan to remove the standing shower stall to allow for a better entrance. This would allow us to save on rehab costs because we would avoid any additional plumbing expenses to relocate the shower stall.

One of my concerns was how would a now half-bath in the basement affect our "post-rehab" appraisal. Would we get a lower appraisal because the bathroom is no longer a full-bath? Or would our appraisal potentially go up because it is more functional now? A friend of mine suggested not to put too much effort into the basement. He said that the return we would get for any rehab done in the basement would be $0.25 to each $1.00.

I was curious if anyone had any opinions on this. Would others agree with my friend's assessment?

Thanks!

What your thoughts on still securing a line of HELOC but for cash reserves? We currently have enough personal savings to act as cash reserves as well but wanted to know if it's still worth getting a line of credit. Having a Heloc can be a very convenient way of accessing money. However, if I already have the cash reserves is the closing costs associated with securing a line of credit worth it?

Right now I feel like securing a Heloc for "just in case" is acceptable. We could use the cash flow to reimburse the Heloc.