All Forum Posts by: Jon Deavers

Hi @Nerissa Marbury

I would second the recommendation for @Sean Tluchak and/or his associate Katie Taylor.

He's closed the majority of my transactions and has been a great resource for my clients. Very knowledgeable, responsive, and they're just generally great people. You can find his website by googling Tluchak Law.

@John Kaspar

Hi John. Thank you for your service! We moved to Richmond from the Piedmont region of Virginia about six years ago and we love it here. If you make it down sometime and would like someone to show you around feel free to reach out. Best of luck with the move!

2000 sqft lots sounds tiny but if you have a house on a 4400 sqft lot and live in it or rent it out for a while and you could eventually tear down the house and subdivide and build two more that both sell for more than you paid for that one it could be a great investment. 

Hey @Jerry Condra

Multi's that are 2-4 units are going to have higher potential capital expenditure costs (there are 2-4 X the kitchens, baths, appliances, etc than a single family) but will typically have higher cash on cash returns than singles (in most markets). They also tend to have more available rental history since they are all investment properties even if they have one unit owner-occupied so you can feel safer in your revenue projections than a single family. 

In my opinion it comes down to how much you have in reserve for capex costs over time and what your inspections of the property turn up on projected life expectancy of the components. On top of that you need to understand the rental demand in the area for the property you're looking at. Multi's can mitigate some vacancy concerns because it's unlikely all units will be vacant at the same time. The flip side of that is liquidity. In most markets, it's a heck of a lot easier to sell a single family than a multi. 

That last bit is where my advice would come in: if you're brand new and not 100% sure on all the moving pieces, focus on finding a single family that you can be reasonably sure of all the numbers on and go that route. If you have done some homework on vacancy rates and are comfortable with those numbers (maybe even double the estimated vacancy costs to be safe, again easier on a single than a multi) then I feel that is a smaller risk being able to list and sell that single in a short time frame instead of finding out your multi is a dud and it takes forever to sell down the road. You can always (at least for now) 1031 exchange into a multi down the road once you have more experience and comfort with the process. Or you could seller finance it to a first time homebuyer or several other exit strategies that aren't as readily available with multis. Better, in my opinion, to shoot a little lower on returns in return for mitigating risk on your first deal. After you have one and have been managing it for a while and are ready to pick up something else then multis definitely are the way to go for long term holds with higher returns when the right deal comes across your desk.

Best of luck!

@Adam Allard

I'm not an accountant so hopefully an accountant can back me up on this...

My understanding is that capex is not in your income statement so it can't be an operational expense. This is because capital expenditures can be depreciated over time and that depreciation is included in the income statement over that time (so if you spend $90 or your roof and depreciate it over 3 years, you take the $30 per year into account instead of the entire $90 in the year it was incurred). This is favorable because of the tax benefits surrounding the ability to depreciate the capex reduces your tax liability over time at a more favorable rate than if you took that expense all at one time. 

@Amanda A.

Do you know which HOC office for Sage covers the area where you have the property under contract? I'm guessing it's either Denver or Philadelphia if it's in Michigan. The only option there is to keep calling and asking for managers up the chain. I have not had good experiences with Sage either. The listing agent should have contact info for their asset manager assigned to the case and potentially the manager of that asset manager. Calling into HUD directly is probably not a bad idea but unlikely to get much help there in a timely manner before Sage terminates the transaction.

Next idea would be consult with your attorney. Is the closing being handled by an attorney or title company? If your attorney can review your communication efforts and document the seller side issues they may have a solution that would at least legally buy you some time. The problem you may run into is Sage unilaterally terminating the transaction due to buyer failure without ever communicating back to you.

Never thought I would say this, but I miss Ofori & Associates. They were certainly sticklers for paperwork and process but were a lot more responsive and efficient than any of my Sage experiences have been.

I feel your pain. Have been there a couple of times myself. Best of luck!

Hi @Karl B.

I'm going to echo @Patsy Waldron here and recommend Richmond VA. https://www.outsideonline.com/1929066/best-river-t...

There's a link to an article Outside magazine wrote a few years ago about Richmond and it's only getting better. The Richmond Sportsbackers organization runs a large marathon and 10k races each year that draw folks from all over the region and beyond. The food, art, music, craft beverage scenes are all flourishing as well. Come out and visit some time!

Hi @Jonah Godsey

Rentometer.com is a good tool for running rental comps. You want to cross-reference the comparable addresses with Google street views to make sure the houses are similar that have comps. Rentals are in high demand here lately so finding plenty of applicants to rent shouldn't be a problem. I would spend a lot of time on BP researching tenant screening processes and make sure you have a good, thorough tenant screening process in place before advertising it. Also make sure you have a good solid lease that covers variables many off the shelf leases don't always consider (who mows the grass, who is responsible for changing HVAC filters, lightbulbs, etc) clear outlines of late payment policy etc. @Sean Tluchak's office can help you by reviewing/drafting a lease and other legal matters. They're great folks over there.

Fortunately BP is a near unlimited source of great advice for sharpening those skills. The good news is you have a head start with a house in hand. Best of luck!

Hi @Account Closed

The best thing to do is reach out to the city's permitting office (804- 646-1343) and give them the address. They will be able to confirm if the property has been issued a certificate of occupancy for a multifamily building.

@Account Closed

I'll agree with the input here that MLS access is key to an accurate ARV. Just having access though isn't enough, you need to have someone experienced in how to interpret the MLS data for it to be any more accurate than the syndicate sites (Zillow, Redfin, etc). Many agents (especially those with REO listing experience) will provide broker price opinions (BPO's) in exchange for a fee. This is the most effective and impartial way to get a solid ARV number. Usually it will be more cost effective than a full independent appraisal. I would suggest looking around your area for foreclosure (REO) listing agents and reach out to see if they would provide private BPO's and agree on a fair fee that makes sense for you and the agent. Best of luck!