All Forum Posts by: Mahinda Horapakse

@Peter Mckernanok sounds good. Thanks again!

@Peter Mckernando you think showing the appraiser a copy of my appraisal from 2018 will help? As I mentioned, his current appraisal is 158k and the 2018 appraisal was just a tad under at $150k

My appraisal came in significantly lower than I expected (only a 5% increase from the value the property was appraised at 4 years ago, in spite of values generally increasing 40-50%). Looking at the report, the appraiser chose two comps that are 1000 sq ft (my property is 1300 sq ft). To compensate for the lower square footage, the appraiser has added about $3000 to the sale price of those comps. This is killing my valuation since $3k is barely anything to compensate for the difference in size. If I do a simple price per square foot value of the extra 300 sq ft my property has, the additional value that should be added to the comp is about $37k. My question is- how can an appraiser be justified in thinking an additional $3k added to the sale price of the 1000 sq ft comp compensates for the smaller size? What am I missing here?  Thanks

Thanks all for the replies. @Taylor L. my reasoning for wanting a longer or indefinitely hold period is due to the recurring cash flow. Yes cash flow metrics shoot up when you project a sale at year 5, but that also means needing to go searching for another deal to put that capital into (in additional to cap gains as you mentioned). I'd much rather be in a syndication that adds value, refi's out at year 5 or less, returns all or a substantial amount of capital to investors via the refi, and continues to hold and build equity into the future, then refi's again to harvest that equity. Also the refi's avoid any cap gains, which is huge. The reason I'd rather be in it for as long as possible using this strategy is the same reason I'd rather never sell my own rental properties. Yes the value has increased but they continue to produce cashflow and build for as long as I hold them. 

Every syndication I come across plans a sale of the property after 5-10 years. Are there any that specialize in an indefinite hold period? 

@Mel Hayes@Jerry PuckettThank you! You got me thinking that the scope line item estimates do not necessarily need to be completed by the contractor. So upon reaching out to my HML to confirm, that was in fact the case. It's the first time I'm using hard money so I'm learning the process. Agreed that walking the property and coming up with my own estimate is an essential skill...and I know there are frameworks out there to help with estimates. Again, thank you for your input and helping me solve the dilemma!

I’m in a dilemma. My wholesaler accepts hard money. But my hard money lender requires a detailed repair scope of work to be filled out before being approved for the loan. This would require me to have my contractor do a walkthrough and spend time writing up a scope before I submit an offer to my wholesaler. Given I’m not the only offer, it’s likely that my offer doesn’t get accepted. I’d feel bad wasting my contractors time doing walkthroughs and writing up detailed scopes of work on every property I offer on. To those of you who buy wholesale deals with hard money, is there a better way to go about it? 

@Remington Lyman@Patricia Steiner@Richard Shearrow@Zeke Liston@Sean GrabowThank you for the responses. @Sean Grabowthat would be really appreciated. Thank you so much for the offer. I'll send you a note

Hello. I am trying to start wholesaling in Columbus. I am not new to investing but am new to wholesaling. I've been working hard to educate myself on the end to end process (e.g., souring leads, negotiations, calculating MAO's, double closings vs. assignments, understanding the different markets/neighborhoods in Columbus, etc. etc.). The part that I'm stuck at is wholesaling nuances in OH specifically. I understand that a broker's license is needed to legitimately wholesale a property, and that without one, you can only market one's legal interest in the property. Is there a resource (a book, training, website, or anything else) anyone can recommend that will help me understand this area better? I understand that marketing the legal interest to a property means you cannot market photos of the property, but I see plenty of wholesalers do this, while still advertising that it's a "contract for sale".

Similarly, how does one show the property to investor buyers without photos? Can I even allow end buyers access to scout the property physically if I'm not legally allowed to market the property itself?

And if I can only market a contract for sale, can I even claim to the seller that I can "provide a cash offer"? Can I legitimately sell my services as a cash offer even though I'm not the end buyer? 

Any guidance / direction would be appreciated. I've hit a roadblock and am having trouble findings answers to the above. Thanks!