All Forum Posts by: Matt Bell

I am actively involved in 6 deals currently in Montgomery and know the market well because I went to law school there.  I now live in Houston, Texas though.  Let's all set up a time to connect about this market.

Have you tried Lima One Capital?  Matt Lineberger is a good guy to chat with.

Thanks for all the feedback.  We talked her off the ledge and they are going to move forward on all our current deals.  We are going back to seller to see if they will negotiate the sales price down to the appraisal - so in the end it might be to our benefit. 

We recently received a low appraisal on a home that needed significant work.  The appraiser used homes that were 2-4 miles away from the subject property - in Montgomery, AL that is a long distance and the neighborhoods are not comparable.  We identified 2 very good comparable properties that were in the same neighborhood and wrote up a very nice letter - no name calling - pointing out our concerns with the comps used and asking if the appraiser would kindly reconsider based on the additional comps we have located which seemed to be better for comparison.

The loan officer we were working with sent us back a rather rude email and essentially broke up with us.  Once we finally got her the phone after a few days, she claimed that no one challenges appraisals and if we wanted to be difficult - we could take our business elsewhere.

Has anyone every experienced a reaction like this before?  The loan officer seems to be overly protective of the appraiser.  For a number of reasons, including that we have 2 deals pending with this bank that we need them to close on or they may fall through - just going somewhere else is not an immediate option.  

Thanks everyone for the feedback.  I should clarify that we had 1 of the 7 houses under contract and were ready to move forward and that is the only bid we asked for in writing.  All others were simply verbal estimates of the totals he thought it would take and all the properties were within a few minutes of each other - mostly in the same 2 neighborhoods.

We were actually going to offer him $150/bid going forward before we got his invoice.  We now offered $300 to settle the issue and move on.  We have learned a lot during this process.  One other point - we were not going to initially send him out to all 7 properties but he asked for the entire list of what we were considering so he could give us an idea of what a rehab would cost since we were just getting started in the business.

We have a new contractor that seems trustworthy and we have already confirmed he does not charge for bids - but we also learned only to send him to houses we have a contract on that are likely to move forward.

Thanks again - you all are awesome!

Hello BP Crew,

We recently had a contractor in Montgomery, AL go look at some potential properties we were going to bid on and one we had a contract on.  He never mentioned charging us for anything and we just asked him for an initial ball park estimate on the houses that were not under contract so we knew if it might even be worth our time to bid.  The house we had a contract on fell through after which the contractor sent us a bill for $1,100+ for the time he spent preparing the bids.  Granted, we only received 2 bids but he claims he worked on 7 (we sent an initial list of 7 properties).  He is charging $65/hr to put bids together.  Has anyone else encountered this?

I spoke to two other contractors in that town and they said they never get to charge for bids.  If someone doesn't hire them after a few bids they might decline to give future bids but they never get to charge.  I finally got the contractor on the phone and he admitted that he normally doesn't charge for bids but "we are different."  The only difference we could identify is that we are remote investors.  I think he is just trying to take advantage of the situation.  

If I am way off and some contractors do charge for bids - please let me know what a standard rate would be.

Thanks in advance for your help!

Matt

Welcome to Bigger Pockets. I am also new to BP but have already found it to be a wealth of information - which will eventually lead to wealth if you internalize the lessons learned from others. If you have not checked out the podcasts they are a must listen to - for new or seasoned investors. There are no dumb questions and it is truly amazing how fast people jump in and give you feedback. You definitely receive far more than you give as a newbie but eventually you will be able to pay it forward in a few years. Good luck and I hope to see you get active on the site.

Welcome to Bigger Pockets. I am also new to BP but have already found it to be a wealth of information - which will eventually lead to wealth if you internalize the lessons learned from others.  If you have not checked out the podcasts they are a must listen to - for new or seasoned investors. There are no dumb questions and it is truly amazing how fast people jump in and give you feedback.  You definitely receive far more than you give as a newbie but eventually you will be able to pay it forward in a few years. Good luck and I hope to see you get active on the site.

Hi BP Community,

I just got a contract accepted on a foreclosure in Montgomery, AL in a good area near a local college. The contract price is $39,900. My realtor gave me an ARV of $117,730. I do not have a good rehab estimate yet but a contractor I was referred to says he has rehabbed similar age houses in the same area and he expects top end to be $30,000 but should be less for sure. My realtor's company also does property management and they gave me an estimated rent of $750-$900/mo in rent depending on how nice we fix it up.

Ultimately I am trying to build up a portfolio of buy and hold properties to rent to law students in the Montgomery Area but since this is my first deal and I live in Houston - I am wondering what advice you may have on wholesaling it for maybe a $10,000 fee, flip it for a potential profit of $40K+/-, or rehab and rent it out.  If anyone has good contractor recommendations for Montgomery - please let me know because as a remote investor - that will make or break this deal unless I wholesale.

If I rent it out, my costs would be as follows:

$455/mo PITI

$100/mo property management fees

$150/mo allocated to repairs/vacancy (build up over time as major items should be repaired during rehab)

That would leave me with $45-$195/mo in cash flow.  Although, if we rehab to rent we can probably go a little cheaper on finishes and save some money on the rehab as opposed to trying to flip for retail.

Your feedback and advice is greatly appreciated.  Excited to have my first deal working.

Matt

Thanks everyone!  We had a good trip to Montgomery and have a number of options to decide from in getting started in that market.