All Forum Posts by: Mike Sattem

Thanks everyone. The housing market in our area is tenuous, as our two largest, and pretty much only employers, are the University and a Lumber mill which opens and closes every several years. I agree @Jeff M. and think I will hold it for as long as I can, especially since I have another rental home which can cover the bills of both (barely).

I have a 2/1 home that was actually my wife and I's first house that we turned into a rental when we bought our new home. Being in a college town is great, tons of renters, however their move in and out schedule sticks to the school year, so if they leave early, finding new renters can be tough. I have dropped the price on this home down to rock bottom to get tenants in and still am having no luck. I have $30K cash equity in this home, not to mention the $15K in upgrades, however I can only sell it for what I paid for it, maybe a little less even. So, the question is this, should I continue to hunt for renters and possibly eat money every month due to no tenants, or low paying tenants, or do I sell it and lose not only the money I have paid in upgrades, but also some of my paid principal?

John,

I have never run across this and personally believe them to be a waste of time, as your typical appraisal curriculum is not oriented towards determining a realistic value, but rather determining a lendable value. I have been involved in several deals with completely unrealistic appraisals for a variety of reasons, such as lack of comps, the type of loan used for financing which can stipulate different valuation models, or a flat out bias by the appraiser against dirty/dingy houses.

The only value of these types of courses may be to tighten up your ability to make adjustments to available comps. I would rather spend my time making connections with local landlords/real estate groups.

Hey Bonnie,

An owner carry contract is typically secured by the subject property. If you defaulted on the note to the seller, he gets his property back, plus whatever you have paid him. There is no reason why he should get the subject property, and a chunk, or possibly all of a property they has no involvement with. If they push hard for this I would be very leary, unless they are willing to write in a release clause stating that after you have paid so much towards their property, they will release their interest in your other property.

I have wrote many of these and I would find it hard to believe they would ask for your property as collateral, unless you are showing up to closing with little or no money down.

Hey Michael,

1st off, Great Name. Now lets get to the business. A Benefit Company, or B Corp, is a for profit company focused on social/environmental issues, i.e. not what you are looking to do.

Also, you definitely need some type of operational agreement between you (the manager) and your mom (a member) of the LLC. This can be really straight forward and states what you as the manager are allowed to do without specified consent of the members of your LLC.

Also, indemnity means to hold harmless for losses. This means that if someone sued the LLC, the lawsuit should not pass through to the members/managers of the LLC.

I would strongly suggest getting in touch with some flippers in your area, as they can give you some tips as to what they are looking to buy, aka what you should be looking to wholesale to them. I have always had decent luck buying people a good lunch in exchange 30 minutes of their time. Most folks are pretty good about spreading their "secrets" especially in a bigger market like Newberg/Portland.

Omar,

1. Your search needs to be as close to the subject property as possible. This is pretty easy in larger markets, but can be quite cumbersome in smaller markets, as "exact matches" can be hard to find. I always match beds/baths before I worry about sq/ft, as that is where the majority of your value is determined. Side Note, I am in a very small market, so I have to make price adjustments to comps all the time.

2. Comps need to be sold, as they are the only real show of value. I can list a home for sale at whatever price I want, but the sales price, is the real showcase of value.

3. This depends. I personally have a spreadsheet I use that shows all costs, likely rents, and returns, and I do share this with beginning investors/clients. However, I have come to find that most serious investors have their own system of evaluating a deal. In this case, I provide them with as much information as I can gather, and allow them to set up and evaluate the data within their own criteria.

Hey Adam,

I utilize 1 Checking account for my properties for simplicity. However, this account is linked to two savings, one for each of my rentals. I do this so I only have 1 debit card/checkbook and can easily track all expenses, however I can keep my deposits and maintenance savings separate per property.