All Forum Posts by: Mark Vejnar

Tope Rockland Sorry to hear about that. I recall hearing about Cameron Dunlap and his shenanigans when we lived in Norbiton back in 2010. Where in London are you focusing your efforts? We observed the lack of a multiple listing service - are you using agents to find properties?

@Robert McDonald

How is the market in Petersburg these days? It used to be so beautiful with stunning neighborhoods and gorgeous old homes. We would do all our shopping in downtown Petersburg when I was a kid. It was great. Then something happened. I don't know what, but all the stores shut down (almost overnight) and the Walnut Mall was virtually abandoned. I've driven through a few times through the years and it's been a little frightening. My family has referred to it as Virginia's very own banana republic. Has it changed in recent times? 

I sure hope it has. It's one of the more beautiful historic communities in Virginia. 

Operating one LLC will eat up some capital, more than one might get expensive by the time you consider all the associated fees and time with your CPA to ensure compliance. As others have already said it's best to have some discussions with a CPA and maybe a lawyer, too.

@Derek Carroll

It really depends on the market. City assessments can be within 3% in some areas. Other areas can vary widely. Its important to know your market and how assessed values compare with market value. 

That said, I agree. Do your own analysis and base your decision on numbers you and your team have developed. If your unsure, then ask an appraiser for a feasibility study. These fall under USPAP standards 4 & 5 and can be quite helpful.

@Jim Thomas

Did you ask the assessor about it? What did they say?

I'm in a small but growing community in the Deep South. Some of the nearby neighborhoods have assessments under $10,000, but the homes are past the end of their economic life. It's not unusual for the properties to have no heat, water, or sewer because the occupants couldn't pay the bills. Unfortunately it's not feasible to rehab these properties because the break-even point is decades into the future. Redevelopment authorities are working on solutions but it's a slow process and the money available is far from what is needed. These are textbook examples of F locations.

I currently have opportunities to buy in a couple of these locations. In one particular neighborhood I can pick up several vacant lots, "abandoned" homes, and some SFR properties (which presently appear as though plotting an excruciating death for their occupants).

The general consensus seems to advise avoiding these F locations; however, there is a catch. The zoning is awesome. If I can capture whole blocks at a time (as it looks like I'm about to do) I can build whatever I want. Multifamily? Sure! Mixed use? Yep. There are caveats (sewer is a big problem), but these F areas border A and B+ areas. I've got a vision for these F-bombs and believe I can redefine the neighborhood creating an A location - but it will take years. 

What would you do in this scenario? Draw it up and present to anyone who will listen? Or would you pass and focus on something else? And please give your reasoning if it's not too much trouble. 

@Bryan Hart

Your CPA is probably the best person to ask. As for labor, it's probably going to depend on how you operate your business. A friend with a waste removal company pays himself the same hourly wage he pays employees. I don't know how he claims it, but I'm sure his tax advisor does. There's so many variables and complexities to taxes that make it difficult to obtain appropriate guidance for your specific circumstances from this forum, or any forum for that matter. Your CPA can see the whole picture and guide you accordingly. 

I hope that helps.

@Chris Mason

If you get on the appraisal institute's mailing list you won't have to speculate. It does happen. Sometimes the reasons are local, other times federal. But usually federal - even when they're local. 

You've read lots of reports, I'm sure. Comparable sale analysis doesn't start until the second page of the 1004 (or any report). Everything on the first page, and especially the top half, carries more weight - the rest is just application of the law of diminishing returns

Welcome @Joel Fischer

I love the pig and cocoa farm. That's awesome. My wife grew up in Mercy Ships sailing up and down west Africa while her parents did surgeries and relief work. There is so much to be done there. I wish you the best!

@Caitlin Worrell

You do have options.  

I've heard of people appealing with their lender - have you tried this?

If the bank gives clearance you can discuss the report with the appraiser. 

You can find a member of the appraisal institute and ask for a review of the appraisal. 

You can prepare for a new appraisal by looking at appraiser-selected comps - some appraisers will do a comprehensive search for comparables, and then discuss them with you. 

You can order your own appraisal. 

I know it's infuriating. All the new guidelines have more than doubled appraisers' cost of doing business while simultaneously reducing fees. They have to avoid any hint that a buyer, seller, lender, owner or any other party had an influence on their opinion of value. Then they have to field calls all day, write responses, and new reports. It's pretty typical for appraisers to work 12-18 hour days. I did. Maybe your appraiser is overwhelmed and made a mistake.  

Talk to your bank about options. Appeal if you can. Maybe have an attorney review the appraisal if you feel you've been damaged - appraisers do carry E&O insurance. Either way the market seems like it's accelerating like in 2004-2006, so maybe just apply again.

Good luck!