All Forum Posts by: Patrick Britton

@Ayyoub Ajmi  yes, you SHOULD ALWAYS have an offer contingent on an inspection, appraisal, financing, etc., but based on comments and replies this project seems a little too much.  perhaps start off with something a little simpler like a single family turnkey property?  

be extremely careful with statements claiming certainties, "When the rehab is complete I will be able to get $1650/mo gross and $180k ARV." 

Since this is your first you might want to have a few realtors give you CMAs. if there's a large range in value pay for a private appraisal in hypothetical condition (repaired). I see investors get killed every single day because their ARV was totally off. And even if your ARV is correct, there's always the risk and appraiser sees things differently.

This business has much that is outside of your control...too much frankly... 

"very unique and truly one of kind property" = run away.  Unique property isn't a good thing.  Find something that has little chance of destroying your life and you'll survive to buy another property.  Buy something unique and it could be lights out long before the real damage manifests itself.  

@Cara Rohde lenders and appraisers HATE unique properties.  It's up to to the end user, the lender in this case, to determine what TYPE of value approach to use and lenders assume a lot of risk with unique properties.  As well, going the route of cost-approach guarantees nothing.  In fact, if you request one (and the lender agrees) you're likely to end up with an even lower value considering most appraisers use standard build costs to arrive at values with the cost approach.  

Unfortunately i can only suggest trying a more local lender who, of course, will charge more fees, higher i-rate, etc.   

@Alexander V.  sounds like you were using Gold Star Mortgage.  

@Elizabeth Popa as someone who dove head first into the rental business I would advise anyone looking at doing the same to re-think everything.  Maybe diversify a little bit with some well-placed stock purchases, like with Redfin, for instance?  
With each new purchase the quality of my life took a step down.  Tenant issues, constant repairs, updates, utility bills, etc. and then tenants who don't pay rent, leave their junky cars to be towed at my expense.

Even with an amazing property manager I have tons of regrets.  

looks like i've got to represent the less-travelled road again.  As a FORMER agent/realtor it is my humble opinion that becoming a successful agent requires only a few basic skills that most humans already possess.  What is under-appreciated is luck and longevity.  If you can survive as a real estate agent for at least 4 years, you're likely on your way to doing well, eventually.  
Picking a niche, segmenting your market, etc., is a nice strategy for your vision board, but far less important compared to the daily grind you need to embrace.  

@Joshua McMillion you must have been very lucky. The vast majority of VA loans require at least 45 days. i've worked with lenders who average about 45 to 50 days to close (sample size +300). it often has nothing to do with the lender, but rather how soon the appraisal is ordered, how close to perfection the condition of the property is, how quickly the appraiser can get to the property, how many assignments the appraiser is burdened with, and to a lesser degree is the complexity of the property, borrower and if your area is more prone to pests, insects, etc.

Lastly, (and this is only based on personal experience working with about a dozen VA borrowers in WA state) houses near military bases tend to get approved quicker than houses far removed from bases. I don't like speculating, but presumably there are more VA approved appraisers in areas where VA loans are in higher demand.

@Jake Tilleson  Here's a possibility:  the removal or reduction of an attached 4-car garage reduced the value significantly more than the additional 500 square feet of extra space.  how to test this idea?  Are large garages common for properties in your vicinity?  If all the comps have larger garages, and yours in now smaller, than will impact value significantly. 

Here's another possibility:  for refinances appraisers are trained to be more careful with valuing "improvements."  In other words, they are careful not to overvalue work done to a property.

And here's one more:  refinances don't have a "contract price" associated with them.  So unless the appraiser gets a sense of what others (including realtors) think a property is worth, they will be extra cautious and likely undervalue 

Lastly, no two appraisals will result in the same value.  Unfortunately, appraisers aren't trained the same which means that appraisers will consistently end up with different results, despite the fact that they are all looking at the exact same data.  

You can file a complaint with your state's regulatory body (for negligence and incompetence) but if you're going to dispute the value you'll need to present facts and supporting evidence that even the strictest appraiser couldnt argue with.  

VA funded purchases require a VA appraisal, which can often be stricter (in terms of condition requirements) than other loan types. As well, getting a VA approved appraiser takes longer because frankly, there are fewer of them. The closing timeline is also longer.

In short, VA funded purchases require more time under contract and a near-perfect condition of the house. Compare this versus a conventional loan, which can very easily close within 30 days. most VA loans close in 45 to 60 days minimum.

Considering how insane the market is, sellers are better off waiting for a non-VA borrower who has a higher probability of closing on time and with fewer extra requirements placed on the seller's house.