All Forum Posts by: Patrick Britton

Recently, I asked a "vendor" with whom I've had a professional relationship for 4 years for a referral to a real estate agent, because the previous two I had were idiots.  He gave me a brand-new rookie, fresh out of licensing with a background in COSMOTOLOGY.  This idiot was dumber than the previous two.  Long story short, Roofstock saved the day.  

If you are a realtor, property manager, whatever, it doesn't matter...don't refer your "valued" clients lousy, incompetent people.  It's one of the easiest ways to lose business permanently.

@Bruce Lynn as an appraiser, it is my humble opinion that 80% of all courses have very little to do with day-to-day tasks of an appraiser (you know, like nearly all professions requiring Continuing Education credits). However, the most valuable course one could take would be the 2022 USPAP but it's extremely technical and without a considerable base of experience as a lender or realtor or investor, etc., it's going to be like learning another language.

@Kyle Stanton thank you for taking the time to learn about other parts of the business.  I'll reach out to you privately.  

Definitely start going to investor meetings and meetups and other networking events in your area.

But don't worry, there's plenty of time to lose money in this business. After all, you're buying at the all time market high and there are going to be several rate increases this year which will absolutely put a damper on the market.

As an appraiser, please believe me when I tell you that if an appraiser thinks you're overpaying for a house, you most certainly are and should probably not do it.  If I showed up and a property to conduct an appraisal and the buyer was there cleaning I would make sure to look extra, extra closely at all of the possible deficiencies, because that reeks like the buyer is trying to pull one over…

lots of advice from people who are NOT appraisers here... 

As an appraiser, those comps agents and investors provide us are WORTHLESS.  It's not offensive to me (i always pretend to be appreciative), but it demonstrates a lack of knowledge on how appraisers are REQUIRED to produce credible results.  We have to bracket condition, bedroom count, etc., with comps, and if you don't know what that means, your "comps" are a waste of time.  

@Bjorn Ahlblad i really hope that person was joking 

@Nick Gu i have multiple issues with the "need" to protect oneself with LLCs.  Not because they don't do anything if you go toe-to-toe with Johnny Cochrane, but rather because of the indirect costs.  Specifically, taxes and borrowing expenses with LLCs holding property are outrageous compared with personal ownership.  As well, what's the probability that all of the following with occur to YOUR rental:

1. tenant hurts themselves 

2.  tenant has feasibility to hire top gun attorney

3.  mediation and everything else fails, go to court

4.  you lose 

5.  you lose to such a massive extent that insurance or other legal protections are needed to keep you living off the streets. 

So, IMHO the likelihood of you needing the various protections touted by lawyers is near-zero. And considering the costs, like needing a commercial loan vs. residential, filing taxes, etc., not to mention the costs of forming the LLC, annual filing with the state, etc...

I dont give my Tesla shares a present.  So why do my tenants get anything?  

@Anthony Middleton

@Anthony MiddletonYou have three problems over which you have absolutely no control I'm afraid.

Firstly, appraisers across the country are overwhelmed with the amount of work. There are far too many real estate agents and far too few appraisers. Earlier in the year I read that there were more licensed real estate agents in the country than there were listings. That is insane!

Your second problem is that with FHA financing the lender needs to find and FHA approved and qualified appraiser. There are even fewer of those people.

And since it's a multifamily and the fee isn't significantly higher but requires a lot more effort and time, I wouldn't be surprised if a lot of appraisers decline that assignment.

And while the temptation might be to call the appraiser and scream at them I will tell you that that has the exact opposite outcome you're looking for. That's something brand new real estate agents think they can do.

@Oscar Catalan Yes, two thoughts: some banks will let you use time at college in lieu of work history. But you'll need to talk to a couple of mortgage loan originators about the details. A possible alternative would be using a commercial lender or hard money lender but then of course that has a whole different set of problems and issues.

Here's a third thought a little bit out there that I would expect some pushback with: you wait. You wait until you have the two years of work experience, you wait until you have a sizable down payment available, you wait until your credit score gets as high as it can and you also wait for the market to settle down. Now is not a good time to buy. And I say this as an unbiased and independent person with nothing to gain or lose.

@Nikolas Hamon yes, there is such a thing as adding TOO much value to a flip.  

The overwhelming number of real estate investors don't have the faintest idea how an appraiser will derive their opinion of value.  Every area is different but in my neck of the woods, rooms, bedrooms and bathrooms in the basement (below grade) or not given any additional value above and beyond what they are.  You have a half bath in the basement?  That's worth an extra $3500 in many markets.  It doesn't matter if the toilet is made of gold and the mirror has been replaced with diamonds.  So, make sure that the cheapest stuff goes downstairs 😊