All Forum Posts by: Po Chan

Redfin may have the data you are looking for.  One can search for past sales and download the data set directly.  Here is an example link for data for San Francisco:
https://www.redfin.com/stingra...
While it is free and easy to work with, there are some limitations such as:

*Sales data goes back only 5 years(it used to provide data back to 2012)

*The number of records is limited per search.  As the result if the area you are searching for has too many data point, you will need to zoom in and make multiple searches.

*Redfin provides data to part of the US, but it coverage is extensive enough for many cases

@Evan Polaski

Again due to my inexperience, I thought it wasn't my place to argue what I though the appropriate valuation of the property should be, and I have being holding back on this discussion with my lender.  Thanks for the suggestion.

As matter of fact, using my background experience in software development and data analytic, I have built a valuation tool for SFR properties to help with my investment decisions. Now I thought about sharing this analysis with my lender. The question becomes how much detail one would go into when building a case on how much the property is worth? The analytic method and mathematic I uses requires some advance training in data analytic such as multi-linear regression and cluster analysis.

I don't know the requirements and training needed to be a mortgage officer or underwriter.  While I am confident with my analysis and can go into details on where the data comes from and how it was cleaned/scrubbed to how and why the valuation model are built, but will these type of detail be useful or I risk of sounding full of BS to my lender?  Do you think information such as this would be useful to build my case or I should stick to a more traditional method of using justifiable comps to build my case for the valuation?

@Patrick Britton

Thanks for the response I think you are spot on and rightly point out the stress appraisers are under in today's condition, which I did not fully appreciate.  This is my first time applying loans from a hard money lender.  In my previous experience when applying for conventional loans, the appraisal process has always been a breeze and only issues that has ever came up was appraised value was higher than expected and if I want to increase my loan size.

The issues with appraisal started almost right away after I submitted my loan application(it has been over 3 months and it is still on going), because of my lack of experience with hard money lenders, I wasn't really sure the real source of the problems I am facing.  Your input has clear that up for me, thanks for the perspective and tips.

I recently got an appraisal done on a property that was completely rehabbed for a cash out refinance. In the appraisal report, one of the comp used is a house that was sold for $199,000 on 6/2/2020, three months before the appraisal was done. Almost an year ago, 1212/2019, the same house was sold in REO sales for $99,050. Despite the more recent sales in the non distress condition, the appraiser insisted that the previous REO sales price is more reflectively as a comp even when the appraisal report stated the property being appraised is completed rehab and does not have(if any) issues or concerns.

This seems to be incorrect assessment.  I was wondering if the appraiser does have a valid point or he is holding grudge against me for scheduling issue that occurred earlier.  I called him out on not following lenders instruction to provide me with at least 24 hours of notice before coming for for appraisal as I need to give my tenant 24 hours notice for nonemergency issue.

One way to look at this is think of this as a finance problem of comparing different sources of cash flow.  To make the comparison, you can calculate the net present value(NPV) for both selling and renting the house.

NVP for selling the house would simply be $100k.

NVP for renting the house is a bit more complicated, as it will require the assumption of risk free interest rate and future market value of the house if when and you decide to sell the house.  Assume the house sales for $0 30 years downs the road and 5% risk free interest rate through out the next 30 years, $1000 monthly cash flow is equivalent to will over $200k NPV.  So in this case renting it would be a better choice.

@Alex Lade have you find the data source you are looking for? I have a similar idea and was able to find some regional data that includes sold price, address, bed, bath, sqft etc.  Feel free to pm me for the details. 

Yes did have a title insurance and just open a claim regarding this issue. Hopefully this matter can be resolved soon.  Is there anything I should watch out for or when going through the claim process?

@Shannon I will PM you with the info regarding the title and escrow company.

Thanks for the respond.  The  initial balance on the loan is around $16,000.  I am expecting the remaining balance is around $13,000 to $14,000.  While we will still come out profitable paying off this loan, but it will be large chunk of profit.

Wayne,  I know the loan is recorded on the county record, but I don't know what "unrecorded mtg" is, can you explain a bit on that?

We are selling a REO house we bought 5 months ago. As we going through the closing process, the title company found out that there was a loan that was taken out by previous owner that was never paid off. The loan was opened with San Bernardino County CA through a program called SANBAG HERO program, more information can be found here:
https://9662473e561b2ca15fec-e...

The payment of the loan was paid biannually together with the property tax.  Apparently previous escrow company that handled the transaction when I bought the house 5 months ago missed this loan.  I was told that in order for us to sell the house, we will need to resolve this loan first and the best way to proceed to close on time(Oct 9) is to paid off the loan with the sales proceeds and then ask for previous escrow company for reimbursement or file a claim with the title insurance company.

Is title company making such mistake a common occurrence?  Also, what would be the best way to pursuit previous escrow company or title insurance company for reimbursement?  Should I hire a lawyer to handle this?

Hi Tarun, thanks for the respond.
Initially I also thought $1230 would be the correct number to use.  However when considering the cash flow if I sell the 1st house and pay back the remaining loan,  $630/month would be the threshold I need to achieve to obtain a higher cash flow with that 80k from the sales.  Am I wrong trying to use ROE to decide if I should sell in this situation?