All Forum Posts by: Ray Johnson

@Christopher Machir  He sounds like a very good articulate salesman, "buy into his lending partnership for $9,000" makes zero sense. There are a lot of ways to structure a deal that will provide more security for your money

@Philip Bashaw @Jennifer Preddy Egbert has great advice, In my experience previously working in the private equity industry a client with 25 million to spend will be attracted to a particular investment model, a certain level of risk mitigation, and a minimum Cap rate target. I would ask this client why aren't they looking at institutional grade assets instead of these small projects you're mentioning. Do they already have an institutional grade portfolio and looking to offset it with what you're looking to provide as an addition to their portfolio?

@Jamarr Lee If you're going to do well in this business I would suggest eliminating the guesswork when looking at properties. You should get a few contractor contacts in your phone and get them to look at your potential projects and provide quotes. You'll need several on your list because there will be times when your favorite contractor is on another job and you'll have to use another one that's on your list and available when you need them.

I don't know about your area but if you're really in need survey the Home Depot parking lot for the vans and trucks with signs on them marked Contractor, Home Remodeling, etc..  Before I had my list of steady contractors I used a couple of those guys to provide quotes. Make sure to research or asked them to send pictures of their work if they don't have a website, and get reference before using them to perform.  

@Chris C. the important question I have is what is this property really worth? Pricing in the area seems to be lower than what you've projected to sell your property. If I were a buyer what is this going to appraise at?  

@Will Johnston I have a few 1 bedroom units in DC and I have laundry in all of them, Are you in SE DC or in NE on the other side of the Anacostia? Even the voucher tenants in DC have a lot of options for 1 bedroom units with laundry, I would factor in laundry if you want to mitigate turnover.

8-10k seems a little high to add a laundry closet in a 1 bedroom, All of your bids are coming in around this same range?

@Gail Armstrong I'm currently in escrow with Wells Fargo on an REO Owner Occupant required property. The first thing you'll want to do is get the Comps from the area of the property so you'll know what the property would be worth and factor in what your contractor says it will cost to get the property in move-in condition.

I have a post from earlier today regarding my appraisal, the property came in appraised higher than list price. I offered the bank list and ended up scoring on the deal because I knew they lowered the price to get more bidders. Most people don't do all the due diligence to know what they should bid, Once you do you'll be ahead of the other bidders.

@Robin Boyer I used the same strategy as @Kenneth Garrett There are deals to be found depending on the MLS, take a look at my post on appraisal valuations from today regarding a Freddie Mac property I acquired, I also look for the Freddie Mac, Fannie Mae, and HUD Homestore properties. I get them as owner occupant properties before they get bided up by the investor pool, I live in the underpriced properties for the required one year period then I have a market value property with equity and rent it out, then go onto the next one.

I don't do flips so this is the best strategy for me as a buy and hold investor.

@Chris Mason Thank you for the great information, That would definitely explain why he used the $225,000 it is the closest to the sales price in almost a year.

I didn't know about the database that maintains the Fannie and Freddie Mac stats on appraised value versus sales price. I did read on another BP post from an industry person stating that they do not like it if the appraisal comes back 15% or higher above sales price. I came in at 12.5% higher so I think the appraiser may have done me a very big favor by using the one low priced Comp in the bunch even if it was 9 months old. 

I guess it's safe to say mystery solved for the low number. I'm good with it coming in at $225,000 for sure, I have a feeling it'll be made up whenever I decide to sell the property or if I every refi'd the property as a BRR strategy. 

Yes, It has the owner occupant requirement of move-in within 60 days of closing and I cannot sell or rent it for the first 12 months from the closing date. I have no problem moving from my current home to this one for the potential profit in this deal.

I was able to get it under contract very quick, I start the analysis process immediately, about two hours after it came online for Owner Occupants only. This one came online around 4pm one day and when I saw the Comps were as high as they were, I had my agent meet me at the property at 9am the next morning, I had my full priced offer in before noon knowing it was worth more than list and there may be others not coming in at full price anticipating the typical request for "Best and Final offers". There was no need to ask for any discount based on the numbers. I did ask for the 3% closing which they said yes to so that was $6,000 added onto the deal. They accepted my offer on day 6.

@Jared Page you will have to spend some money to get started. Even the cheapest of start-ups in the RE industry as Wholesaling still requires money to get started with signage, list, gas expenses for driving for dollars etc...

If Wholesaling is definitely the route you're going to do I would recommend connecting with wholesalers on this site to find out what the cheapest and most efficient way to get started would be, ask about lessons learned, etc.. before spending any money if you have limited resources to get started.

@Joey Collins never ever let a tenant install anything in any of your properties, you are asking for trouble if you let that happen.

If you wanted to enhance your property or the tenant experience, a ceiling fan is a very cheap add to a property so it would be an easy upgrade.