All Forum Posts by: Bryan L.

@Keshia Hasten - How much over-all investing experience and knowledge do you have?  From your description and your questions, I would say that you don't have enough education yet to be putting anything at risk on a deal like this - especially from long distance.  For example - a great area isn't enough in-and-of itself to make a great l-o deal.

Now, if you want to get this under contract and wholesale it - first off, does the seller have any equity?  Also, if they have already signed a listing agreement with a Realtor, you would be interfering with a contract if you were to try to cut out the Realtor.  That is grounds for a potential law-suit.  Also, on a short-sale, you have to negotiate a sales price with the lender as well as with the seller.

@Wane Tango 

 Like I said, the tax appraisals in Dekalb and Warren Counties tend to run higher than true values, and those in White County tend to run a bit lower.  A few years ago, I was buying, rehabbing and keeping properties (renting them out or selling with o-f).  I would then do a cash-out refi with a bank and get my money back out.  I had a bank that would do a refi at 85% of the tax card.  So, I easily knew what I could get back out before I ever made an offer on the thing.  It made that part of it easy, being able to work off the tax card instead of having to rely on a real appraisal.

In my area, I can pay the property taxes any time between October and February.  If you can, go ahead and pay any property taxes that are due.  You could also go ahead and make your next mortgage payment so that you have a higher interest write-off.

@Account Closed There's another recent thread on this. Look for the title to be something about comps and ARV. Also, don't do the appraisal thing. You can hire 3 different appraisers and get 3 different numbers that can vary by quite a bit. It's not an exact science.

@Wane Tango I keep thinking of more stuff related to this topic (be sure that you read the other posts above too).

Here's something else to consider. Your listing price and the final number that you get out of a deal are two separate things. The process that I described above is a good process to set a listing price. But realize that most houses in our area actually sell for 95-98% of list price. And most first-time home buyers will also need for you to pay 4-6% of the sales price in their closing costs assistance. AND, you may need to do a price drop (or two) to get them to sell quickly. Most of this is covered by the standard formula (70% of ARV - repairs), but that closing costs thing really needs to be added into that formula.

Also, the tax appraisals can some times give you a good ball-park number.  They tend to run high in dekalb and warren counties though and a little low in white county.

@Wane Tango Some more thoughts (also read what I posted above).

Time on market is an indicator too. For example, if I look at somebody's house and they tell me that's it's been on the market for 6 months at 95K, then I'm thinking that it ain't worth 95. Especially if it's been on the MLS for 6 months at 95.

Here's another thing.  When you go to list and sell a completed rehab to the retail market, it needs to be priced in line with similar properties - and ideally a little lower than similar properties.  Now that's pretty easy.  Go to realtor.com or our local association of Realtors website and do a search.  Search as if you were a buyer looking to buy a house that's just like yours.  Search the same area, search the same age of house, search the same number of bedrooms and baths, etc.  Say for example that you get back 10 hits (or maybe even more).  List those asking prices from low to high.  Through out any that are foreclosures or rental house.  Now you have a list of what your house will be in competition with when you put it on the market.  You want yours to be priced are or near the bottom of that list of prices.

@Wane Tango You need to be very careful using those free sites. There's some useful info on them, but there's also some trash. Even with MLS and direct court-house info, you have to weed through it a bit. For example, I use a system called CRS which is included with my MLS. When I run a comp analysis using this system, it pulls info directly from the court-house records. And it will set up a nice little bar-chart histogram for me. I then look at that histogram for things that look out-of-line. For example, it may give me 8 comps, and 7 of them may be in the range of 80K-90K. And one of them may be 30K. What the what? Obviously, something is different about that 30K sale. Should I include that sale in the calculation of the average? Probably not.

Also, you will get the feel of it after you have looked at more houses.  For example, I heavily target houses in one particular county that were built in the 1970s and 1980s, with about 1100 - 1400 square feet.  I've seen enough of these (and bought enough of these) to know that they typically retail in the 70k - 80k range.  Overall, in our area, a good guestimate starting point will be 70-75 $/ft^2 for houses built in the 70s or 80s.  Once you get into those built in the 90s or newer, you may get into 75-80 $/ft^2 for houses with vinyl siding, and maybe a little more for brick houses.  Newer brick houses with all the bells and whistles will be getting up there to $100 per square foot.

Anyway, I can show you some time if we can meet at my office or for lunch or for a beer.

@Ed Schell - Most newbies get way too caught up on this aspect of "setting up your business".  Sure, you will need a place to work from (I do a lot of mine sitting on my "spot" on my sofa at home in the living room).  But business entities are not a requirement for most of what you can do with investing.  Actually, you can do pretty much everything without a business entity.

@Clint Dorris and @David Cook 

 - I have leads near Muse Park and near UM-Lambuth.  How are these areas of town?

@Edwin Solivan I can still remember very vividly when my Father told me, "Oh son, don't quit that good-paying job".  I can also remember very vividly when my wife used to literally get head-aches when I would bring up the subject.