All Forum Posts by: Scott R. Fahl

Hi Megan. I'm the founder of Privy and would be happy to introduce you to some of our users to get some insight into what we offer. I'm also happy to discuss your specific needs to see if we are a good fit. Please feel free to reach out.

Muhammad - I'm afraid you are referring to another company that is also called Privy. Our platform is for those participating in real estate investing (investors and agents) theirs is directed towards ecommerce. 

The original question is a great one and the responses in my opinion (for the most part) all point to one glaring problem. Unrealistic is the norm since no one knows what realistic is. People being unrealistic is not being produced by BP but it's an overall lack of information one needs to make educated decisions. Investors AND Agents/Realtors are digging hard enough for it.

Let me explain...

How can an Agent or an Investor decipher what's realistic when every market, every zip code, every city block is it's own eco system of real estate activity. People on BP can tell you their stories and you can try to force their results into your market but that will almost never work. This produces frustration from Agents/Realtors trying to educate the investor with mostly sold comps from the MLS and the investor frustrated because they feel the data being produced is not good enough to change their minds creating a who's right and who's wrong scenario.

It comes down to data...

I believe the easiest solution to all of this is to find what other investors are having success with IN THE EXACT SAME AREA and emulate it. If you know what people are paying for properties, what they are selling them for, what they are doing to them (construction levels) and how long the process is taking, it's awfully hard to be unrealistic with what is possible  - even if someone on BP says different. 

Thanks Bill and Matt.

These deals can be tuff to decipher. 

I was surprised at the turn around time as well. 

I've always looked at these deals as how much cash one makes in the end. In this case even if they built for 700k (which I think is low) we are talking 170K left. For simplicity let's just take out the real estate fees only which often times get discounted at that price level so let's say 5% = $77,450 and then split $97,550 with your partners and it seems like an awful lot to go through for 45-50K not to mention VERY little margin for error.

Of course I'm making some assumptions 1. that you paid a Realtor(s) commission (which I'd think you'd have to assume your going to at the beginning 2. that you have partners (which is often the case).

Can anyone help see something I'm missing?

Check out this example of a teardown in Denver. I'm trying to figure out what sort of profit this type of deal produces. 

The deal: Purchase a property for $544K, tear it down and build a 5729 square foot property that has top of the line everything and sell it for $1,549,00 in 11 and half months.

What do you think? Did this investor make money? If so how much do you think they made?

I've attached the details below (I apologize for the screenshots but not allowed to put links on here).

Your right, I did miss some exchanges in the middle. I should have known those were to good to be true in the Denver market. 

Let me do some more research and see if I can find some different "best deals".

I've been doing some research on the tight Denver (and surrounding areas) market and I found what I believe are the 2 best flips (best = most profitable) in the last 6 months.

I was surprised to see the spreads from the original sale prices and final sale prices to be over 300K when the final sales prices are only 500K and 412.5K. I didn't think deals like that existed in the Denver market anymore.

Whomever these investors are they scored big!

I've attached the before and after figures below. Might have to zoom in on the images a bit.

If you know of any other properties in Denver that have large spreads please share.

Cheers.

Privy real estate investment software automates the tedious task of searching for deals, analyzing properties, running comps and calculating after repair value so you can find deals fast. We save our users hours a day, and they close more deals in the process, and find deals in unexpected places. 

We'll help you close more deals in less time, guaranteed. Start your 14-day free trial at http://www.getprivynow.com/biggerpockets

 Hello Matt,

Writing to let you know that the algorithms have been updated and works much better then before.  There are also some tricks to setting up the system properly to avoid seeing properties you aren't interested in.  I'd be more then happy to help you with that.  you can reach out to me anytime.

If the addendum is filled out by everyone I don't think you can take it as a good or a bad sign. It's just the banks policy.

It is NOT the norm for banks to have all offerers sign an addendum before verbal acceptance, but it does happen.

We have 18 contracts with banks to price, clean, re-key and list their REO's. Out of 18 we have one that requires an addendum to be signed up front.

Getting to view REO's before they are listed is easy.

The company I work for has what we call a pre-list of REO's. It's a list of properties we are contracted to list for any one of the 18 banks we work with, that we are in the process of cleaning, re-keying and doing BPO's.

I have several investors that I have given this too and have made several offers before the property is listed. The problem is we have no idea of the number the bank is actually going to list the property at, when the property is going to get listed (2 days, 2 months...) and they almost NEVER entertain an offer before the property is listed. You can spend a lot of time spinning your wheels with a pre-list and end up with nothing more than frustration.

My best suggestion is to get a broker who knows what they are doing. A broker that can weed through all the new REO listings and send you the ones that are the deals. Then get a system together that allows you to react quickly to new listings.

Reacting quickly means getting the property from the broker, reviewing property for a construction budget, work with the broker to come up with an ARV (after repair value) and make an offer. All with-in 24 hours of the property being listed.

If you can't do this your going to have a tuff time competing for the deals as there are several others that can.