All Forum Posts by: Soniel Estime

I am currently trying to close on a deal where the appraisal came in low. I am the buyer and the seller is currently contesting the appraisal but isn't providing any good comps to overturn the initial appraisal. The property is solid, newly rehabbed and potentially has some value add opportunity (Adding coin laundry and potentially charging for extra storage in the basement). The inspector didn't find any major issues with the property besides the garage door not working. The property is currently rented with tenants who have been there for 2 years. I have been contemplating, if/when the challenging of the appraisal fails, should I move forward and pay the difference on the property? My first thought is to meet them in the middle at $240,000 I provided some details of the deal below, what would you do? Keep in mind that the goal here is to buy and hold.

Purchase Price: $250,000

Down payment: 5% 

Seller Credit: $1500

Appraised Value:$232,000

Monthly Mortgage (Tax, insurance, PMI): $1450

Additional Cost for repairs: $2500

Building Water Cost: $200 per month 

Units: 2

Rooms: 2 bed 1 bath Each unit 

Rents: Unit 1- $1100 Unit 2- $1150

Square Feet: 900 Sqt

@Joe Martella

Wow Joe, lots of information, and beautifully formatted. I really appreciate the help! 

@Kyle D Birch

Hi Kyle,

Thanks so much for the great feedback, I have not closed yet, we should close at the end of this month, I have asked for the rent rolls. Are you saying that rent rolls won’t tell the full story and I should ask for bank statements showing those deposits?

That is a scary thought to inherit tenants that won’t pay. I wonder if the seller will allow me to interview the tenants before we close? The property is on the south side. I really appreciate all of your input.

Thanks,

@Sean McLaughlin

Hi Sean,

I would recommend Basit Siddiqi. He has been filing for me for 4 years now and he has done a great job. When I was searching for a CPA I was looking for someone who also invest in RE and Basit has been my guy! He is def highly recommend.

Hope everyone had a great holiday!

I had a duplex that I sold in 2021, now I’m getting ready to get back in the game. Last time I placed the tenant myself. They were someone I knew so placing them and managing them was super easy.

This time I will be inheriting tenants, and in a city like Chicago I want to make sure I do everything right.

1. What steps should I take now, to prepare for inheriting these tenants?

2. What’s the best way to get a very good lease (I used rocket-lawyer last time)

3. What’s the best way to find a good handyman (I did a lot of the repairs myself last time, but want to be more hands off now).

4. Any recommendations on a good property management platform? I’m planing on using Rent Ready, if you have used it please let me know your experience with the platform.

Thanks so much, let’s have this year be the best year ever!!

@Paul Welden

Hey Paul, sorry for the late response, I was taking action and haven’t been on here for a while. Thanks so much for the great information! It definitely came in handy!

@Tai Bhattad

Thanks Tai,

I actually am partnering with a few buddies and will be participating in a tax lien sale in Indiana. I dove in and got the information I needed, now it’s action taking time!

@Nathan Leger

Hey Nathan, I know how you feel. I was worried about that a few years back. I had a 9-5 and still have a 9-5. I wanted to invest and was terrified of the what if’s. I did as much studying as I could about investing for a year. Something that helped prevent me from getting paralyzed was giving myself a deadline. I gave myself 1 year b4 I had to invest in my first deal. There is only so much studying you can do, as long as you learn how to understand numbers when it comes to deal, you will be fine. Try evaluating your risk tolerance and make a plan based on that. For me I was very risk averse. I had just got married had no money and got all of my education on investing from podcast books and YouTube, just like yourself. Nothing compares to diving in. I went with a house hack as my first deal bc comparatively it was low risk. Long story short I had a contractor run off with 20k on me and it took me a year and a half to complete the full gut rehab on a duplex….. I know, sounds bad, but there was a happy ending. I held that rental for a year after the project was done and made 12k from rental income and over 90k on the sale. I use those funds to pay off all my consumer debt and had money to invest in other deals. Ppl spend 50k and up to get a degree in something that might not earn you close to that amount. I payed 20k to get educated in something that will make me that hundreds of times over, not to mention I got my money back… Once you get your first rent check, I promise you that you will be thinking “What was I so worried about”

My point is investing is the best thing you can do for yourself, your spouse, your children. Figure out your Y and ask yourself if it’s worth the risk. You could also look at it like this… what’s scarier, investing and maybe losing some money but probably building a good amount of wealth. Or working a 9-5 for 30 plus years and hoping you have enough to retire, and hoping your healthy enough to enjoy retirement, and hoping you have enough to support your children’s when they go off to college or get married…

You got this!

I have been thinking about tax lien and Tax deed sales as of late. I have been looking for a place to park a little cash until we see a dip in the market. I figured tax liens/deed sales would be better then leaving my cash in a savings account to let it get eaten away by inflation.

Does anyone have any advice for a newbie tax lien/deed investor? What are some potential pitfalls to look out for? Do you know of any good training material to help me gain the basic knowledge that would be need to succeed in this category?

@Ryan Herting

Thanks so much for the input, I think my biggest challenge right now is learning about the best financing options for different types of deals. I currently have a lender but he is a more conventional lender and can’t always answer my questions about financing options. I would love to get on a call with you an pick your brain if you have time?