All Forum Posts by: Steven Scheetz

Thanks for posting this. I knew about ALE Solutions, but not CRS. So I just registered my property with that one as well. This is the first time I'm attempting this strategy, so I'm kind of flying blind. Any details of your experience and how it works would be greatly appreciated.

Cheers!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $290,000
Cash invested: $110,000

First investment property ever. Did everything wrong, but great example of how with a long enough time horizon, real estate is a very forgiving asset class. Bought from seller, after his mother passed away. Was looking for a quick and easy sale. Bought it as a 1-story 1300 sf house and added a 2nd story almost doubling the square footage to about 2400 sf.

What made you interested in investing in this type of deal?

Huge value-add potential.

How did you find this deal and how did you negotiate it?

Word of mouth. The seller was the produce vendor for my mom's restaurant. He said his mom passed away, and he was going to move into her house and sell his. She told him I was looking to purchase, and I could buy it as is, and the rest was history.

How did you finance this deal?

5-year Adjustable Rate Mortgage. Eek! Appraisal came in way higher than purchase price, so didn't need a down payment.

How did you add value to the deal?

Popped the top, adding a second story with two new beds and 1 bath, and a laundry room.

What was the outcome?

Still own it. Did a cashout refinance to fund future flips.

Lessons learned? Challenges?

Too many to count. Great learning experience. Honestly I was underwater for a few years. Almost lost the house at one point, but was able to get a loan modification. Learned a lot about construction. Learned a lot about property management. I'm glad I did it, but wouldn't recommend such a heavy lift on your first investment.

I've read a lot about using lease option strategies from a landlord/seller's perspective.  But in this crazy sellers market, my in-laws are consistently being outbid.  So how do you find landloards/sellers looking for potential lease option tenants?

I have a mortgage advisor friend who is putting on an event geared towards women using real estate to build wealth.  She asked me to try and find a female local to Reno, or nearby, who has done at least 10 deals, who would be comfortable being a panelist at her event and speak about her experiences.  These deals don't need to be in the Reno market.  She just wants someone in the area, because she plans to make it an in-person event (socially distant and responsible of course).  So if you know anyone, please let me know.

Have an opportunity to flip a manufactured home. Current recorded as personal property, not yet converted to real property. Will hard money lenders lend on it if it’s not yet converted? Are there specialized inspectors I should hire for the purposes of converting? Is conversion to real property difficult, or time consuming? Aside from the title recording fee, what other costs should I expect to convert to real property?

Hi Roy.  Let's connect.  Reno is rad, but anywhere that you can find a house for $300k may be a place you want to think twice.  The average home prices these days in Reno are about $450-$500k.  That's not to say $300k isn't possible, but if you're from out of town, and looking for a move-in ready place, you should really know what you're getting yourself into.

@Pat Jackson that’s awesome man! Congrats!

Hi All.  I am still searching for my first investment property.  I found a property on Zillow that is listed as a 4b/2ba, and is priced as such.  However when I pull up the public record, it is recorded as a 3b/1ba with smaller square footage, and an unfinished basement (coincidental the exact difference in square footage from the listing).  This tells me that the "finished basement" with an extra bed and bath, is not permitted.

I doubt a lender will lend on it as a 4b/2ba with the extra square footage, which tells me that there is an opportunity here to negotiate down the price to be more in line with the recorded 3b/1ba houses in the area.  But how difficult and costly would it be to get the basement permitted so it reflects on the county records?  Would I have to completely gut the basement, and redo it with the necessary inspections? 

I live in Reno too. Making a cash flow play here is pretty tough at housing prices where they are now. Average rents tend to be at or only slightly above what a 75% LTV mortgage would cost you. So essentially one month of vacancy could wipe out your entire year's cash flow. Also Reno/Sparks tends to have pockets all over the place. For instance just a few blocks to the south of my house, homes have been selling for 700k to $1M, but just a few blocks to the east of me, they are selling for 350k or so. So dialing in an accurate ARV requires someone familiar with all the little pockets. "Within 1 mile" doesn't really cut it here. You have to look at the specific neighborhoods.

However, as an appreciation play, it's a pretty solid bet.  Even though the housing prices have somewhat plateaued in the last year or so, people seem to be fleeing the metro cities of California in droves for one reason or another.  So houses don't tend to stay on the market for very long.  Places like Reno, Vegas, Phoenix will likely be the beneficiaries of the continued mass exodus.  Reno's also doing some really rad stuff.  The city has really kind of found its voice as a destination town for outdoorsy activities with lively culture, a somewhat laid-back livability.  We've largely shed the reputation of "The Poor Man's Vegas" from about a decade ago.  We're 45 minutes away from Lake Tahoe, which will always be a destination hotspot for tourism.

I love my city. I'm proud to live here.  However, I will say if you're going to invest from out of state it is crucial that you work with someone here locally with boot on the ground, who is familiar with what's going on development-wise, and which pockets of neighborhoods that could be the difference between a $350k house versus $1M house.

Has anyone done a sub-to deal in Reno, NV? Looking to connect and discuss your experience both positive and negative. Also curious if you’ve enlisted the services of an attorney for this sort of deal.