All Forum Posts by: Rob Na

I don't read the news often because of stories like this. I cannot believe how one sided this sap story is. Can anyone point out all the items they left out to complete the business circle?

Think like a landlord and read this...

http://www.npr.org/templates/story/story.php?storyId=100519127&ft=1&f=1001

Originally posted by Hassan Omar:

Originally posted by Rob F:

I figured it out.

What did you figure out?

Rob

You do realize that the point of this exercise is to show the thought process and the flow from beginning to end. Yes, i did notice those things about the houses, but I have not gotten to the point in explaining why to eliminate or make offers on them.

Please stay tuned and allow me to complete the process.

thanks

H

Sorry, I figured out how to edit. Most forums have the edit button in a different location that BP.

I guess I was under the impression you were actually going to purchase one of these based on the topic title.

You're spending a lot of time on it already, why not get the numbers right? If you arn't going to get the numbers right, you might as well just make a list and publish it, no?

You are referencing todays MLS homes as retail priced when actually they're already very heavily discounted due to the large supply. In other words - one end of your equation is too heavy.

My point is that you are showing that your purchase price is 33% of the resale price. Even though your numbers show it as being the correct price to pay relative to the ARV you'd like to achieve, your ARV is incorrect for this market thereby watering down or possibly even invalidating your example. I think what most people will grasp is the order of steps but not necessarily the ease to which they happen or the accuracy of the work performed. If you performed the math on today's market with an ARV of say $75k, you'd have to buy the home for less than $24k (33% of 75k, very rough) given all of the costs associated with the repair can be reflected linearly to a lower priced home (i understand this is not the case but makes for a better explanation). In actuality, you'd have to purchase for even less than $24k. Additionally, keep in mind you only build in $10k worth of profit.

While I really appreciate the time you're taking to complete this thread, I think its also important for some to understand these numbers are ideal and not current market or real world.

I figured it out.

#605356 1752 MARIE WAY Lawrenceville, 30043 $61,600
4x2x0
#468390 2561 RAMBLING WAY Lithonia, 30058 $61,800 3x2x0
#620885 3423 CENTERSET COURT Snellville, 30039 $50,000 3x2x0
#598314 4497 FOWLER LANE Snellville, 30039 $58,000 3x2x0
#610379 4083 MASONWOOD COURT Snellville, 30039 $66,800 3x2x0
#548177 4425 CARRIAGE TRAIL Stn mountain, 30083 $39,000 3x2x0
#610634 5421 RIDGE FOREST DRIVE Stn mountain, 30083 $44,000 3x2x0
#617608 1292 MUIRFIELD DRIVE Stn mountain, 30088 $40,500 3x2x0
#543121 2107 SCARBROUGH ROAD Stn mountain, 30088 $48,800 4x2x0

I wanted to say that I am impressed by your level of commitment to not only the thoroughness of your research but to also posting and updating us here. Thanks for that!

I am near you so I was curious as to what you were finding.

I noticed that the first house on your list is a double wide. I'm sure you're not going to want this as there is no amount of fixup going to make it worth >$100k.

The second one on the list is a duplex or condo. While I dont think there is anything wrong with these you need to check on HOA fees as they are a deal KILLER for a potential buyer. Additionally they arn't worth SFH money so your ARV would have to be adjusted accordingly.

The third house looks like it has potential. It has a nice driveway, nice house placement, and plenty of trees. The interior looks decent enough. With the right colors, this would have curb appeal. Did you budget for landscaping?

The fourth house has good surroundings but without further research, I can't tell which one on that street is for sale since i didn't see any pics in the listing.

Fifth house is ugly and would need serious money to get its curb appeal back. This is just IMO.

Sixth house is not the prettiest one on the block but it is in a cul-de-sac which is nice. I hope you budgeted for a new deck :).

Seventh house has only a 1-car garage. Other than that it looks just doable. Might have a nice back yard but hard to say. No interior pics.

Eighth house looks promising with a decent overall property and decent curb appeal for this price range but will definitely need exterior paint :).

Last house I know only that its in a cul-de-sac... cannot find any pictures.

What is wrong with this one..?
2079 Scarbrough Trl E, Stone Mountain, GA

That house has some real nice pictures and its list price is $45k. How are you going to compete with those prices since this house is not only in Stone Mountain but it was on the same road is the last one on your list for $48k? I don't know the market in Stone Mountain very well but I can tell you that there are decent 3/2 and 4/2 houses listed for $100k when I look up that area on the MLS.

Why isn't this one on your list...? It is actually more visually appealing then any house you have listed. Paint it neutral and you have a fantastic looking house with that bay window.
976 Sheppard Road STONE MOUNTAIN, GA

Or this one...
1384 TO LANI FARM RD STONE MOUNTAIN, GA

It has a very nice back yard with a nice pond view. IT only needs minor cosmetic repairs.. so it says. Its in cul-de-sac and has good curb appeal.

This one is gorgeous and makes me want to buy it as my personal home, especially for that price!!!
1763 Wedgewood Overlook STONE MOUNTAIN, GA

I hate to burst your bubble but there are page after page of homes for sale between $50-75k that need some level of work. There are even MORE $75k-100k that do not even need work!! How do you expect this to be anything but a money-losing battle even 12 months out?

What I took out of this thread of good info...

If they cause damages or require extra-ordinary cleaning, charge them for it. If they cannot or refuse to pay then consider getting a judgment from the court in the amount owed. The next place (or the one after that if the paperwork isn't filed in time) they try to rent from, the judgment should show up. If this is done it will give other property managers reason to believe they wont keep their property clean and deny them on their app.

Hopefully that would work but I'd have to dig a little deeper to determine if their is anything in there that would be against the ADA.

I do not have any experience to the value increase of a property due to a park added during my ownership. However, I have shopped for property adjacent to parks so take my experience as just that.

I think you'll find that the value of the property located near a park is comparable to that of a golf course. If your property faces the park, you can expect a significant value increase provided that the park does not have any detrimental features to a homeowner. This could include such things like bums living there, a nasty pumping station right in front of your park frontage, etc, etc...

You have to think of it from a typical family's point of view as a homeowner. If the park is within walking distance then that is a huge plus. It may add value or it may just add demand (demand may add value in a normal market or in this market may make the difference between selling and sitting). If the house has frontage to the park, thats a huge plus but there are things to look out for if the park isn't built. The park can increase road traffic, noise, bums, and many unknowns. There is definte risk to consider if you're purchasing property with your bet on the park. If you can purchase it with more than one exit strategy (will cash flow as a rental OR will flip) then you can mitigate most of that risk. Like any other investment you make money on the front end, not the back.

Originally posted by Tom C:

PNw, It sounds like maybe your rails are too far apart and maybe a babys head could get stuck in between it them. That would be a horrible experince for a little baby to go through. :)

Seriously though, I respect your beliefs on Sec 8. I have a Sec 8 tenant who is a single father of 4, ages from 5 to 17. 3 girls, one boy. He works full time and takes care of his family. The wife ran out on him shortly after the 5 yr old was born. He also works on cars on the side for extra cash.

He is a good man and takes his kids to church every sunday. He's kids are good kids, maybe a little lazy, but still good kids. I have a lot of respect for this guy. He pays his protion of the rent on time every month. Put in his situtation, I am not so sure I could have done what he has.

I stopped over the other night at 9pm to check on the place and he is working out in the rain on a car doing a break job. He was trying to make some extra money so he would be able to buy school clothes for his kids.

Sorry.. But that is enough to even pull at this hard *** cops heart stringes a little.

Good story!

I'd be half tempted to pickup one of those portable tent things and set it up in the driveway for him. At least to show him you appreciate him.

I'm not sure what you mean by "Purchased with the property?" If you mean, the seller will complete them for an agreed upon sales price of $55k, then great, you have a fixed priced contract.

If however, you mean you are planning to do all this:

"The repairs include all new entry doors, new PEX plumbing, new vinyl windows, new kitchen cabinets and countertops, electrical upgrades with new fixtures, new toilets, new tubs, new vanities, painting, drywall work, new vinyl tile in kitchens and baths, and new carpet. "

For $25k, you may want to get some quotes on materials and labor because that sounds like an awful lot of work for $25k. I find that an itemized bill of materials is a great start. You can add your labor TO it and adjust it for a margin of error due to unforeseen material costs or additional work. If you plan on doing the work yourself, it's going to cost you lost rent which I'm sure you've already considered.

Thanks for the replies!

The property isn't explicitly non-warrantable. According to a lender I spoke with, one can determine if it is warrantable by visiting fannie mae or freddie mac's website. They have a list of warrantable condos and if its not on there, she said its non-warrantable.

Now, I asked if they could evaluate it case-by-case which seemed logical to me and she said yes, but it's expensive. I have a hunch that she was trying to blow me off because the loan was only for $50k and her origination fee would be terrible in comparision to the $500k she's used to.

I called another lender and they said they do case-by-case and its a freddie mac program. I wont know until I close.

The kicker is apparently all condos in distressed markets that have PMI are now required to be funded with no less than 10% down. I now have to close before Feb. 28th to get my 0-5% down which is going to be everything but impossible. Oh well, i'll still try.

If you guys have any suggestions, throw them my way.

Thanks!

You should look into the HUD teacher next door program that offers a 50% discount. See this post:

http://forums.biggerpockets.com/about357.html