All Forum Posts by: Tenzin Gyaltsen

@Reggie Greene

Glad to hear, good luck!

@Reggie Greene

Hey Reggie,

As an agent and a flipper here in Denver Colorado I deal with the appraisal process all the time. Things here in Denver seem to be fairly lax as the prices seem to be increasing continuously (however, not as fast as they were over the course of the last few years, but still rising). I'm not saying Appraisers aren't doing their jobs, just saying values are easier to find. That being said we're always worried about the appraisal and proving the top of your ARV. When I am having one of my properties appraised or having an appraisal for one of my clients I always put together an Appraiser Packet. I leave a hard copy of this packet and send them a PDF as well. This packet contains the following:

1. A letter to the appraiser talking about how many offers there were and the details of the offers (in a multiple offer situation, the neighborhood, the attributes of the house that you may not see if you’re just looking at it (i.e new sewer line, new water line, etc.) and some notes on the comparables

2. Subject property information (listing sheet)

3. Detailed Improvement List (arguably the most important. An appraiser can guesstimate what you put into it but how great is it if they had a to-the-penny budget?!)

4. Comparable property one sheeters of active, under contract, and sold properties. Sold being the most important as those are closed.

As for your questions: You don’t have to sell your property at any price that you don’t want to however, one of two things has to happen in order to sell it to these buyers:

1. Drop the price to the appraised value

2. Buyers gap appraisal

People who are borrowing money to pay for a house will not be able to get a loan for more than the property is “worth”. It’s worth to the lender is based on the 3rd party opinion of the appraiser. You can do a few things in this scenario:

1. You can have your agent dispute the appraisal and ask if they can send over comps to help prove your price if you believe it is being undervalued. You should double check your ARV and make sure that it was correct also. Obviously there's no point in doing this if you are for sure overpriced. This may be a conversation you want to have with your agent, especially if they gave you incorrect information to begin with.

2. You can terminate the contract and put it back on the market and hope that another appraiser has a different opinion. The argument here is that you’ll lose time and money if the same thing happens again and you end up selling at the same price 3 weeks later. Even worse, it comes in lower...

3. This is an odd one but everything is negotiable so.... you can ask the buyers to gap the appraisal... meaning come out of pocket what ever the difference is between the contracted price and the appraisal. I don’t suggest going this route, it’s unlikely that they’ll say yes and it’s not necessarily reasonable.

To me confidence in your ARV is everything and I want to be able to prove my point relatively easily. Using the above process I've seen some really great results on properties that honestly may not have appraised without it!

Hopefully this was helpful in some way!

@Allen Smith  Hey Allen, thanks a lot for the suggestion!  I sent in my info via FB, I'm sure I'll be in by tomorrow!  I'll looking into Nathan Miller as well!  Thanks,

@Kurt Michaelson

Thank you for your response!  I'll look into the groups you suggested, meetup is a great idea and I'll PM both of those people and see if there's a match to be had!

As for your question on the wholesaler... Wholesalers seem to be like rolling some dice. You could get snake eyes or you can get a 12! From my experience, there are a whole lot of "wholesalers" trying to get their foot in the door and have no actual experience or knowledge. I just need someone who tends to tie up actual deals. It helps if their rehab estimate is somewhat accurate but I've learned to completely ignore it, run my own numbers and see if it works. If you have a decent wholesaler, they should be sending over a deal every now and again. I have wholesalers here in Denver that tend to send over overpriced garbage consistently. The ARV is usually too high and the rehab estimate is too low. I often see properties labeled as a "cosmetic rehabs" and find out upon entry that it's much more than cosmetic. I'm just looking for someone or a company that has a pretty good footing and sends over some decent properties!

Thanks again!

@Ethan Mastrodonato @Ethan Mastrodonato Regardless of whether you are self managing or doing a lot of work yourself, you should still have numbers in there for both as it may need to pay someone else to manage in the future and materials cost way more than you think! You change a water heater and you just lost more than a months worth of rent! Cap ex can kill you. I’d suggest continuing to search and don’t do a deal if it’s too thin. If this is a really great opportunity in an area you think is going to really turn around and you think a hold will pay off, I think you can chance a risk like that but speculative investing is dangerous in its own right. If you’re dumping all your money into it and it doesn’t do what you think, you could be shooting yourself in the foot. Like someone else said though.... over bidding leads to “buyers remorse” very quickly. You start to wonder why you won and if it was a bad idea to win. Your best bet is to know your numbers going in and stick to them no matter what. If you lose, onto the next. Or if you’re willing to over pay a little, understand that and overpay a little.

Hi All,

I'm seeking to find a few contacts in the OKC and Norman area. I'm a realtor out in Denver with a heavy focus on flips and I've got family out in Norman. Because Denver is relatively expensive and the rental market is tight, I'm interested in seeing if I can get BRRRR property there and I'd like to start building a team. I think I found a pretty solid company that can help with renovations and project management but I'm still missing a few people I need! Your referral for the following people would be greatly appreciated:

1. Knowledgeable Realtor (that has time for an investor)

2. Reliable Wholesaler

3. Hard Money Lender, preferably not a huge company

4. Property Manager

Now I know from personal experience, recommending people can be tough... they may have done a good job for you in the past but end up dropping the ball for someone else.  I'm not worried, any recommendations would be greatly appreciated!

Secondarily, can anyone direct me to a REI Group in either place? Facebook group or anything works.

I'm headed out there in a couple weeks or so and would love to line up a few people to meet with!

Thanks in advance,

@Matt J. Wow, now that is pretty ridiculous. While real estate is hyper local, on a general scale it's interesting to see what's going on.  While not everywhere has seen drastic changes like Denver and Seattle, it's pretty good everywhere.  I'm interested to what the next down turn will be like and how that will effect Denver, Austin, Seattle, and other like cities that have seemed to have drastic growth in the last 5-10 years.

@Matt J. Thank you very much!  It's definitely a tough and frustrating market at times but when you do find a deal and you do a good job, it's fairly easy to get rewarded for it.  You're right though, everywhere has increased dramatically and people are paying too much for fixer properties which makes it hard to find something worth doing.  Just gotta keep your ear to the ground and ready to pounce!  How is Puget Sound?  It's pretty hot there too, isn't it?

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $230,000
Cash invested: $100,000
Sale price: $392,000

This was a Duplex that we purchased for 460K. We put 200K into the rehab, subdivided and split the lot and will sell each unit individually. Together they will sell around 800K total.

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

We love this style of building and the structure is still in great shape. It was exciting that we could blast out all the interior walls without having to do structural work, improve the layout and essentially start from scratch and create two beautiful units we could sell individually.

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

My partner had been talking to the agent owner of the property for a couple years and when he met me, decided it was time to step into the fix and flip arena. The seller knew what they had and because we were willing to finance it with them, they gave us a good deal on the property and left some meat on the bone for us.

How did you finance this deal?

We got creative and did a seller finance deal. We raised 160K total so they could pay of there loan in entirety and then they financed us with a 9% hard money loan (no origination) for the rest including the rehab.

How did you add value to the deal?

We essentially turned them into 2 brand new 2 bed units save for the old sexy brick that we exposed. We did all new everything.

What was the outcome?

Two very beautiful units that appraised for more than our original estimated ARV!

Lessons learned? Challenges?

Stay on budget! What ever you do, get as close to the budget as possible and make sure you have a number for something you needs fixed, even if you don't know what it is. The budget will kill you if you don't harness it.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I'm and agent and so is Forrest Johnson, my parter! I definitely recommend working with us, haha. We both work for Madison and Company and would love to help anyone out here in the Denver Metro Area

@Dave Vona I’m an agent here in Denver that focuses on Fix and Flip Investors. I project manage others as well as my own flips. I’ve got contractors and a strong base in Denver County. Please feel free to contact me at your convenience!