All Forum Posts by: Tim S.

I'm on the alumni board of a fraternity at a CA state school.  Most of the guys I've talked to hate on-line classes, it's harder to learn that way for a lot of people.  Kids still want the college experience, which means real life interactions with people, living on or near campus.  

As the parent of 2 fairly recent college graduates, it was important to us, parents and kids, that they had the on campus experience.  I don''t see this changing a whole lot.  Yes there will be more on-line classes, some families will be fine with this as their entire college experience.  They are focused on getting the piece of paper.  But really college should be more than just getting the diploma.  A lot of life lessons, and people skills will be missed if it's only an on-line education. 

So I think higher end, more expensive/prestigious schools will be less affected.  Those families have the money to give their kids the full experience.  The parents are more likely to have had that experience themselves and see the value in it, and will want it for their kids.  

@Sean H.  Unicorns, buy unicorns.  
If you have high W2 income, there's not many write-offs that can help.   Start a side business, many expenses for the business can be written off. 

All the books I've read are pretty superficial, enough to give you a basic understanding, but not enough to be actionable.  Probably because it would take volumes to cover it adequately.  As Chris mentioned this is a good one, and the most detailed.  Chris's podcast is the best, Good Deeds Note Investing

https://www.amazon.com/Bulletproof-Title-Due-Diligence-Investments-ebook/dp/B079128N8J

I'm using Wells Fargo with a series LLC, don't know why it should be a problem?

I'd recommend this one, I'm a member

https://noteinvestingacademy.com/

Ok maybe worthless is the wrong word to use.  If you are trying to understand the property value for your own knowledge, then I say they are a waste of money.  Sure you can interpret the BPO and make adjustments to the information to more accurately reflect the state of the subject property.  My point was that you can do this yourself for free.  Especially for low value properties <$80k, the percentage of error you can expect is high.  Therefore spending the money to get some realtors guess is not money well spent.  I think my educated 'guess' is probably just as good, and its free. 

"BPOs are notoriously inaccurate. You should always review BPOs to see if the agent has been using best practices to determine value. Comps should be within half to one mile of each other, less than 6 months, similar square footage, bedrooms, etc. If the BPO wasn't done well,"   My point exactly, so why bother paying for one if you have to second guess it.  If you have the knowledge to tell if it's wrong, then you may as well come up with your own valuation. 

Now, if you are trying support a valuation to some 3rd party then the BPO is going to be more credible to them than your own assessment, that you derived from publicly available sources.  When I'm on the other end of that BPO, when a seller is trying to tell me a house is worth X, and I'm pretty sure it's much closer to X - 30%, the BPO is pretty worthless to me.  So I think the only value of a BPO is to convince some unsophisticated person of a value that is probably not very close to the true value.  Sounds pretty jaded, but that's been my experience with them.  

BPO's are next to worthless, just look on Zillow and find others that are similar nearby houses.  Assume your property is worse than others, possibly a lot worse.  If it looks like a dump outside, assume the worst inside.  Your estimate will be just as good as any BPO.   Maybe find a realtor who will go take a look at it for you, pay them $50.  Find one who has a house listed nearby, they will be in the area anyway.   I've had some success with this.  about 25% of them will actually do it, even if they tell you they will do it, a lot will flake out.  So get a few of them lined up.  

O&E report is a must (title search), after you have an agreed deal with the seller. 

@Ben McFarland Investor agents need to know what makes a good investment property. Investors are interested in the numbers, ROI, Cap Rate, etc. How much can I rent it for? What is the RV ratio? What parts of town are renters interested in? What features make a house rent quickly? You should develop relationships with good property managers, handymen, contractors, lenders, title companies, insurance agents.

Don't show me houses that are too nice, too fixed up, too expensive.  Owner occupants usually want houses that are pretty, don't need any work.  Investors usually want the opposite, houses that don't look great, but have no major problems, and with not too much time and money can be improved into something that people will rent.  You need to be good at finding the latter. 

AND the basics, answer the phone, return my calls and e-mails.  

A couple things that have already been mentioned but are worth reiterating.

$14k isn't enough, low end properties bring low end tenants, more expenses and drama.  On  paper the % gain may look good, but absolute numbers aren't that impressive and who needs the extra stress and drama?  You need at least 3-4 months rent on hand for unexpected problems, repairs, etc.

Travel to the market before buying anything.  Reach out to BP members in your target markets, ask for referrals.  Meet potential partners face-to-face, Property Managers, Realtors.  See as many houses as you can so you have a feel for what is typical for that market.  What kinds of features are renters looking for?  What kind of property defects are common, shifting soil? cracked foundations? flood zones.  

See as many neighborhoods as you can, what is the vibe of the place?  Know what a good price/rent ratio is for each area (RV ratio).  Where are the good schools, stay away from terrible schools and high crime, usually the same areas. 

#! most important relationship is the property manager

I do own some student housing, I'm concerned about the short term.  Fall semester is likely to be impacted with most classes being on-line.  Longer term students will still want to be on campus, it's a far better and richer experience, I don't see that going away.  

As far as demand goes, it's important to pick the right schools.  Many schools have far more applicants than they accept.  Elite schools reject over 90% of candidates.  Less competitive schools reject over 50% of applicants.  So even if demand goes down significantly, many schools will still be full.  Some will certainly see a lower enrollment.  As always location matters, and markets are local, impacts will vary, one answer doesn't apply everywhere.