All Forum Posts by: Jeremy Wells

I have had two homes with wells and both required very minimal maintenance. Here's some tips and answers to your questions:

* You need to have a pump specialist in your contacts just like a plumber or electrician. If a lot of houses in your area have wells, one should be easy to find. They can also handle your water softener system and give you advice on how high of quality system you need based on your well water quality.

* Neither of my houses had water storage tanks - just 25-gallon pressure tanks. These tanks have a bladder that gets compressed and maintains your plumbing at 40-60 psi just like a municipal system would be, and also provide a little bit of storage. A pressure switch turns your pump on and off as needed. Your pump specialist can also handle this. Don't use a standard plumber.

* Instead of advertising free water, consider charging a $20/month well service fee for the tenant's water.

* A well doesn't necessarily mean a high water table. My homes were in the mountains where many homes had Wells that were over 500 feet deep. If your state requires well permits, the permit will tell you how deep your well is and how deep the water table was at the time of drilling. If you do have basement water problems, they can be solved with a well-designed french drain.

* If you are having more problems with your well than what is typical for that area, you may need to get your well inspected to see if your well casing needs to be replaced. That is the slotted pipe inside your well that allows water to infiltrate from the ground into your well. If it is badly corroded you could be pumping rust out of your well or you could be letting more than just water through your well casing.

Guys like Bob give investors a bad name.

The HELOC is from US Bank for $47k. This is not a made-up scenario; I agree that it was a dumb thing for the bank to do, but big inefficient banks overlook things.

If the HELOC would stay with the property even after the 1st mortgage was cured, then there's probably nothing to pursue, other than a courtesy call to John since I've already gone this far.

Any chance that US Bank would admit their incompetence and cancel their junior lien, knowing they probably won't get much of anything anyway if it goes to auction?

I found a condo that was sold by 'John' to 'Bob' in 1998. Bob bought the condo subject-to the existing financing. The loan is still in John's name, deed is now in Bob's name. Bob also took out a HELOC on the property in 2002. Now the 1st loan is in foreclosure with the auction in about three months.

Nothing was mailed to John; all notices were mailed to the subject property. I found current contact info for John. The warranty deed says "[Bob] agrees to assume and pay deed of trust dated..." Bob broke that agreement. Does John have any way to take back the property?

Is there any opportunity here for an investor? The condo is worth about $180k as-is and the balance on John's loan is about $100k (about 50% ARV). And if John could get the property back and bring his loan current and sell it to an investor, what would happen to the HELOC on the property in Bob's name?

Cole - why not just put your brother on the loan? If he is a buyer, then it would not be considered a gift, and he could provide the entire down payment.

If he doesn't want his name on the loan, he will have to sign a statement saying "no repayment of this gift is expected."I don't believe it would be mortgage fraud or illegal to repay your brother if he provided the down payment. He just can't make you pay it.

After you close on the house, you could put the deed into a land trust, with you and your brother as beneficiaries at whatever percentages you decide. Land trusts are typically used for estate planning purposes and by law do not activate the "due on sale" clause that will be in the mortgage.

In my county, the assessor's website has photos of every house in the county. The idea crossed my mind of putting photos of the houses I am mailing to on the postcards (mostly pre-foreclosures).

The question is: do you think this would get peoples' attention and cause them to read the postcard, or just freak them out and turn them away?

K., I intended for the spreadsheet to use comparable sales to estimate the value of a subject property, and to get approximately the same answer an appraiser would but with the push of a button instead of a full appraisal.

I disagree, I think it may be possible...but it's not the programming that makes up for the manual and subjective components of a professional appraisal; it's the theory that there is a simple logical reason why someone would pay more for one house than for another.

Appraisers use [seemingly] arbitrary adjustment amounts with the sales comparison approach. Since these amounts are arbitrary, there will be variance in the adjusted prices of the comps, and it is up to the appraiser to use "experience and judgement" to weight the comps and decide on the value of the subject property. This spreadsheet assumes that the adjustment amounts are characteristic of the neighborhood and are inherent in the comparable sales data, negating the need for an individual judgement call.

Dion, you apparently don't see what I'm trying to do. Under the sales comparison approach, you're taking properties that are not exactly the same and adjusting the price to make them the same (i.e. a house with three baths should cost more than a house with two, so if Subject has two baths and Comp 1 has three, all else being equal, you would subtract the value of the extra bath from Comp 1 to determine the price of Subject).

Ideally, you would find comps that are all exactly the same in every aspect that all sold for within $1,000 of each other, and use the average to get an idea of what a property is worth. The examples in the spreadsheet are from a rural community with very few comps. I used my own home as the example; I enjoy rural living, but I don't recommend investing in an area without solid comps.

Thanks for the feedback, J Scott. I realize the comps in the example "are most likely not very good comps for [my] subject property." The example is in a rural mountain area where the comps are few and far between. I also realize that it doesn't make sense to invest in areas where you can't get good comps--the example is my primary residence; I just prefer quiet mountain living.

The Empire State Building comment is funny, but I bet you couldn't get it and two other random buildings to converge with your typical flip using the same adjustment amounts for each. They still have to be in close proximity where the factors are going to weigh on each property equally.

That said, I admit that I am from an engineering background and, call me a nerd, I do enjoy "spreadsheet exercises."

I just put together this spreadsheet for using comps to estimate the value of a potential property.

Have you ever wasted time trying to play around with adjustment amounts to get your comps to all end up around the same adjusted price?

This spreadsheet uses a macro-enabled iteration that changes the adjustment amounts incrementally to minimize the standard deviation among the adjusted comp prices. I've only tried it on one property. Please, try it out and let me know if it works for you!

You can access the spreadsheet using the link below. If you get a yellow bar in Excel when you open it, you must enable macros to use it.

http://www.biggerpockets.com/files/user/twotalents/file/compcalc-10

~Jeremy