All Forum Posts by: Tyler Haskell

Thanks for all the replies, very good advice on ways to improve this process.

Does anyone have any suggestions for appraisals on properties that basically have no real comps around them?

I have 3 duplexes in an A neighborhood with nothing around but single family homes. Appraisal came in at our purchase price exactly (imagine that). 

Any tips for how to persuade this number up besides the standard "I put this much in on rehab so i think its really worth this!"

Erik Martin Rehab can be complicated. Especially if you run it out of state. Over time and with experience you will be able to look at a destroyed house and at least fairly accurately guess the cosmetic rehab for the house. That being said, there are frequently unseen problems, and inspections/GCs are the way to find them. I suggest establishing a relationship with a knowledgeable general contractor, and have him estimate rehab for you. I would also note that it is important not to waste a contractors time by asking him to give you repair estimates for properties you do not own yet. Once or twice may be fine. However these are busy professionals and it takes a lot of time to prepare a proper rehab estimate!

Steve K. Wonderful insight thank you! If I run into this similar situation I will be sure to write some strongly worded letters and submit my evidence. I am glad to hear anyone's strategy on how they are able to overcome this Human element in the process.

Jacob Murphy Thanks for this feedback, glad I'm not the only one! I never thought of tracking down the appraisal company from the bank on the FRONT end and trying to beat the problems before they start, great advice and I will check into that. I invest out of state so I also have less of an ability to meet people on site etc, but I'm sure I can find someone to do it for me.

Does anyone else see the same major flaw of the mystical BRRR strategy? At the end of the day, arguably the most important element or phase of the BRRR process is the refinance to get your exit money. And the appraisal from the lender of your choice is the single event that tells you whether you successfully complete the BRRR. Along every other step of the journey YOU have control. You research the ARV of the property, you project the rehab costs, you pull comps, you negotiate purchase price, you oversee repairs, you rent it out, and then likely, you wait for your purchase to season and then initiate the refi and hope to get your cash back (assuming you purchased with someone else's money, otherwise it's immediate). This is where suddenly the control and your fate is pulled away from you and put in the hands of an appraiser. These appraisers are most likely not investors, and most do not even understand the concept of buying discount properties. So while I prepare a nice packet for them with my rehab, how I acquired it discounted, and what I think it's worth, at the end of the day you have to hope that they will agree, other wise your coming up with the difference in the 75% LTV. I understand you can order a re appraisal and try to get it fixed, but at the end of the day this is still a wild variable that you really cannot control, only influence to the best of your ability. And the experience will be different every time! Anyways, I do it, I still think it's one of the best investing strategies out there, but i wanted to see if anyone shared the same nerves I get when ordering these appraisals for a refinance!

I can make it July 13th, looking forward to it!

Great thread on Sub-To. (Until the flame war started!) I had a chance to acquire a sub to property and chose not to, what a fool I must be for doing that right. Aside from Jay's points about not having deep pockets to cover if something went wrong, I really believe it is misleading to hear people say a bank has "no incentive" to call the due on sale clause. Let's think about the banks motivations for a minute (and I am no expert this is just my opinion). 2010-now banks had so many bad mortgages, foreclosures and other disasters to clean up tracking down sub to transactions was not a priority. Plus interest rates went DOWN and stayed down. Now in 2017 and beyond, interest rates are going UP. So why would a bank call the due on sale clause.....because they can likely get a 3.25% mortgage and convert it up to a 4.5% mortgage and soon higher than that. Banks like money last I checked, so calling due an old mortgage with a high interest rate to swap to a 3.25% makes zero sense, but now we will see interest rates rising and that will be reversed. This is only my lowly opinion as to why I believe banks will begin actively hunting down and calling due sub to deals with more frequency. Would love to hear any holes in my logic and counterpoints!

@James Masotti

Really great information James thank you! I have started the search for this type of lender and plan to present my strategy to them. 

@Chris Mason thanks for the input. I think I'm trying to avoid hml for the long term loans, but I'll look around for sure.

@James Masotti okay so we need to look really hard for portfolio lender or a lender who will do this with an LLC and your saying either way it will be commercial. I always understood commercial lending to be friendlier, but it seems I was mistaken. The fact that you are getting 70% with no seasoning is encouraging. Thanks for your response!

I have had some great success in Indy and I live in Sacramento. I have quite a few out there now and even though I learned some lessons it's going well after two years. 100% most important thing for an OOS is finding the right management company. I would know I was with a terrible one for way too long and it cost me quite a bit. Your on the right track having gone and toured the city for yourself before jumping in. Keep making connections and setting up your network. Just understand what you can and cannot control being so far away. Good luck and happy investing!