All Forum Posts by: William C.

That's the craziest thing iv ever heard. I always give comps . Some appraisers ASK me for comps. And the thank me after I have done so. You got a weird appraiser by some dumb luck and took your email as a "forceful way of making him use the comps"" id demand refund and another appraiser to come out. You did nothing out of line. The information you provided Him is public info and in no way shape or from illegal to do.

A broker will have many options, but may charge a brokers fee. Iv been told the brokers fee is paid by the lending bank so it's a wash for you the borrower. A bank is going to be limited in the products they offer. For example TD bank can only give you TD bank loans, and won't be able to outside the box. A direct lender is kind of a hybrid of both. They lend money directly from their own fund, but can offer a range of products, but not as large as a broker who has different lenders to chose from. It kind of depends on what you are looking for. If you are in fact looking for a conventional loan, then all 3 shoud be able to meet your needs. I'd be curious to see exactly what the 1100-1300 fee you are talking about is. Almost all "lenders" will charge an "origination" fee, "application fee" or something along those lines. Most junk fees are negotiable. If you find a lender you like and want to use but they are charging $1000 the other guy isn't. Tell them, they probably find a way to waive it. Rate is a whole different story. As mentioned before you can get a different rate depending on a whole slew of things. Points, credit score, down payment, etc. the lowest rate doesn't always mean the best deal. I can get you a 3% rate if you want it, you just have to pay for it up front. Same goes the other way. You could take a 5% rate and he lender would actually pay you money to take it. Rates are affected daily. Don't get caught up shopping rates around. You should be able to get similar rates everywhere as long as your comparing apples to apples.

I think you were under the wrong impression then.  Everyone is running around in circles trying to answer a question with no answer.

Find your own rules, follow them, and you'll ensure you are able to pull all of your cash out of your deals using the BRRRR method. The 70% rule is def not the answer. All banks are different, all deals are different. Make our own rules.

Great work. You are crushing through your goals. Are you tapping normal banks for the Refis? Are they under both you and your cousin? Where I'm going with this is will you eventually run into a road block on the refis when you reach a certain number of them? I imagine a good relationship with a portfolio lender would keep the deals flowing, you might just see smaller LTVs and shorter amortizations. Best of luck.

Originally posted by @Rodney Marcantel:

Originally posted by @Scott W.:

the only issue with that is you have to hope the home appraises.  it worked out for you but some appraisers just go off the most recent sold comps.

 Then they are not good appraisers. If it does come off under the sold price AND if the buyers aren't willing to cover the difference, then I'll get my agent to have the house appraised with their trusted appraiser.

I am not trying to be negative Nancy and rain on your success parade. I don't want any of this bad stuff to happen, all I'm saying is it could and it has to me. I do have to point out that your plan to have your agents appraiser come in after the fact will simply not do anything. First, I think you mentioned the buyers went FHA. If that's the case, the appraisal done by their lender will be the appraisal that sticks to the house for the next 6 months no matter what. FHA appraisals are property specific and if those buyers can't close, the next buyer to come along FHA would have to use the same appraisal, for up to 6, months. Second, if the buyers are not FHA, it's irrelevant what any other appraiser says, it's the banks appraiser that matters, and if they come in low, there is nothing that can be done to change the course of that deal (aside from an appeal).

The point you made about your market appraising higher was a good one.  I do hope your fine.  $50k seemed like a big bridge to cross for the comps you mentioned that sold recently.   

Justin Leithem awesome, thanks.

Rodney Marcantel thanks for the clarity. You quoted the insurance at $2k, that's where I got the figure, you just didn't have anything in the "actual" column. Regarding the appraisal....the comps sold for 180-190k with similar sq ft? Yikes. I truly mean it when it say good luck,I hope for the best and that it appraises for what you need. In my experience appraisers don't differentiate from "brand new" like yours, and the comp down the street that was remodeled 10 years ago. Unless its extremely dated, or falling apart, they are both usually a labeled C3 in the eyes of the appraiser and therefore appraise for the same amount. Even if you are a C2 and they are a C3, the adjustment is typically $20k. Your $50k over the nearest comp? There is no adjustment for "new kitchen" or new bath. Its line for line, sq ft, beds, baths, etc, etc....I'm probably wrong and it'll appraise just fine. I'm on your side. I feel if a buyer is willing to pay X, then adjust accordingly and appraise it for X. Unfortunately for me I've been burnt too many times that I never assume it's appraise any higher no matter how much nicer it is compared to the comps.

David Grabiner you took the words out of my mouth. I will eco what he said. While you have a great deal in your hands, and you did an awesome job adding value and raising the rents, your Net income is not quite as high as reflected in your numbers. Just add the 4 items mentioned above and you'll have your number. It's better to plan for repairs and maintenance then all Of the sudden have to pay for a roof out of pocket. That alone could turn you 45% annual coc return to 0.

I don't know that there is an actual answer to your question. Whoever invented the "70%" rule decided to do it that way. That doesn't make it right or wrong, it's just the way that "rule" is calculated. You could calculate YOUR own MAO the way you mentioned and it could you YOUR "70%" rule. Everyone else can have be other one. I guess what I'm trying to say is the "70% rule" isn't a real thing, it's a made up rule of thumb that some people use to evaluate properties. It's should actually be called the "70% of ARV minus costs rule". There is also the "ARV minus costs multiplied by 70% rule". The example above that explains trying to recoup your costs at 70% LTV is probably the best way to look at it, but it still isn't necessarily the reason Why it's fingered that way.

I personally think becoming licensed would be the easiest step in starting this business. Does anyone else agree? As a licensed agent, it took me a few months and a few hundred dollars to get my license. Chances are you could find some discount broker to hang your license. With that said, creating a client base of landlords would be the lifeblood of your business, and something like this could take years to do. Years to create the relationships, years to gain the experience years to gain knowledge needed to be good at it. I read your post because I too have thought about staring a property management business. Iv been selling real estate for 7 years, own and manage my own rental properties, and I am still not exactly sure where I would turn to build a large landlord client base. Don't get me wrong, there is an opportunity, most agents turn away rentals because of the hassle, inexperience, and lack of commission check, but again you only business model it might be a struggle to get up and going. Best of luck if you decide to continue to pursue the business though.