Thanks for the comment. Making sure I understand. When you say buyer buys, I assume you mean that the original borrower sells the house, and it closes before the end of the redemption period? My understanding of this is that the second would still be enforceable and the seller would not be able to transfer a clean title until that lien, and any other lien, is released.

So funny. I love these!

Thank you for the comment. I agree that finding these can be challenging. It is tough in our markets too. I think the key is to make a lot of offers and focus on properties that need a lot of work that only investors would buy. What area are you in?

So many great books. Any Biggerpockets book is great. If you are interested in fix and flip this book goes into a ton of detail on the best ways to finance the project. www.amazon.com/dp/B0CMZXBR3Q

Thank you! Crazy how his and my paths crossed again after all these years.

Hello. An important thing to keep in mind is trying to assess what someone else will pay for a property is hard. Because it is an opinion of value, values will vary. Dividing by 5 is simply a rule of thumb that I have noticed is pretty close to what most appraisals will use but it is not a science and appraisers would probably not agree with this. The true way to do this is to asses the neighborhood over time by comparing sold properties of different sizes and trying to get an idea of sq footage value. Even then it is an art because each house will have different aspects that could impact value. I am a little surprised that you noticed such a variance with the size adjustment, but again it is just an opinion. Remember the true value is what someone will pay so I dont see how an appraisal will rob someone of tens of thousands. They could choose not to accept an offer if they dont like the value. Thanks for the comment. I really love hearing what others are seeing and what they are thinking!

@@pinefinancial That was just one example. The list of inconsistencies is too long to even share here. Just another example was the age adjustment. $500 per year from one appraiser vs $200 for the other. Just crazy! The reason I feel sellers are being robbed of value is because you could have someone willing to pay a price but if the appraisal comes in much lower due to their unexplainable methods the deals will die. The process could be very simple but they make it difficult to justify their role in these transactions. It’s as simple as average price per SF and STANDARD adjustments for age, condition, lot size and additional amenities, simple. Comps under 3 months represent the state of the market just fine.

@@hangedman2189 Super valid. I agree with the low appraisal when a property has a willing buyer and willing seller. You cannot do an average price per sq foot however. For example, a 2,000 sq foot home on the same street as a 1,000 sq foot home is not worth twice as much. I agree though that it would be nice to have some standard adjustments, I just dont think it is possible when you are dealing with opinions. The age adjustment example you gave is crazy! Your right, that makes zero sense to me as well!

@@pinefinancial Everyone should find the fact that something as important as the value of real estate, one of the pillars of the economy and the major holder of people’s wealth is based one one person’s “opinion.” As far as a house twice as big not being worth twice as much, I would like to know the reasoning behind that as the adjustments would take care of any other material differences. A standardized system based on square footage will give sellers a top value of their home and the free market will take care of the rest. After all, a home being sold below appraised value doesn’t kill deals, but homes appraised below the contract price kill deals on a daily basis, ignoring the fact that there is a willing buyer and seller. All because of one person’s opinion whose reasoning cannot be explained. Even buyers get hurt when the bank won’t give them a loan due to the opinion of someone who to add insult to injury won’t even discuss their results with the person paying for the appraisal to begin with.

@@hangedman2189 I love the dialog here. I say in classes I teach regularly that real estate is the only commodity that is not a free market. I say that for the exact reason you describe. It is possible for a non party to the transaction to impact the actual value of an asset by his or her opinion. It is crazy to think about. Although I 100% agree on that, I do not agree on your standard adjustment theory. There is just way too many variables and differences in houses to have something like that work.

My understanding is that you would deduct the land value from the $2.5 and use that number as the benchmark for what is needed to invest into the project. If the land alone was worth $500k than would bring your basis in the improvements to $2 million which is what would need to be invested into the project. (Many OZ investments are new construction projects for this reason) Most counties have a land value listed in their assessment so I would probably use that but I am sure you can use other methods to justify the value of the land.

Thank you for the reply. Obviously our experience has been very different but I think the confusion is that I did an electronic transfer from an external account. Sorry if that was not clear int he video. You mention 3 days but that too does not match my experience or their website. What I know about electronic transfers between banks (outside of wires) is they process through the automated clearing house (ACH) which takes up to a day. Those are typically processed over night. According to the Charles Schwab website "If you enrolled in our Electronic Fund Transfer (EFT) service, your Schwab Bank deposits are subject to a four-business-day hold and you may not withdraw pending funds during the holding period." Combine 1 day to clear, 4 day hold, and a weekend and the math is a week. Again this was only my experience so it sounds like yours has been much better. Thanks again for the comment.

Thank you!

Thank you for the spam message. : )

Thank you! Randy is great!

I am not sure how I missed this comment. Sorry about that! Those are the price per foot the properties sold for.

@@pinefinancial Thank you Kevin. I thought so, but wanted clarification

Great question. It is very rare you will see land size adjustments. It is possible with a double lot that can be split off or something but still rare. What you might see is lot adjustments for premium lots. Think lake frontage, walk out basements, or views. Otherwise don’t count on any value for land sq footage. As far as the home, you would see an adjustment for livable sq feet. Even if the layout is not ideal. The footprint (how it sits on the lot) will not matter however.

I am not sure that I completely understand your question but I would never use a radius when locating comps. You only need three or four and you want the best three or four. In your scenario, I would look for comps that have a similar influence of the commercial properties. Industrial tends to hurt value more than other commercial uses. If you cannot locate any with similar influences, you will be guessing on your adjustment. You may be able to use historical and see what houses with that influence sold for in comparison to other properties. Appraisers will typically try to support their adjustment in this way. Your search area should never be a circle. When you do that, you will capture comps that may be in different neighborhoods, that are much newer, crossing major arterial roads, or like this example, comps that do not face a commercial building. Hope this helps!

@@pinefinancialThank you. That makes sense.

This is amazing! It sounds like you have this figured out. Do you find the extra management effort worth the added income?

@@pinefinancial 100%, i spend about 5 hours a month managing the 4 rental properties. Sometimes more if things break haha I actually built out an app to help me manage my properties that I am working on releasing to the general public in the upcoming weeks

@@pinefinancial 100%! I developed an app to help me manage my room rentals that I am just about to launch to the general public - specifically catered to rent-by-room landlords I usually spend about 5 hours per month managing all the properties - sometimes more if something breaks haha

That was weird, thanks for the heads up!

You are right. We should have increased the size of the chart. We are obviously much better real estate investors than polished KZbinrs. Thanks for the comment. It gives us something for us to improve on.

Thank you for the comment!

Thank you Dan!

@@pinefinancial 🙏

Nope. Not illegal, just capped. $35 per month or 1.5% of the monthly rent, whichever is greater.

Hi Mike. Government makes it too hard to lend out there so we have elected to stay out of California.

This guy can help. www.ipx1031.com/locations/name/tracey-wilson-ces/

Thank you Linda!

Thanks Dan. I agree, Zach is great!

Thank you. I think it is good to do these with Joe so we will put one of these quick updates out once a quarter.

Thanks for the comment. This is obviously super relevant. Boomers is the largest co-hort of homeowners so this will no doubt have an impact. The problem is this is not large enough to solve the inventory problem. Even if every boomer sales their home and does not buy another, we would still be considered a low inventory environment. This will also be offset to some extent by the number of Millennials that want to buy a first home but wont with the high rates. This is a great comment though and your right, it is something we should consider.

Thanks for coming on. I too really enjoyed it!!

Thank you.