Real Estate Investing Coaching - Brian Gibbons

Pricing Your New York Home Right  by Ray Mannion

I'll tell you how to sell a house fast: lower the price" - so says Andy Rooney of CBS 60 minutes. While Andy Rooney's  quick answer observations are often amusing and enlightening, this one is sure not to please people who need to sell a home fast.

 

"Pricing a home needs to be done correctly, " informs investor Patrick Koltz in upstate New York. "Real estate agents get paid a percentage of the sale price so they would prefer it to sell as high as possible. They would rather leave it on the market for a long time at a higher price in the hopes that they can drive market prices upward and eventually make out better than if they had priced it accurately and moved it quickly."

 

One tool sellers can rely upon is a certified appraisal. In New York State, home prices can be researched by a licensed appraiser who has access to a number of resources. They get paid to place a dollar value on a home. Furthermore, they are independent and don't care what you think or how you feel about the number. They do their research and use a state approved formula and method to arrive at a predictable value of your home.

 

Do you really need to invest $300-$500 in an appraisal? "Not if you know your neighborhood pretty well and can do your own research," says Ray Mannion, partner of New York Comparables.

His website reports sales data for New York Real Estate transactions including residential, commercial, agricultural or any real property sales period. "If you've seen 4 or 5 houses in your neighborhood sell in the past year, you can simply find out how much they sold for and then do a comparison to your own home.

Mannion's website www.NewYorkComparables.com charges a tiny $4.99 for a one day pass to research property sales in New York State. This means you can do your own appraising for a fraction of the cost of an appraisal. Searching by tax map, street name, city, municipality, and date range or price range allows the user to get a good sense of what actually has sold

Real Estate Investors, real estate agents, and mortgage professionals also use the site for discounted monthly or annual subscriptions.

 

"Often times, people see their neighbor's house come on the market for $298,000 and they say, 'gee my house must be worth that too", says Mannion.

"What they don't see is that it sat for 3 months and then was lowered to $274,000 and eventually sold for $260,000.

"That's why accurate information reported to the county clerk is the only true reliable source of information for assessing the value of your New York home.  And www.NewYorkComparables.com helps you get that info."

About the Author

www.NewYorkComparables.com was founded by Ray Mannion and Hope Motreuil out of their own frustration at the lack of information available to real estate investors. The site reports sales transactions in New York State as recent as 3 months and is one of the most current sources of Home Sold Prices on the internet.

Pros and Cons of the Quick Deal-even with a friend

                                       

Posted by: admin, in Options,  Financing                                

Today I got a call from a person with whom I’ve done a lot of very profitable business over the years.  He wanted a 5-figure sum of money to close an Option on a large parcel of land for which he had just received sub-division approval.  His Option was going to run out in 24 hours. He was willing to give me a 20% participation interest if I’d put up all the money . . . within 24 hours.

I’d done similar deals with him over the years and I knew that he knew his business, and would repay me.  On the other hand, everything had to be done at flank speed.  Without time for bureaucrats to take weeks to prepare paperwork, I had to resort to exhuming documents from prior deals, adjusting them to fit the current situation, and FAXing them to the closing attorney together with escrow instructions to insure that my interests would be protected.  I also had to round up the funds, which meant liquidating some accounts and transferring money into escrow clear across country.

Because I was willing to move quickly, and because we had had profitable arrangements in the past, this went fairly smoothly and I was able to earn a very high return on a large sum of money.

That was yesterday.  Today, I was propositioned to buy a mobile home park that was in foreclosure and had some title problems.  No doubt it was a real bargain, but I declined.  Why?  Because the problems that made the park a good deal would require months of legal action to resolve.  That was the reason for the deal.  Another party wanted a fast loan with which to pay the down payment on a really good deal. Another deal had fallen through and he was willing to pay a very high rate of interest.  The down side was that I didn’t know him, didn’t know the property, and didn’t know how he expected to make his payments if he couldn’t come up with a 5% down payment.  Moreover, I would be in second position behind a very large sum of money.  Again, I bowed out.

The lesson here is that, when you are dealing with people and property you have had past favorable experiences with, you can cut some corners in order to react swiftly; but when there is any element of doubt, you’re better served to let some of these really good deals go by and let someone else take them, and the risks they carry with them.

How to Analyze Any Property in Less Than One Minute Flat!

   

    Date: Tuesday, May 08, 2007 @ 04:26 PM EDT
Topic: Managing

       

How many times have you seen a run down vacant property and thought to yourself... that would be a good investment? You see it for several weeks or months and do nothing about it and all of the sudden you see someone is now rehabbing it and you see a “for sale” or “for rent” sign in the yard. Then you say to yourself... “I knew that would be a good investment! Darn, I missed that one”! You just weren’t sure how much you should offer and how much profit you should allow before making an offer.

Well, I want to take the next few minutes explaining exactly how much profit you should allow whether you

     are buying a fixer upper or buying a property that is already rented or ready to rent or sell.

The bad news here is that there are as many different ways to analyze a deal, as there are ways to put a deal together. There is software programs that you can purchase that will calculate your internal rate of return every year from now until the property is ultimately paid off and beyond. There are spread sheets that you can buy to do the same thing and you can even design your own. You can use a calculator or a simple pen and paper method. My point is that no matter what system you use the most important thing I can share with you is a simple computer term called “garbage in – garbage out” It doesn’t do any good to have the most complicated software program if you don’t know what kinds of margins you need or if you don’t know your repair cost and closing cost. You have to know what numbers to enter into your calculations to get the right answer.

I’m going to butt heads with a few people here but I am very much a big picture person. I don’t use all of those fancy calculations when I’m buying. I basically need to ask the seller or realtor a few specific questions and then I can make an offer on the spot before we ever get off the phone. Is that great or what? This is why I can buy 10-15 houses every month on a consistent basis.

Here are a couple of hard and fast rules of thumb. And I want you to keep in mind that they are just what I said... rules of thumb. The first rule of thumb when analyzing a deal is very simple: “If you need a calculator, it’s probably not a deal”. Let me explain. If you can look at a deal, knowing the after repaired value, the repair cost and how much they are asking then you should be able to tell whether or not it is worth pursuing. If the profit numbers are so close that you have to figure it on the calculator then you probably need to say “NEXT” and move on to the next property, after making your low ball offer of course.

Let me mention here that it is extremely important that your deals are home runs, especially your first few. That is the critical stage in your investing career that will make you stay in or get out.

The next rule of thumb is also very simple. “If you have to ask someone if it’s a deal it probably isn’t”. Lets face it, you have at least read some books, been to a seminar or two, taken an investor to lunch, listened to a teleconference or training audio or something. You know what to do for the most part. YOU can tell whether it’s a deal or not so if you have to ask someone then it probably isn’t.

Now, how do we put all this stuff to use? As I mentioned I only need to ask a few specific questions before making my first offer right over the phone. Here is what I need to know before making an offer. I need to know the after repaired value, the amount of repairs and closing cost and that’s it. And if it is a rental property then I want to know the rent or potential rent. Sure I will eventually find out more information but we are talking about getting our offer out there on the first call.

I know what your asking...How much should I pay. This is very simple. If you are looking at a fixer upper then you don’t want to have any more than 70% of after repaired value invested and this includes the purchase price, repair cost and closing cost. Keeping a margin of 30% insures that when you are finished making the necessary repairs, after closing cost you will still have 30% equity. Then you can sell it, refinance it and pull out some cash on a refinance or you can lease option the property.

Now, if you are looking at what I call an “instant landlord” property then you can pay a little more than 70% of value. After all there are no repairs to do on your part. My rule is not to pay anymore than 80% of value and maybe 85% of value if the cash flow is good and there is good possibility of appreciation.

I hope this article has helped you to determine how much you should offer for a property... FAST!

Larry H. Goins is not only licensed as a mortgage lender and mortgage broker in North Carolina and South Carolina, he is also licensed in both North Carolina and South Carolina as a Real Estate Broker and General Contractor. He is a member of the North Carolina Association of Mortgage Professionals and a member of the National Association of Mortgage Professionals.