Chung,
My apologies for not getting back to you sooner, as I was away for the Thanksgiving long weekend. I hope you enjoyed your weekend?
Here are some answers to your questions;
1. The ARV (After Repair Value) can be obtained by doing the following; the script requires you to ask the seller what they think their property is worth. You should also note that the other (critical) question you will need to ask them is "how they came up with that number"?
This is a critical piece of information, because depending on what they tell you, you may or may not need to perform a lot more due-diligence at this particular stage. For instance, if the seller tells you that they just had a "certified" appraisal performed, you could take the value they give you as "somewhat" accurate. Now if their number is based on a "City Tax Assessment", you would need to know if the tax assessments in that particular area are typically on the "high" or "low" side. If you don`t know, then you would need to perform more due-diligence before you would be in a position to accept their opinion of what the property is worth.
Your next step is to flush out what repairs are required and what the overall condition of the property is. It is "vitally" important that you understand what additional work the property may need. Note: at this particular stage in the "information gathering" process, you are ONLY gathering information to see if there is a reason "WHY" you may or may not want to obtain more information or consider purchasing this particular property. Let me put it into perspective for you; I NEVER leave my office chair and go look at a property, unless there is a "COMPELLING" reason for me to do so! If I jumped into my car and drove to each and every property that I collected information on, there would NOT be enough time in the day.
So my recommendation to you is...DON`T DO IT!
So let`s re-cap; the "ARV" is calculated by adding the "estimated" repairs to the purchase (what the seller is willing to sell you the house for) price of the property. You should pretty much be able to do ALL of that from your office chair. I do have one Caveat though; if you decide to move forward based on the information you have collected, you would obviously need to verify what you have been told.
Tony`s TIP: NEVER trust what you have been told...ALWAYS verify!
2. I typically "STAY AWAY" from "mobile" or "modular" homes, as I personally classify them as "depreciating" liabilities, and NOT "appreciating" assets. Now with that said, I once purchased a "modular" home that was situated on its own lot in Fort McMurray. It cash flowed $1,650.00 per month. I got in for $18k cash to mortgage. I sold the unit to a Tenant/Buyer on a Lease Purchase contract two years after I purchased it. I made $165k in profit, plus $39,600 in cash flow, plus mortgage pay down. So as you can see, they can be a good investment, but it will ultimately depend on any number of scenarios.
Tony`s TIP: STAY AWAY from "mobile" or "modular" homes that are on sitting on "RENTED" lots!
3. There are "many" factors that you will need to consider. Some of which, but are not limited to the following; travel distance from your home base to the property, long term economic outlook for the city or town the property is located, what is your "back door" (exit strategy)?
I hope that my answers to your questions are of assistance to you?
I will forward copies of my scripts to you under separate e-mail cover.
/>All the best! Tony Peters
QUOTE (ctang @ Oct 10 2009, 09:44 PM) Hi Tony,
I`ve just finished studying the 17 discs in preparation for Ron LeGrand`s bootcamp on Oct 15-18 and now I`m calling FSBO`s using Ron`s Lead/Property Information Sheet. I`ve called 8 FSBO`s of which 6 gave me their mortgage information. However, I do not have the ARV or appraised value for any of the FSBOs as they do not know that information. How can I find that out? I know ARV is a critical fact that I`ll need to pre-screen so what do I need to do to find this information?
2. Because I`ve listed on Kijiji that "I Buy Houses, Pay cash" I`ve had a hand full of people email me telling me that they have mobile/mini homes for sale only but it does not include the land/property (they pay rent for the property and they don`t own it). Should I bother dealing with these folks that not only have these tiny houses for sale but no property?
3. I live in Halifax, Nova Scotia and there are some very rural places. What is the location criteria that I should use to determine if the house/FSBO is a suspect or prospect based on the location of the property?
lastly, if possible, I would love to use your scripts to better pre-screen these FSBOs. My email is chung.tang@hotmail.com
Thanks and look forward to hearing from you.
Chung Tang
