I Am Jumping Into REI Need Some Advice
Hi Guys, I am out of In and I have a poetential deal to get me started and get some cashflow comig in right away. I have partnered up with another area investor(s) That flip houses to other REI's. They will put in the initial tenenats ( Subject to my approval), pay for the closing costs on the homes (5-7 in all) and will take care of maintenance for the first two months. My questions is this, Is it kosher for them to use an appraiser that they have worked with qute a bit for the loans on the houses or should I get them appraised independantly? are there appraiser credentials that I should ask or first? Also is it ok to ask to talk to some of the other REI's that they have worked with in the past to see thier track record?
Thanks
ALWAYS do your due diligence! It's your money, credit, liability...so you need to make sure you check everything out before getting into a deal with anyone. I know a few new and old investors who get scammed into over-inflated properties, illegal home conversions, etc. If you have never worked with these group of people before, then check them out for anything that may seem a little "too good to be true." If it seems a little fishy, then don't do the deal. Remember, it's your money on the line...
Tanya
The fact that you have posted this question here leads me to believe you have doubts about the situation. I always go with my gut. Do your due diligence and get some more information before you jump off a cliff. It could mean the difference between a good parachute and one full of holes. I know which one I want when I jump.
It isn't so much that I am having doubts about the investores. They seem like good people and I have talked to them at lenght. They are also happy to help me get started flipping/rehabbing to get some real life experience. I just don't want to getinto an illegal flipping thing since I haven't done this before.
tanya 1215,
Could you elaborate a little more on the details that comprise an "illegal home conversion" ? I am a newbie and would like to know what to watch for.
Thanks in advance,
Barb
Joe:
Listen to Tanya. Run your own comps!
When you have been in this business, it is not hard to get the appraisal you need.
That is why all the lenders these days are doing appraisal reviews.
I could get me doghouse appraised at
$1,000,000! Do your own homework.
I dont need an appraiser to tell me what I a property is worth, take a look at what other properties sold for in the area and see what is on the market currently and make your decision based on that.
Best Riches,
Jeffrey Adam
[addsig]
Barb, basicaly what I am talking about is illegal flipping. Where the appraiser and rehabber or seller are in colusion to inflate the price of the house above what the real market value is. I think that it can also invole the lender being in on it too. Please correct me if I am worng everyone