Steve Maloney, VP of acquisitions, walks through how the team evaluates properties for purchase. They start by asking sellers what they want, pull comparable sales by era and square footage, estimate renovation costs to hit their signature product, and confirm the property's actual condition in person. Vacant properties use lockboxes; occupied ones need scheduled access.
Hi, guys. Welcome back to another episode on our Freedom vlog. Today I'm here with Steve Maloney. He is our VP of acquisitions and renovations. Today we're going to be talking about how to assess properties when you are trying to acquire them. Do you have anything to say before we get started? Are you ready?
Yeah, yeah. You forgot that I was your commercial.
Oh, yes.
Important positions.
Oh, yeah. We have a little bit of some stardom in that mix as well with the commercial. Absolutely. I'll have to put a little link to that so you guys can check that out.
Put that on my business card, too.
That's actually not a bad idea. All right, so the first question, when you are looking at property, where do you start?
Yeah. So usually those properties come into us or we're digging through some information to find them, and at that point we're having a conversation with the seller. Pretty much like the first starting point is, hey, what are you, what are you expecting? What's your expectations on what you would like to get for this property?
Okay.
From there then we're going to do our due diligence and look at some surrounding comps and then just kind of work the numbers, you know, and there's a lot more variables that go involved. But that I would say is the starting point.
Okay.
What do you expect? And then what can we say that this property is going to be worth once we put our spin on it?
Okay, now you said comps. Do you care to explain what comps are real quick?
Sure. Like comparable properties. So we're looking at things that are built in the same time era, same bedroom count, within some exceptions on the square footage. And obviously the same style of house too. You know, you can't really comp a two story with the ranch. You know, they're just not. That's. It's just what appraisers would do. We tried to kind of mimic and mirror what they would do, and that's how we pull our comparables.
Perfect. So now when you get to the property, what kind of things are you looking for?
Well, we usually. Let's back up a step. So, okay, from that point, we're going to dig into what we think our renovation estimate is that's going to make the property be our signature series property. So we have a product that we put out after renovation to do that. We're going to come up with our best guess. And then if the numbers work for us as a company, that's when we will go out and set up that walk. During that walk, what we're looking for is just the property conditions. So typically, that's you calling in, me gathering information from you, and then me saying, hey, all right, this looks like it could be a potential deal for us. We may be able to get you what you want, but we need to go out and confirm the condition of the property. So once we're out there, we're just looking to confirm everything you told me. So it doesn't do you any good to tell me, hey, yeah, that roof's brand new, and I go out and there's a hole in it.
Right.
So things like that is what we're looking at.
Okay, cool. So now the last question. We'll dive into this a lot further in the podcast. So you definitely want to check that out on Real Talk, available on all platforms and YouTube, make sure you're subscribed. But so you're going to the property, what do you do if the property is occupied or vacant? How do you get access?
Okay, so again, I'd set that up with you as the seller. Obviously, if they're vacant, usually they'll have a lockbox on them and we're able to just go in. That's not an issue. The issue becomes when they are occupied, especially if it was an investment opportunity for you and you had a renter in there, it's a little bit easier when it's owner occupied because you're just like, hey, yeah, I'm available at this time. And we'll try to set that up and be accommodating. When we have a renter involved is where it gets a little bit hairy, because now you are trying to coordinate with your renter to make sure you're giving them the proper notice to set that up, and then we are aligning our schedules with that. So we're trying to do that. A lot of times, though, we'll get to that point, and then that renter will call you and say, hey, so sorry I'm not available. Something's come up today. Right. Normally, they understand that this could be a moving situation for them, which makes it a little more difficult to get into the property.
Okay, perfect. All right, well, I appreciate all that information. I'm excited to dive into it a little more on the podcast.
Me too.
But for now, we always like to end these with invest smart, live happy. Bye, guys.
Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss.
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