"Brain Pick a Pro" Interview with Appraiser Brad Kroll


Larry: Welcome to the Wednesday Night Brain Pick a Pro Teleconference live from Lake Wylie, South Carolina and Charlotte, North Carolina. Special guest tonight good, long time, business Associate. We do a lot of business together and continuing our Building Your Dream Team a very, very key person as an Investor in building your dream team is an Appraiser. I am very proud to have a very experienced Appraiser, Investor and Business Associate, Brad Kroll. Welcome Brad.

Brad: Thanks Larry. Good Evening. Thanks for having me.

Larry: How are your doing?

Brad: I am doing well.

Larry: Good, good. How many Appraisals did you do today?

Brad: I try to do two a day.

Larry: That is strong, ten a week. Man, that is strong. You stay really busy, don’t you?

Brad: I have been fortunate, it goes up and down depending on the markets and what is going on. It has been pretty steady for a number of years now.

Larry: We have been working together for a long time now. We do quite a bit together. Why don’t you start out and tell people a little bit about yourself and your background.

Brad: Sure, Larry. I have been an Appraising Residential Real Estate since 1991. It has been full time since that time and I am based out of Charlotte, North Carolina and we cover the market here and than a County out in each direction. Which is normally the way Appraisers work. I specialize in Residential property.

Larry: How did you get into Appraising?

Brad: Well, it has been a second career for me.

Larry: Oh really? I didn’t know that.

Brad: Yes, I have an Engineering Degree from the University of Illinois. Worked in that and corporate sales. My Basketball team is playing right, so you know what kind of sacrifice I am making here.

Larry: I hear you man; and I really appreciate that!

Brad: I worked for Corporate American for ten-twelve years. I always had an interest in Real Estate and started taking Appraising Courses, maybe thought I was going to do some Investing like a lot of your people do. Found out an Appraiser was a good job, it was good fit for me. I took all the courses and then became a trainee and found I liked it and I could make a good living at it, so I have been doing it ever since.

Larry: That is great. That is really good and it was a second career for you. I didn’t know that. Wow! You mentioned that you are based in Charlotte and you go out about one County. Why would an Appraiser only want to go in areas that they are close to?

Brad: You have to develop knowledge in your market. We are there to interpret data, but you have to keep up with the economy in the market area that you go to, it is important to do a proper evaluation. But also you have to drive to these properties; and time is money. We cannot be driving an hour and a half to two hours to go look at a property and then all the way back. You just cannot do enough of them that way. Then you don’t know the market there. So fortunately, living in a major metropolitan area like Charlotte, most of the housing density is around this area, so you have plenty of work, once your are established, just in that area. Most Lenders deal in a localized basis as well and that is where we get most of our business through the financial institutions, through their clients and people who apply for loans and things. It kind of works you can basically serve what their client needs are as well.

Larry: Exactly. I guess there is a lot to be said for you have to know you market as you mentioned. I am sure it would be tough for you to go down and do an Appraisal cold, say in Columbia or in Spartanburg. There are things about certain areas and neighborhoods and cities and officials and growth that is going on that if you came in from out of town couple of hours away, that you may not be familiar with.

Brad: Right.

Larry: Let’s just start with the basics. Most people talk about market value, define what is market value according to an Appraiser?

Brad: Well, Larry, market value is what the conclusion that we are trying to reach in the Appraisal Report. The definition of market value essentially is what is the most likely sales price for the property if it was marketed say with the Realtors sign up or if it got full exposure to the marketplace. What would a knowledgeable Buyer and a willing Seller most likely arrive at as the sale price? Now this is still an estimate of the value, because the property is not really being sold. So there is kind of a range there and you are supposed to pick kind of in the middle of that range and try to be fair about that. So it is not what it might sell for, or on the other end be too conservative, it is supposed to be what is the most likely sales price with full exposure to the market, what would this property sell for, in its current condition, generally speaking.

Larry: Right. If it wasn’t for sale, it hasn’t sold. Is there a difference between doing an Appraisal for a Bank for a re-finance versus for a purchase?

Brad: The mechanics are basically the same. They should be. Because you are still estimating, if you look at the URAR Form, it says what is the conclusion, which is what most people flip to at the very end and look at the pictures. the Lender will look at the pictures and then the conclusion.

Larry: Page two, the bottom right.

Brad: The Lenders will look at the pictures and then the conclusion and if you look at that line, it is what is market value. Market value for re-finance is really, should be the same as Market Value for a purchase.

Larry: A lot of people want to know, do you need or want a copy of that Sales Contract if the property is being sold to help determine your Appraisal?

Brad: We are not to be influenced by that. That being said; but we do have to have that because there is essential information that goes into the Appraisal Report that has to be listed. The sales price has to be listed, any Seller concessions and the date of it has to be listed and then we have to discuss our conclusions, have to be reconciled to that Sales Contract. Does it support that value, do we think it is worth more than that value, which can be the case.

Larry: Especially working with Investors, right.

Brad: Yes, because you should be buying, Investors buy at the low market value. There are opportunities there.

Larry: Estate Sales, Banks, Foreclosures Sales, that sort of thing.

Brad: Right. We also have to disclose, within the last three years, any other subject sales. We have to kind of analyze that little chain of what has happened; and that particularly gets fairly complicated with Investor properties and distress properties were there has been a Bank Foreclosure or some sort of situation that created the situation and we have to disclose all of that.

Larry: How far back do you have to go?

Brad: Right now it is three years.

Larry: You have to go back three years if the property has changed hands three times you have to list all three transactions?

Brad: Exactly. If it has changed ten times in those three years, it all has to be listed. That is full disclosure and we are mandated by Federal Law to do that.

Larry: Wow! You guys have to do a lot of research when you do an Appraisal.

Brad: Interestingly, now there are some new guidelines coming out and you will see them here this summer, now the comparable sales have to analyzed, the same way back three years.

Larry: The comparable sales do?

Brad: Comparables as well.

Larry: Here is the key question everybody wants to know. What is that going to the price of an Appraisal? So now you not only have to go back with one your have to go back with four.

Brad: Unfortunately, the prices will stay the same. We are asked more, well the price for an Appraisal really has not changed much since I started doing it in 1991. But we are doing more and more work and more and more goes into it; however, at the same time we are becoming more efficient, much more automated than we were before, so it works out kind of a wash in that respect. What the Lender will be willing to pay and unfortunately, many Lenders consider an Appraisal a commodity and commodities are whatever the price is. If I try to raise my price, by $50. Someone else won’t and then we won’t get the business so we end up having to hold your line on the prices. Normally you are not going to have a lot sales activity with your three comparable sales; but again, that was Investors property and that is what our audience is and the work I do for you guys. Sometimes that is going to be the case even on your comparables and so there is going to be a whole lot of disclosures going on there.

Larry: Now you mentioned a minute ago about Market Value. How does an Appraiser go about in determining Market Value?

Brad: Well, basically we look at closed sales in the past twelve months of similar homes in that neighborhood and that is what you start with. You start with a home that is of similar age, similar square footage, hopefully right in what we will call a subdivision or a neighborhood. These typically are MLS (Multiple Listing Data sheets) that are available, of course, to us through subscribing. They are not necessarily private sales because those then get exposed to the market and they can be high, they can be low, they can be anything. We don’t typically use private sales because we do not have the information about the subject homes.

Larry: Are you allowed to do, if someone knows of a private sale?

Brad: We are allowed to do that, especially if they are needed. If you don’t have a lot of good comps in the neighborhood and it is a unique home and you don’t want to go three miles away for some reason. If you have got some good private sales; an appraiser can and should use that.

Larry: Like if we were selling a house that we knew the neighbor down the street just sold theirs as an individual to another individual and contact them, you could get the information directly through them.

Brad: Yes. You would have to go the extra. Nobody likes to do extra work, but we would have actually interview either the Buyer or the Seller in that; and they are usually under no obligation to us. We want to know the condition of the home. That is important in doing your job sense and analyzing your data between your adjusting your comparable to your subject. Where on the MLS Sheet you have a lot of Realtor comments that go into that and the Realtor, of course, is available if you need clarification. So there is lots of data we get on those MLS Sheets. At least in our part of the country, I think the integrity and quality and the detail is exceptional. They are essential to what we can do. We are going to take those data sheets and use those square footages that are on there, use the bedroom, bath count. We will look at a deck or porch, what kind of heating system and we are going to check the size of the lot, but is on there. All that data gets flowed into that full Appraisal Report and needs to be adjusted. We kind of like having the MLS Data; because all the details are in there.

Larry: Exactly. There is a lot of stuff to sift through, isn’t there?

Brad: Yes. You end up with your best what you call three comparables, but it really gets distilled down from hundreds of potential comparables. You can enter in parameters now in our automated system. Back in the old days you had public books and you just had to flip through the pages and try to decide which is your better comps. I can imagine it was a pretty long process; but now you can search by varying criteria and that is how I search my comps. I do it by area, I do it by size of the lot, I do it by size of the house and by date, of course. I go back twelve months, six months is preferable. I can enter all those parameters and see how many comps I get, so I try to get it down to ten or twelve and then I will look at those and then end picking the best three. You start with literally thousands that are on the system and decide which are your best three to rely on.

Larry: I guess that is probably why, Brad, that if you get three different Appraisals from three different Appraisers, you are going to have three different numbers. There are so many that you have to sift through.

Brad: Appraising is part science and part art. It is only an estimate, but you should be within I would say 5%. If it is $100,000 house, assuming that is the Market Value is $100,000; good appraisers should be within usually 5% I would think. In a market where you have active data and flowing. If you are out in rural areas it tends to be very difficult to get a handle on what something might be worth.

Larry: Absolutely. You mentioned a key point awhile ago that I think is important for everybody to hear again. When you are looking for sales, you are looking for sales no older than twelve months, preferable six months. What about the distance between your comps that you are looking for. Distance from the subject. Is there a rule of thumb for that?

Brad: It really depends on your density of housing. If you have a subdivision that has hundreds of homes, certainly there is no reason to have to go outside that subdivision. You will have enough active data. As the areas become less and less dense you have to start moving out away from those areas, but you want to stay in a similar quality of homes, similar age of homes. Sometimes, often you can find another subdivision that is nearby and that is okay. The problem with, and our reports get reviewed by underwriting at the Lenders, and we have to produce a location map that shows the subject and where the comps are picked. If they look at that and they see that you have a lot of streets and obviously density of housing; and you have gone three miles to pick your comps. They will be suspicious that you did that for a reason and sometimes the reason is to have an inflated value and that is not going to get past underwriting guidelines. But it is just a function of what is available, looking at your density of houses. Any time that we have to make a comment, if we go past a mile. If all three comps were further than a mile from the subject, we have to discuss that, why we did it and why it was necessary; even though they are that far out, are they still in similar neighborhoods.

Larry: That is part of your addendum, right?

Brad: Yes. That would flow into a whole lot of the Addendum verbiage that the underwriter is going to want to see.

Larry: Right. I think it is also important to point out. I have heard so many people say, “well I know of a house that just sold down the street. Why don’t they use that?” I know you will be the first one to say this, “a sales does not necessarily mean a comp.”

Brad: Right. Often time a homeowner will, they will be talking, in my experience, about something that is listed for sale.

Larry: Yes, has not sold, but is listed.

Brad: Yes and of course we cannot use that yet, because people could ask anything for the house, it may be quite properly or it may be inflated for all we know it may be too low. It could be anything and we can only use closed sales. At that point, you have your willing buyer and you have a contract and it is closed and now it is a done deal. Then you can use that number. Most Appraisers will be happy to take in that information, if it is a sale, from a homeowner, from an Investor, from whoever, if it is a professional Appraiser. He is not going to say whether he is going to use it or not at that point, because he has not done his full analysis yet. Sometimes data does not get entered into the MLS System properly or at all. So I will write down if someone mentions the home down the street sold. I will take down the address, the information that the homeowner has and I will check into it and make sure that I have looked at that and analyzed it. It may not end up in one of the three, but it may very well be. Sometimes
the Realtors don’t enter the area or the sub-area properly and it will not get into my search results.

Larry: Oh yes, there is nothing you can do about that if you don’t see it.

Brad: Right, there is no way you would know. You don’t live in the neighborhood, you didn’t that it had sold. It could have sold next door last week and if they did not enter it right in the data, it is not going to come in your system. So I welcome anybody that will give me additional, not only information about the subject you know we replaced the heat pump or the gas or the roof, you know. We are totally objective in this process and the more data we have about the subject or the market around it, I don’t take any offense to people telling me things. They know the neighborhood probably better than I do to some degree.

Larry: Every little bit of information that you can get helps.

Brad: Sure.

Larry: I know there are different kinds of Appraisals. Can you explain that a little bit.

Brad: Well, there is different kinds of Appraisals and there are different kinds of Appraisal Reports. I guess I could start with different types of Appraisal Reports. Some can be as simple as Desktop Appraisals and more and more of these kinds of things are done these, they are not what we call the old full blown walk through go visit and measure the house Appraisal. There are these shorter versions that are sometimes used. I will go through these, they don’t often apply to Investors, because the more sophisticated properties the Lenders want the full complete thing, normally. This may be interesting to people who are just re-financing there own house or something may get by with some of these. The simple one is just a Desktop and now systems reviewed. Where the Appraiser never actually goes and visits the house. They take the data off the tax card, which is the living area comes off of that and uses that to compare. He will still look at comparables then, but he has to take property data off the tax card. That is usually where it comes from, but that data is imperfect, but that is the understanding and sometimes if someone has very good credit and it is on their house and it is owner occupied. Sometimes they do these because the banks don’t pay us near that much to do these simple Desktop quick kind and there is no delay then. You can do it within a day or two and turn that thing around. It only takes 30 minutes or so.

Larry: You don’t even have to go out, right?

Brad: No, you don’t. More common is what is called a drive by appraisal. When you do actually drive by the house, hopefully slow down enough to get a good picture.

Larry: Where it is not a blur.

Brad: Yes. Just show the thing does exist, but again you are not getting out of the car or walking inside the house to see the condition or measuring it. But you do at least verify what the setting is in the neighborhood and the site is fairly level, it is not something unusual or it is not near a Textile Plant (Textile Plants are okay), but it is not by a Chemical Plant or right by a freeway, it is good to see where it sits, it is not burned down, it does exist, here is a picture of it which will go in the report; but then your analysis is still based off the tax card, which is imperfect and you haven’t measured it and it could be anything; but that is understood and there is a disclaimer in our reports that says, “the tax card says it is 1,500 square feet and that is what we are going by.

Larry: When would a Lender us a drive by Appraisal?

Brad: Again, there are done on mostly owner occupied.

Larry: For a strong Borrower I would imagine.

Brad: Strong Borrower with good credit ratings, because figure it is unlikely that they are going to get this loan back or the house back, so the collateral is not near as much important as it would be otherwise.

Larry: Now I just did, and I know you have other Reports to talk about. But I re-did my Home Equity Line of Credit, we just increased, we actually got it doubled so we could out and buy more houses at one time and then re-finance them when we get the money back. But they did, they said they were going to do an electronic evaluation, where they did not even call an Appraiser. They just, I don’t know what it was, but it took them like two days and they were done.

Brad: Yes, with the large Lending institutions now it is more and more common to do what we call AVM (Automated Valuation Models). These are statistical analysis, they are centered on the tax data of the subject and the square footage; but they do a statistical analysis of your neighborhood data, they come up with just the dollars per square foot and multiple it by the tax square footage and there is your number.

Larry: Wow!

Brad: If that number is good enough to suit what the loan package is and supports what they want to do, even though everybody understands it is not very accurate. It could be high, it could be low, it is just very uncertain. As long as that supports what needs to be on the loan, yes it can be done very cheaply and very quickly. Particularly with such a high quality grade applicants and in a large institution. They can sometimes get by with that now if it doesn’t then they have a way to step it up to maybe a drive by next and then if that still doesn’t work then they can do a walk through.

Larry: Yes, I was rather surprised that the Electronic Evaluation would down here in Lake Wylie. Although I live in a big neighborhood, it is a gated community, but it is Lake Wylie, kind of a small area just outside of Charlotte.

Brad: These programs are becoming more and more sophisticated and unfortunately, to some degree, they are taking the place of a lot of Appraisal work that is out there. It is really our professions and in a way it is a declining business because there is less and less of the traditional walk throughs going on and there are more and more of these AVMs and people loaning off tax values. Frankly the regulations have just gotten looser and looser since the S&L crisis is just a memory anymore and each year it get looser and looser until there is another crisis they will just keep going that way.

Larry: Yes, until things change. You mentioned a Desktop and then the Drive by. What other kind of Reports are there?

Brad: Well, after those two you pretty much step up to what we are more familiar with, with the walk through the full two page URAR. Where we come out and measure the house and we make note of special features, and the condition of paint, paper and carpet and the size of the site. Where it sets in the neighborhood and garage and porches and decks, fireplaces or not and just everything you could possibly think of gets detailed in that report. Then at some point analyzed and compared to the comparables. So you have a whole grid to work with of making these adjustments and fine tuning you final estimate of value.

Larry: Wow!

Brad: For Investor Reports, we also have to put in a rent analysis, which is just a one page form but it has three comparable rent houses.

Larry: That is a 107, you call that, right?

Brad: Yes, that is a 107 and it is required for most income properties that I have been involved in. These are similar to the sales comps in that they should be fairly near the subject in location. They should be similar in size, but these actually have to be rented. These are not what they are asking for rent, these are houses that have leases. We have to put that lease information on all those and then adjust a little bit for square footage but hopefully, get a fairly similar range house and come up with a conclusion there and we consider that market rent. The market rent should compare to what the actual rent is, the projected rent and then that flows into another form the 216 which is the income analysis. Which basically goes through, I am sure Investors are doing this on their own anyway, okay here is my rent income say per year. Here is my expenses and my reserves for replacement and here is my mortgage payments, okay how am I coming out at the end of that?

Larry: Right, am I making anything?

Brad: It is like a Cash Flow/Income Analysis kind of sheet. That is another form that we have to fill out for income properties typically.

Larry: Wow! A lot of paperwork.

Brad: It is a lot of paperwork. My time is, I’m about 50% in the field and 60% in the office.

Larry: Let me ask you this question, Brad. We buy a lot of properties that need a lot of work done to them, a lot of bank owned properties and rehab type properties. Sometimes we Appraise them I guess “as is” which to me, like when I am buying a house and somebody says, “well, it needs a lot of work, but right now it is work X.” Really what it is worth now doesn’t really matter. It is what it is going to be worth after we do the work. Can you explain a little bit of difference between the “as is” and “as repaired” or “subject to after repaired” appraisal.

Brad: Sure, often times because of the for Investor properties, there are loan packages that will loan in the front end, also what you call an “as repaired” value. That is one of the different types of appraisals that I can do. I guess, let me compare it to the simplest case is if it is a new home I can appraise a new home based on the plans and specifications that are given to me by a builder. So I know the site, I pretend as if it was finished and then compare it to the market at this time. What would it be worth? Even though it is an empty lot right now, I can appraise that as “as built”. So in the same way, I can do an “as repaired” on a subject property. Now I have to have a full list of things that are to be done. In this case, you are going to put in new carpet and new paint. You are going to repair all what we call “preferred maintenance”; where you have to take care of wood rotted things and something falling apart here, you need to replace an appliance there. I need that full list of things; because that has to go on the Report. Then I can appraise it as if all those things were done, what would it then be worth? Then at some point in the future, normally whenever it is done the we will go out and confirm that.

Larry: Yes, afterwards you have to do a re-inspection, right?

Brad: Typically, yes. At least at that point you are doing your long term financing or locking something in or maybe you are selling it or whatever, at that point. Yes, typically, we are called back in to check on those things. But we don’t care really what the “as is” value now. “As is” is worth $25,000 cause it is in terrible shape, that is why you are getting a good deal on it. We ignore all that. Now we have to disclose that. We can analyze that; but we can still say it is worth $70,000 once all these things are repaired because then we are comparing to similar homes that are in good shape as well in the neighborhood.

Larry: Now, is that called a update or what is it called when you go back and re-inspect it and make sure everything is done. That is not an update is it? That is just a final inspection, right?

Brad: Sometimes if the Lender sets it up originally where it just a “subject to”. I can just fill out a one page Completion Certificate and take some inside pictures; and I just check a box that everything is completed per the original appraisal. Sometimes we have to re-do the whole appraisal because some time has passed. Say it has been three or four months and now we do the income and rent thing, this time around. We don’t sometimes have to do that on the front end for an “as repaired” appraisal, unless they are getting, depending on their financing package.

Larry: Maybe they are getting a hard money or rehab or private loan or something and they don’t need the 107 or the rent schedule. So all they really need up front is what it is going to be worth after this list of repairs is completed.

Brad: Right. If it has been three or four months, then we have to update it with new comparable anyhow. You want to see the latest on that.

Larry: That was one of things I wanted to ask you. How long is an appraisal good for?

Brad: About twelve hours. What can I say?

Larry: From a Lending point of view?

Brad: From a Lending point of view, typically they will accept it, I think it is maybe 90 days.

Larry: 90 Days?

Brad: After that they are going to start deciding if they need an update, which it also depends on the comparables. If you have a good underwriter that is doing some analysis they will let, since we have to pick comps that are within twelve months of the original report. If those comps were pushing that twelve months, say they were 10 and 11 and now they have fallen out of date, so they want those replaced with something new.

Larry: That is a good point. That is a really good point. I never really thought about that. If your comps run out of date.

Brad: Typically, if you work with, say it is my appraisal and I have to update it, they are not going to normally charge you anyway near a full fee to do an updated appraisal.

Larry: Sure, but you got to do something for the little bit of work you have to do.

Brad: Right, It is charged based on the time. What ends up having to be done if they need a new effective date, which is kind of what we are getting at, effective date of the appraisal, then you have to go back out and re-inspect the property. So that you have been there and been inside it. A minimum of some field work and then changing your comps, but your property information is basically the same, there is some savings there.

Larry: Brad, when you go out to inspect a home, that you are going to appraise, what all are you looking at and what are you looking for?

Brad: Well, we are trying to put ourselves in the position of the typical Buyer. In some way, you know. Some of it is an impression that you get from how does the property show. On a technical basis, primarily we are measuring it to get the square footage because that is the most critical part. Then we are looking for the condition of the inside and the outside from whether it is siding and vinyl and what kind of condition that is in; to the inside, does it need paint, or what kind of condition is the carpet or the flooring in. Then you go into your features, have you got hardwood flooring, have you got high ceilings, crown molding; you know, decks and porches. Even how do the rooms flow, how is the layout, we don’t like things like you have to go through this bedroom to get to that next bedroom when they added on in the back maybe. Have you seen some of those? Cause then we have to talk about that, because that is called functional obsolesce. You need to have separate access to each bedroom through a hallway and such, you don’t want to have to go through one bedroom to get to another. Or all the bedrooms are on one side and the bathrooms, you have to walk through the living room to get to it. You know, that would not be good; but typically, you stay with just the standard thing. Let me answer from an Investor point of view, too. When we go back out and say the property has been rehabbed, we are making sure that all the deferred maintenance, because the property had been neglected in the past, has been fixed. So things like wood rot, chipped and peeling paint, window sills will get like that, you know, soft sub flooring, if the home is still more similar to a distressed home than it is a marketable, nice new home. Then there is going to be a problem with getting an evaluation at the Investor is going to be looking for. There is really no shortcuts on that, you have an experienced Appraiser going in there and he is going to notice things. So just all of those things need to be fixed even what we call deferred maintenance has to be fixed. Now if the carpet can be cleaned and is still in good shape that is fine. You don’t have to make it perfect, as you might, say if you were sell it. But anything that is what we call deferred maintenance has to be repaired.

Larry: That is something I tell people too when I am trying to buy property and they say, “Oh my house does not need any work”. One of the things that I might say to them is, “when we send an Appraiser out, the Appraiser is going to make notes of anything that may need to be done to your house. Such as some of the walls need to be painted, or maybe there is a weak spot in the floor in the bathroom next to the tub or maybe there are some water stains on the ceiling, any of that”. I like to bring those things up to let them think about well an Appraiser could say that it needed painting, I need a new floor. What it the Appraiser is going to see when he comes out there that he is not going to like?

Brad: Everybody at that point wants the highest number they can get on the Appraisal.

Larry: Absolutely.

Brad: To do that you have a knowledgeable Appraiser, in this case let’s say we are supposed to put ourselves into the shoes of a knowledgeable Buyer and that will they notice? What would they like and what they not like? For the Appraiser to put you at what we call the top end of the range of sales available the subject has to deserve to be there, by having all of these things done and taken care of.

Larry: Exactly. It is kind of like the theory you can sell your car for more if it is just cleaned, you know.

Brad: The impression people get in when they walk in presentation is important. Now we try to be objective, and you know, we are not going to be swayed too much by decorations. I mean we don’t even notice personal property that is in it. The way a house is decorated really does not matter too much to an Appraiser. It doesn’t really apply necessarily apply to Investor property, because they are vacant or your tenants in there by then. We are looking at the structure.

Larry: Right. You are looking at everything that is going to make a difference to an informed buyer. One of the things I wanted to ask you was, sometimes you run into a situation where, you know, hey I have already got and Appraisal, can you use it? Or I just need to call my other Lender and get them to send it to you. Who actually owns an appraisal and who does the appraisal work for?

Brad: Well, by the Federal guidelines, whoever the Lender is, is my client and they own the Appraisal. Even if the Borrower or the Investor paid me directly or indirectly, which does not seem right or fair but that is the way that the lending regulations are set up. Once I prepare a report, where at page 1 there towards the top is a place that says Lender/Client. If I put Wachovia, Bank of America or what ever Lender goes there. If I put that in the Report and submit it, they own it. They control it, and I cannot even get a copy to a third party including the Borrower, even if he paid me $300 directly at the inspection. I really cannot give him a Report without the approval of the Lender, which is not a problem. By Federal Law they have to give you a copy of the Appraisal Report. Often times, even to save time, sometimes I will ask and they will say, “okay, yes, you can send them the report”. But they have control over it, which means that if you walk from them and go to some other Lender and then call me to do something, I cannot do anything.

Larry: Right.

Brad: Without the permission which we can go back and you can get your final release from that original Lender and then ….

Larry: Then can we do it with the new Lender’s/Client’s name on it.

Brad: Yes, then I can reassign it. But my hands are tied as far as me being able to do things on my own.

Larry: Right and does it matter who ordered the Appraisal?

Brad: No.

Larry: It doesn’t matter?

Brad: No. Now sometimes, on a rare case, I will do an Appraisal for an Owner or an Investor directly. At that point there is no bank involved. They want to know what it is worth for some reason. A Homeowner wants to sell his house, it is in, if you guys know our market here in Charlotte, say it is in Myers Park. They don’t think they need a Realtor because the market is so hot that they could sell it without a Realtor. They are going to save the commission and you know, all that. But they want to know what it is worth. It makes sense because they do not want to lose money, you know thousands of dollars by under pricing it. So they will actually hire an Appraiser, for me to tell them what their house is worth, or estimate what I think there house is worth. In that case, their Bank is not involved so my client is the Homeowner or is the Investor if it is done directly. But if I am instructed to put a bank in there, a lending institution, on my Report and it is submitted to that bank, then that is my client at that point.

Larry: Wow! That is interesting. You get a lot of different stories about that from different people. “Oh yes, just go ahead and send that over”. “We will go ahead and send that to you or whatever”.

Brad: Yes, you get calls and they think they can use it and they can use it, they can use it, they can use it and then they try to close and they find they cannot use it.

Larry: Yes, when it goes to underwriting.

Brad: Yes, it has to be in the right Lenders name. I guess the moral to the story is, I decide who your Lender is before your Appraiser. Shop you deals, check your rates, you know, decide who you want to work with and then let them handle the Appraisal part.

Larry: Not that it is a big deal, I guess. But all Lenders have a list of approved Appraisers.

Brad: Sure, they are going to have their preferences as well.

Larry: Exactly, but what I meant by not that it matters that much; because if you are not on one of our Lenders approved list, all you have to do is submit the Resume and your information, your license and all that and a couple of samples and a week later you are on their list.

Brad: Yes and they will make exceptions even easier than that, because they want the deal. They want the business and if you have already paid for this Appraisal and now you are having to, you know, you couldn’t use it for some other reason with that Lender. But that Lender has released it, I think a new Lender would generally, as long as you are what we call State Certified, which anybody who is out there appraising the way we do for fee appraisals is State Licensed. They are going to accept that with that work.

Larry: Exactly. Let’s talk a little bit about property clipping from an appraisal stand point. Tell us a little bit about that.

Brad: I would like to say that there are two kinds of property clipping. There is the legal kind and the illegal kind.

Larry: Right, the government definition.

Brad: Yes, and we are involved of course in the legal kind. But the illegal is a little simpler. Let me start with that. Where somebody buys the property for say $50,000 and it is distressed property and does not do anything to it and then sets up a sale to a generally fictionist Buyer for $85,000. They have a bunch of people involved in the collusion of it, but it get through. You have an Appraiser that is not doing what he is supposed to be doing, you have Attorneys, you have Lenders, you have a whole bunch of people and you read in the paper. So you have an inflated sales price and inflated appraisal to support that and you have got a Lender on the hook for something that is way over market value.

Larry: Fraudulent Buyers and all that.

Brad: Yes and it is just doesn’t get found out until later and than it is a mess. Yes and sometimes you got closings on the same day I have seen. It is then just simply Real Estate fraud and that is property clipping and they talk about that and that is why there are so many regulations. Now on the disclosing past sales of the subject and the comparables is to kind of avoid, try to minimize some of that. But still property clipping can, on a legal side/Investor’s side is simply fixing up the property, increasing its value and its market value and then reselling it.

Larry: Buy low, sell high.

Brad: Sure.

Larry: Create value, add value.

Brad: And I do appraisals in those situations all the time. Sometimes they stay in a rental suite, but sometimes they are re-sold. For a profit and sometimes you have wholesalers as your Investor group knows about and so there are opportunities there, totally legal. There is no Collusion, there is no inflated appraisals involved, it is just a straight, it is just an opportunity because it is distressed property and then people adding value as, especially to one that is rehabbing it then. Because they are going to get, say $2.00 increased in market value per $1.00 spent. So there is a profit to be gained there.

Larry: They are building value.

Brad: There is nothing wrong with that whatsoever. But Appraisals have become pretty sophisticated and that is why we take interior pictures along we have them developed with repairs that were made. We have to discuss why this thing was purchased at this low number and why. We can do all that and if we do all that, and we do it in enough detail and we do it up front, which I think is important, before it gets submitted to the Lender. It gets approved quicker and better and easier. If you do it all that way, everything is disclosed and above board and there is plenty of data there and they don’t really have many questions after that, because it is for anybody that is involved in this end of the business they know that this happens all the time. It is totally legal and it is above board and this is what it is.

Larry: Sure. We just stay away from the term clipping and just use the term wholesale.

Brad: Yes, clipping just has that stigma attached to it and it kind of takes you, so it doesn’t serve what we do to keep that term.

Larry: Exactly. Now I wanted to ask you this about. We talked about the different areas that you cover. What are some of the typical fees?

Brad: A typical fee for the full appraisal, like we are talking about the two page URAR …

Larry: Which most banks want.

Brad: Which for Investors properties are what we are talking about is generally around $300. That is in our market.

Larry: That is in our market, yes, it may be different in some of the other states of people that are listening.

Brad: Then there is an extra charge for doing the rental analysis and the income analysis, which are either $50 or $75 for each of those. So somewhere around $400 for that.

Larry: And of course a trip charge for going back to do the completion, right?

Brad: Yes, it that ends up being. It is usually $50 for going back out and doing the final, if that is all you had to do on that one. Is filling out the one page final and clipping pictures, it is just a quick trip fee and there is not too much desk work involved in that one.

Larry: What about for a drive by and an Electronic or Desktop?

Brad: Those, the drive bys get down $250 to $200, you can even do a $150 and $175 if there is just straight re-finance, slam dunk, where you do not have to show sometimes a Lender can ask for a comparable actives and pendings in the neighborhood. You know market data to support what you are doing. There are extra forms and all that and that is why sometimes they are up around $200 or $250, but yes, you can get by and the AVMs are only like $30.

Larry: Now what about, and I used to have one, a Marshall Swift Book. Do Appraisers still use that and if so, tell us a little bit about what that is.

Brad: Sure. In our estimate of value there are three approaches for Residential properties that we are asked to complete for the Lender. We have been talking about the sales comparison price. We also have to develop a cost approach, which basically starts with your site value, then you add the cost of the house minus any depreciation, physical depreciation if it is not new, which is normally the case. Then you add for your site improvements like your fences and driveways and landscaping and such and then decks and porches and fireplaces, kind of go on top of that too. You come up with a number. That number should correlate to your Conclusion on your sales price. We seldom every rely on the cost approach for your final conclusion. It is more of a support analysis; and what you mentioned the Marshall Swift that is the commonly used cost data handbook that we go to to figure out primarily your dollars per square foot for a certain quality of house or size of house. And it is adjusted by region and by market to give you a sense of what the builder’s cost and that. But if the house is ten years old and we have to figure out the depreciation, then it becomes very suspectible, but it is still a worth while, we still have to put it in there, it is still a worthwhile kind of a check and balance against what you conclusion ends up being, it should be in the ballpark. The third approach is the income approach. Even Investor’s property, Lenders generally don’t ask us to do that kind of analysis, but it is there on that two page URAR Form, it is simply gross rent times a rent multiplier and that gives you a number, but it is seldom asked for or done and again it would only be there to support the conclusion of the sales comparison approach which is also all cases even new houses where your cost is pretty close there on a new house, it should be and you don’t have any depreciation. You are still going to rely, Lenders are still going to look at the Sale comparison approach for determing the value.

Larry: Yes, because you have given most of the weight to that because that is what the market will bear.

Brad: If people are not buying property, the income approach gets used more on commercial property and when you are buying things off of an income stream.

Larry: Right.

Brad: Apartment complexes, yes your capitalization rate and you are buying things on that basis. You are buying the cash flow and that.

Larry: Sure. The return on your investment. Exactly.

Brad: It is all there on the URAR Form, but it is not as detailed and it is not relied on for your conclusion as much.

Larry: You know as an Investor, there are a lot of deals out there right now. Mobile homes, but they are so tough to get financed as an Investor. Talk a little bit about some of the appraisal stand point the difference between a manufactured home and a modular home.

Brad: Well, the is a clear definition in the last, I guess, year or so. Now we have at least in our state, I assume they have done this Federally. There is a State Modular Stamp that when we inspect the property, we look for. This basically can be earned by the Manufactured Home Plant by upping their standards and their quality of construction and the things that are inspected in more detail at the plant and they earn this Modular Stamp. It seems, often times that you cannot tell from the exterior, they look very much the same. The same lower pitched roof but when you go inside some of the modulars, now not all of them, but some of them will have drywall. You know they will have stud walls with the drywall and they will have I guess their floor joists are more like a site built home, where they support the sub flooring and it doesn’t move and you can have a higher pitched roof and you have some more custom features here and there. But even if it is modular, the quality construction still varies a good bit from one to another. But practically speaking, if it has a modular stamp when we appraise it we are the allowed to compare it to site built homes.

Larry: You are able to use site built comparables?

Brad: Yes, in fact we are practically mandated to such, because as you know there are different lending packages and if we say something about it being a doublewide, say it is a modular and we don’t treat it that way, and the Lender cannot get the proper financing, we become liable because we have caused that.

Larry: Wow!

Brad: So our comps should be other modulars or site built and not doublewides.

Larry: Does it matter whether the modular is on frame or off frame and can you explain that for people that may not be familiar.

Brad: No, it doesn’t. Of course I am not an expert on manufactured housing, but no it does not matter whether it is off frame or on frame. It is simply a matter of whether its got that modular stamp whether it has earned that or not. Almost all of them are, well the ones I have seen around here, are still on frames. They have only earned, the ones I have seen, that modular stamp by increasing a little bit on the quality of construction there at the factory, but they are still assembled in two pieces and sealed. Now there is even higher modulars, now modulars houses, with that being said there is a lot being done on modular housing where whole wall panels say are brought in and there is more of it being done and sealed than bringing in in full completed sections. The walls are brought in, the roofs are brought in in one piece and you can have 1-1/2 and 2 story modular homes.

Larry: Tantalized housing I think they call it.

Brad: Yes and that is becoming more and more accepted in the market place and appraisers should be valuing those closer to site built. That is not to be said that you do not adjustments for the quality of construction because your are not going to compare that to a spec house or a full brick house and things like that.

Larry: Right.

Brad: Each market is different. In as far as the acceptance within the market and where they work and value and what is your, how would they sell and be received it is a matter of your own market.

Larry: I have heard that at one point, and this was maybe a year or two ago, that and Appraiser is not supposed to use as a comp dealer sales on manufactured or modular homes when doing an appraisal for a re-sell or a re-finance.
Is that true?

Brad: That is true.

Larry: Okay, do you know why that is?

Brad: Basically, because the, I think the integrity of the sales contract is not very good. They are sold all over the place high and low based on what the person can afford and they come in and ask, “what is my payment?” and instead of what is my total price on it.

Larry: Alright, I am with you.

Brad: These are worksheets, that I have seen, then they are sales contracts. There are things factored in, you know, and so it is similar really to new construction. When I have to do a new home, a new site built home in a neighborhood, I cannot use three new sales. My three comps cannot be three from that neighborhood, because you want competing data from other neighborhoods and you really want a re-sale in there because you can over pay. If you bought a house and you told the builder that you want this, this and this you can run up the cost another $20,000, well you have a sales contract. You paid that, but often you can over improve it, you do things that you are not going to get back in market value. So, you know, a sales contract even in those cases can be inflated and they are not that accurate, it is more re-sale. Okay two years later what did you get for that house, or a year later? Sometimes we will be lucky and find sales in a new subdivision and for one reason had to turn over fairly quickly and so the lender wants different data from different neighborhoods, because that kind of makes them feel better about the integrity of the data that is out there. So Fannie Mae, Federal Guideline that you cannot use the contract sales. Which makes it very difficult to appraise manufactured houses because we have to find, again we prefer MLS, which you have to find re-sales of manufactured homes and at least around here there is a high percentage of them are distressed property. So those values are lower.

Larry: Right.

Brad: So that does not necessarily give you a true market value.

Larry: That is a really good point, that is a good point.

Brad: Now that being said, as far as our selection of comparables whether it is manufactured homes or like we were talking about with the Investor properties, and just re-finances and such, we are not, if we find distressed sales MLS sales in the neighborhood, and we know that, you can tell from the listing sheet it is bank owned property, as is, need repairs, tenants required and all that. Or it is a relocation appraisal situation where they had to turn it quick. The company bought it and sold it. If these are low sales and what we call below market sales, we can discount those. We have discretion not to use those, in fact they should not be used if they sold for below market.

Larry: Sure if they were unique situations.

Brad: Yes, now if our subject is a distressed sale, then I should be using those because they are comparable.

Larry: Right.

Brad: But we are talking about homes that have been repaired or are in good shape, they show well.

Larry: They have been fixed up to re-sale.

Brad: Yes.

Larry: Right.

Brad: So these sales are out there and we can discount them, but finding a good manufactured home comps is a challenge for, at least I that for our market.

Larry: Wow!

Brad: Because they sell for all over the board from the same square footage from $35,000 to $85,000.

Larry: You mentioned Federal Guidelines a while ago. Who is it that regulates Appraisers?

Brad: The Feds primarily. And than the state level as well. But we have to comply with what we call USAP (the Uniform Standards of Professional Appraisal Practice) and all Appraisers have to adhere to these codes, they tell us how we are to appraise property and how we are to report the Appraisal.

Larry: They give you the standard forms and all that?

Brad: And the standards of actually what you have to do in the field. It is comprehensive, inch and one half thick kind of a manual of how we have to do things. What it really boils down to is doing the job properly, reporting it properly, don’t be misleading and there are ethic clauses that go throughout, don’t intentionally mislead anybody and you cannot inflate and you just basically have to do it right, if you do it right and report it correctly and you do not mislead people, you are going to be fine. It does change, the language in these things changes from every two years or so, so it is updated and there are some updates coming like we talked about with comparables. But each Appraiser is mandated by the requirements that are in that and to keep his State licenses. Appraisers get disciplinary action against them, they could lose their license so it goes on all the time because they did not adhere to the standards.

Larry: Yes.

Brad: Where it is knowingly or unknowingly and so when you ask an Appraiser to do certain things, he may say, “I cannot do that.” And that is the reason why.

Larry: Exactly, you guys have a lot of rules. They are pretty tight too.

Brad: Well, we are supposed to be an integral part of the Lending institutions and the practice and as you know the banks package and bundle these things and sell them as securities on the exchanges and so it is just one little Appraiser doing one appraisal report but when you take them all in together and there are thousands of them or hundreds of thousands of them and they are bundled in by the Securities and Exchange Commission, they want to know that the integrity of the data and the reports is there.

Larry: That is why it is Uniform, I’m sure.

Brad: Exactly.

Larry: I actually a 2003 USPAP, Appraisers Standards Manual, this is a thick manual here.

Brad: Yes, and we have to take continuing education, which every two years involves having to take an update course on new data.

Larry: I think that is where I actually got this, I took a CE Class Continuing Education for the Mortgage Business and it was about Appraisals and that is where I got this.

Brad: Yes, it is not a fun Seminar to have to go to. It is the most boring thing that we have, but it is necessary and important.

Larry: Sure, you have to keep up with what is going on,

Brad: In so far, Appraising now for the guys who have been around awhile it is much different, I guess from the old days when the guy walked out with his clipboard and said, “what do you need?” and they wrote it down and that is where some of the problems came from.

Larry: Those guys are in jail now.

Brad: The S&L crises was not from residential property, it was commercial things. But when it all boils down to doing it right and you know.

Larry: Well, it like I say, do it right and sleep at night. Then you don’t have to worry about it, right?

Brad: Exactly, that is the way I look at it.

Larry: Brad, there are a lot === where they are out of town. What are some qualities, some things that a person needs to look for in finding a good Appraiser to get the deals and get on their dream team?

Brad: Well, I think they certainly they have to be what we call State Certified. And make sure they are knowledgeable in your market. You want someone that is based near you. That is not driving, you know, three counties over to do work where you are. Depending on where you are, if you are in a large Metropolitan area you will not find a full time Appraiser. Right local to you there but that is a hard one to answer, because as most people realize in any profession there are people that are good at what they do and they run the gamete. You just, I guess referral is a good way to start with.

Larry: I think it is also important to find someone who knows the Investor market. That knows doing subject to or as is repaired appraisals. Because there are some appraisers that do not do that, isn’t that correct?

Brad: Well, yes. I have really learned a lot from doing it and with you guys where we had to do add things and do stuff and now we just do it as a matter of standard practice. We kind of learned together and kind of learned from underwriting and things do evolve and change. So I guess you want someone that has been doing it for a while, is experienced enough, so experienced that they are set in their ways, wants someone who is automated because we do not now, for example, where we used to print out reports and deliver them or mail them somewhere and glue the pictures onto the form, for sometime now I have not done any of those. They are all electronic. It is digital cameras, it is scanning, it is downloading things from the Internet. Then they are all e-mailed to the Lender. So you want to someone that, there are people that still do no work like that. You want to find someone that has kept up with the technology.

Larry: Who is not technologically challenged.

Brad: Yes. Well I think we are all a little technologically challenged, I only learn about as much as it have to learn, but it is always something. You are glad you did it when you finally get it worked out, because it really dose help us to do a better job. Do quicker jobs. That is what you are going to want from the Appraiser because Lenders more and more are going to that and they are going to ask for that. If you want you want an ongoing relationship, you need a guy who is keeping up with the technology.

Larry: Absolutely.

Brad: That being said, even though they are State Licensed, you know some have not kept up with it.

Larry: I think another thing too, is when you are looking for an Appraiser to become a part of your team. It needs to be somebody that is number 1, has good strong ethics and morals and is not going to be swayed, although like you mentioned earlier, more information, if a person can give you other comps or more sales or whatever that could help justify those things are all good. You need somebody that is going stick to their guns and say, do you want a good appraisal or not?

Brad: I think that goes with anybody on your team. You want those character traits. If you want to be doing it for long term and doing it right, it is essential. You end up getting a reputation with the Lenders and the people that you work with. If you are not doing it right. If you ask an Appraiser to do something and he says he cannot do it, or if you want it inflated $5,000, it may help in that one case but in the long run it is going to be a problem. A good Appraiser should be fair with you because it is an estimate of values and if you fix it up and you have done it right, you deserve to be at a higher range, for where your comparables are at. And that is all you can ask them to do.

Larry: Absolutely.

Brad: If the comes in consistently being conservative, you that is not fair either, but you cannot ask them to inflate things because it is going to get caught. It is going to get picked up with the Lender and the underwriting and it is going to be a problem.

Larry: You are exactly right. I think that is very important to point out. That it needs to be not only somebody that does have ethics and morals, but somebody you can communicate with in the event you have a situation where you know, you may feel like, you know, there is more value there and they are not afraid to talk to you about it, but you also are not afraid to tell them, “hey here is what I found, here is how I justified this, here is why I cannot go any more and let’s do this one and move on to the next one.”

Brad: You should be able to have an open conversation with your Appraiser.

Larry: Absolutely, and good service is important too.

Brad: Yes, everybody wants them quick, so we try to stay on the move.

Larry: Exactly, you are out doing two a day, aren’t you?

Brad: It changes, you try to group them together by location, because the driving time is a down time.

Larry: Right,

Brad: So, say for Fred we are going, you know, Gaston County today, I will even call him and say, “Hey do you have any other you have not told me about yet?” So we are here and I do all the inspections I can in Gaston that day. So the next day maybe it will just all be setting in the office, just working on the reports kind of thing. So it ebbs and flows, but I try to group them by location, I find I can get more done and get them done quicker that way.

Larry: That is a good point, and speaking of Fred who is a good friend of both of ours, in fact, I met you through Fred, something like that.

Brad: Time flies when you are having fun!

Larry: Man, I am telling you, it has been a long time. I don’t know if you know it or not, yet Brad, but Fred and I are going to be doing a Rehab Bus Tour.

Brad: I saw that on my Memo tonight, that came in.

Larry: Yes, it is going to be on March 5th. We are going to meet over in Charlotte, we have chartered a bus. A huge bus that has a bathroom built in and all that good stuff. We are going to leave early in the morning about 8:30. We are going to go around and tour properties and Fred is going to show us, I don’t know, maybe 4, 5, 6 different properties or maybe more that he has under different stages of rehab. He is going to show us, you know, why he bought them and how he bought them. How he structured everything. How he determined this is a good rental versus a retail. How much work he is going to do to each one of them. How he determined that. Dealing with contractors and inspectors and inspections on the property. How to set himself up for success in the whole rehab process. It is going to a great learning experience and I am really excited about it. In fact, I just shot out an e-mail last week and Fred was on the Teleconference last week and I think we only have maybe 28 or 29 seats left, something like that. If got a couple of orders just this afternoon, so I think we have maybe 26 or 27 seats left. I know it will sell out. Anybody that wants to register for that, you can go right on our website at www.larrygoins.com and there is a picture of a big bus there; scroll down a little bit and it tells about it and there is a button to click on to register. It is only $69. When you register, you will receive an e-mail telling you when and where to show up on that Saturday morning. We are going to go out and tour about half a day, we will come back around 12:30 to 1:00, we are going to have lunch. We cannot pay for lunch that is $69.00. Wendy Sweet, my partner here at Financial Help will come in; and she is going to talk about creatively financing your deals with no money down and how to set yourself up to get your loans closed fast and get organized with your finances. That will be pretty neat, that is a little added bonus there. So it is going to be a lot of fun. I am sure that thing will sell out pretty quick. So we are looking forward to that. Brad, I really appreciate having you on tonight, it has been a lot of fun. Man there has been a tremendous amount of information, I have a page and a half of notes here.

Brad: Well, thanks for the opportunity. I hope I answered some of the questions, and I enjoy working with you guys over there.

Larry: It is a lot of fun, like you said, “time flies when you are having fund”. Let me ask you this question. Would you like to give out your contract information in the event someone would like to contact you to do an Appraisal or if they have questions?

Brad: Yes, sure. Let me give out a couple of numbers and my e-mail, I guess. The office phone number is: 704-846-2745, the fax number is: 704-846-0323 or you can send me an e-mail, I don’t have a website. Generally my business comes direct from the clients and so we have not had that set up. I fully anticipate it, but you can send me an e-mail at bkroll@carolina.rr.com and the market areas I cover, since I am based in Mecklenburg County here is Charlotte, I go one count out in all directions, which is: Gaston County, Union County, Iredell County, Carrabus County and some times a little further than that, I am actually licensed in South Carolina as well. I do the two counties of York and Lancaster down there from time to time.

Larry: You do Lancaster, too?

Brad: If I have to.

Larry: Wow! I didn’t realize that.

Brad: Yes, it is a long county, you can about go to Camden.

Larry: You go to Camden?

Brad: Well, you almost can. When I say I do Lancaster and people take me up on it, I end having to, it is a long, long county.

Larry: Oh I know, Camden is almost in Columbia.

Brad: It is way down there.

Larry: Go to Columbia and hang a left.

Brad: Larry, you cannot pick and chose the easy ones, you cannot just do the easy ones. Sometimes you have to do the hard ones that come your way too.

Larry: You take the good with the bad, right?

Brad: I take the good with the bad and it all averages out just fine. We try to serve. Like I say, if you have clients and they have work in those areas, then you try to make an effort to take care of their clients.

Larry: Absolutely.

Brad: It takes me in both directions. But, yes, if I can help anybody, I am straight residential. We also do duplexes, triplexes and up to four-plexes as a residential Appraiser. Anything pas that you need a commercial Appraiser. For bigger, you know like eight-plexes or apartment buildings and commercial property.

Larry: Which from a Lending standpoint, everything up to four units are considered single families or residential.

Brad: Right.

Larry: So that really helps. Brad, I really appreciate having you on here, it has been a lot of fun.

Brad: Well, thanks again. Glad to help out anytime, us Appraiser do not get invited to too many places so thanks.

Larry: If anybody would like to register for the Rehab Bus Tour, just visit www.larrygoins.com and you can also register for our Newsletter if you are not already a subscriber there. Thanks a lot everybody for calling in, I really appreciate it and I hope that everybody has a great night. Brad, thank you again and you have a great night too.

Brad: Okay, thanks it has been fun.

Larry: Thank you. Good-bye!

Hi, this is Larry Goins and I would like to thank you for listening to this audio program. I would also like to remind you to please visit our website at: www.larrygoins.com for other information as well as we have a link for freebies, we have articles that you can read. I would like to share that we also offer One Day Training events for Basic Real Estate Investing and we also have Three Day Boot Camps as well as the Boot Camp in a Box, which contains the complete Three Day Boot Camp on audio CD as well as DVD Video. Please visit our website for the location and schedule of our One Day and Three Day Boot Camps coming up. We also have a Home Study Course, called the Complete Insiders Guide to Financing for Investors, which consist of over 500 pages in the Manual and 10 Audio CDs, as well as two forms discs and other products and services as well. We also offer personal coaching and mentoring, so whatever your needs may be please feel free to give us a call. If you are a Real Estate group, Investor Association, Mortgage Company owner or other organization and would like to have either myself or Wendy Sweet or Leon Humphrey speak at your group about Real Estate and Finance and Investing, please feel free to give us a call. Our direct Office number is 803-831-0056, I am at extension 304, Wendy Sweet is 310. I would also like to remind you that we also offer traditional financing as well as hard money and rehab loans for Investors. Please visit our website there at www.financialhelpservices.com. Thank you very much for your business, we sincerely appreciate it and please remember our mission is to put people and principles in front of profits. When we do that, everybody profits. Thank you and have a Great Day!