Are BPO's Accurate or is there a Better Way? | Real Estate Notes Show

Episode: Note Investing Are BPO's Accurate or is there a better way? With Mick Kuehn Dave's Goals and Plans: - Starting September 20th, hosting a 10-week junior Mastermind group for beginner to mid-level note investors - Focus of the Mastermind is building confidence in note investing and buying right - Will be sharing resources and tools publicly for the first time during the Mastermind course - Planning to provide homework and real scenario experience in the course Nathan's Goals and Plans: - Emphasizes that due diligence is one of the more difficult areas of note investing - Notes that the due diligence period is short but critical - you have to get it right or can get into trouble - States he is a big BPO guy but cautions you can't take BPOs at face value Key Recommendations: - Evaluate the BPO report itself, not just the final valuation number - Check proximity of comparable properties - should be within half mile in suburban areas; flag comps 5+ miles away - Ensure comparable properties match the subject property type - don't compare ranch houses to double-wide mobile homes - When comparing multiple BPOs with different valuations, examine if comps are in similar condition to subject property to ensure apples-to-apples comparison - Order your own independent BPO rather than relying solely on seller-provided valuations Topics Discussed: - BPO accuracy and reliability in note investing due diligence - How to identify quality vs poor BPOs - Common BPO errors and red flags - Reconciling discrepancies between multiple BPOs - Property valuation methods and comparable analysis - Real estate due diligence components (tape data, title reports, collateral) Guest Insights: - Mick's wife Janet started doing BPOs in 1999 and built significant business through 2007-2017 working with major banks and lenders on REO and distressed properties - BPO companies use their own valuation software that may kick back unsuitable comparables, forcing agents to expand search distance rather than go back in time - Quality control in BPO industry sometimes forces agents to choose between parameters, leading to less ideal comparables - Agent conducting BPO may be forced to use less suitable comparables if quality control rejects better matches outside timeframe parameters - Poor BPOs often result from agents not properly matching property types and conditions in comparable analysis foreign from jkp Holdings this week Nathan Turner and I sit down and discuss one of the most crucial parts of due diligence for note investing and real estate investing property values most investors order what they call BPO a broker's price opinion and they count on it for accuracy unfortunately not all bpos are accurate and most of the time they aren't and most of the time aren't filled out by Brokers so what we do in today is sit down with Mick [ __ ] who's a BPO agent but also a real estate investor so he knows both sides of it we break down what to look for in a BPO how do you know if it's accurate at all how do you know if the agent who did it actually knows anything and if you listen at the end you're going to find some tidbits of how we do things to improve accuracy reduce costs and actually get some local knowledge so enjoy but we also have some really exciting news that if you haven't seen it yet we put our email like last night um we'll be posting more about it and we're sorry a little bit late on things just August got away from us um starting on September 20th where hopefully that date will be in stone uh we'll be hosting a 10-week kind of a junior Mastermind group we'll be hitting topics every single week and Diving intense this is for people that are have take a beginner course have some knowledge about notes right and are looking for that in between stage right where you may bought two or three notes and just find yourself lost or took a beginner course have a good grasp of it but want to go to the next level um so you'll be networking with us learning from us but also networking other investors that are going to be in the same kind of level as you are this isn't for those who've done 40 50 deals this is more for those beginner slash middle Advanced people um and we'll put the the link in the bottom but it's on my website and everything else and our emails went out yeah maybe you took that course and you thought oh this is really cool but are still a little bit nervous because you just you don't feel like you've got it we're going through all kinds of different scenarios all kinds of different things uh including homework yeah you get some of that experience as we do the course so that you can you can get out there and our our focus is confidence being confident in note investing and buying right um taking the basic knowledge taking the next step and then circumventing with the network of people and we're also going to be sharing resources and tools that neither one of us has ever shared publicly right um so it's gonna be really cool so if you're looking for that stuff that you said Dave have you asked for it or Nathan and we haven't well we'll be unlocking some of that most of it uh during this course for those who jump in there so definitely take a look at that um we got some people tuning in from Bobby Quinn some some Colorado people feel free to put chats uh in the chat box if somebody were on LinkedIn some people on Facebook group some people on the Facebook page I'm trying to juggle it all so hopefully I don't get distract him well yeah all that no investing due diligence is probably one of the more difficult areas of node investing right and understanding all that um you have the tape data figure out your bid they have the post which is managing which is also struggling but your due diligence period is a few key items right in a short time yes but you've got to get it right yes there's it's it's not to put any pressure but you got to do it right and if you don't do it right you can get hung and and into some trouble so you have some things like the the data on the property right you have the numbers which you can figure out then you have the on E which is your collateral title report oh it is you're knowing the fact of what what the taxes are what liens on the property you also have the collateral file make sure it's secure and also but there's one little big feature that we're we're discussing today which is the value of the property um in Industry standards is to go get this thing called a broker's price opinion other words a BPL so we're gonna have this discussion Dave and I if you don't about bvr no BPO or or the validity of that document uh that report um I do I I'm a big BPO guy however it's I you can't take it to face value and that's part of what we're going to be talking about yeah I think for me understating BPO does make a difference right we'll be talking to Mick today um about this let me bring him in um to the to the fold as we uh discuss this world of valuing a property make it was part of our weekly Mastermind group and he mentioned that some I didn't know about him there was a BPO guy but before we get too far make Welcome to our Friday show and can you share a little bit about who you are how did you be coming to real estate in general give us in your background sure sure hi Dave hi Nathan and uh everybody listening hello how was everybody uh well Janet and I got started actually my wife Janet um that started in real estate in 1999 because we bought a house and we moved to South Carolina and we bought a house and she saw the closing statement and said my God that's a commission I can you know I can do this I know I can do this so she went and got a real estate license just like you know I'm sure a lot of people do the same thing um you know back then you know the market was really seriously hot and people were selling things but Janet didn't want to jump into the uh traditional real estate market so to speak which was driving customers around showing houses and things like that what she wanted to do is basically work desktop type of work okay and she found um a company that told her about bpos and they said all you know they're basically uh very informal almost appraisals but they're not they're they're just price opinions based on the data that you have in the market so she started doing those and she did enough of those well you remember back in 0708 what was coming down the road okay so she was doing those reports and a lot of those reports were done for some of the big Banks and lenders who were looking at a tsunami of non-performing notes coming down the pipe so make a long story short some of these reports got into the hands of these people um in the big Banks and they called her and said Hey listen can you handle the reos for us and if you know my wife Janet she is one of those people who says absolutely I can handle a hundred of them and then we figure it out yep okay and that's exactly what happened is um the REO and the BPO business you know just like the no Community is not that big so um you know when you do a good job and you recommended you usually get recommended throughout the industry and pretty soon um Jenna had customers through HUD uh Fannie Mae Freddie Mac Bank of America and so many different other customers that that we just boomed all the way until 2012.

and we were at the height in 2017 but Janet also knew that that ride wasn't going to last forever sure so uh we started looking and we found notes and we shifted over to the node industry and and learned about the node industry and it kind of dovetailed into what we were already doing especially with due diligence and vpos that's right so um you know bpos became part of something that we do we still do to this day wow well actually Jen's probably still working on a bbo right now but we do we complete bpos every single week sometimes they're listing bpos for properties that we list and sometimes they're fee based bpos is they're companies that pay us to do the ppos so um we do those consistently and we've been doing them for a great number of years and uh uh you know they can be interesting for sure so this is the debate is what what's a good BPO versus a bad PPO we're jumping right into the five oh yeah let's quickly for those who may not know what a BPO is or have ordered them and never looked at them right can you give it a summary of what would they expect on a typical BPO certainly certainly um you know a BPO company will send out an order to an agent and they will ask for the type of valuation that they want okay sometimes they'll reach out and they'll say we need a distressed property evaluation sometimes they'll say we need a fair market valuation we need it based on 120 days in the past or you know you can go back six months in the past they'll tell you a lot of the parameters that they're looking for so it's it's not like it's just a huge report and you got to try to narrow it all down a lot of these PPO companies will give you the parameters that you need to stay within and sometimes it's tough sometimes it's not okay it depends on how Suburban or rural the property may be you know you may have to exceed some of those parameters but a good BPO versus a bad BPO okay one thing to remember is you're not just using a BPO to evaluate the number the you know the the conclusion of the BPO agent the value of the property okay yes that does make a huge difference to you the person who's evaluating that property but you should also be evaluating the BPO okay look at it see the the proximity of the comps okay are all the comps within one half mile in a suburban area okay if they're you know if there's one or two of them that are like five miles out in a suburban area yeah you may want to just kind of give it a another really solid look and why would I typically why are some bpos have that why would why would an aging go outside that area that's a great question sometimes see BPO companies have their own valuation softwares built into these things okay and if it's something exceeds their uh tolerances they might say no we can't use that one or their quality control people will kick it back and say you know you took a double wide mobile home and compared it to a single family house we can't do that right okay we need you to find another suitable comp so instead of going back in time which is one of your parameters you have to stay within 120 so the best thing to do is expand it out distance wise and try to keep it as close as you can so that you get a better indication of today's value okay um so you look at your proximity you know to the comps are they fairly close and I just touched on another another piece right there just a minute ago okay look at the properties what are they comparing it to okay are they Ranch houses compared to Ranch houses that's right okay we've seen bpos come through where Ranch houses were compared to Double Wide Home Mobile you know manufactured homes yeah big red flag huge red flag okay if you see that really question that BPO Okay so we've seen it before um and people that are new maybe have not seen this yet but but we've seen that where a seller of a note will provide a BPO right and then I get my own BPO and they're very different yes how how can that be and we get into this argument of well my BPO is better better but how do we reconcile that like well first of all why and then how do we reconcile that okay well when you get multiple bpos and there's a wide range of valuations okay why look at the comps that they're comparing to you know um is there an average condition house that that is the subject are they comparing it and evaluating it off of nice rehabbed homes within a mile okay now you've got a difference of condition move-in ready versus average condition you know uh you're going to have an inflated value yeah now look at the other one maybe another BPO has average conditioned comps versus the average condition subject now you're looking at more of a of a tighter valuation I'm not saying your pinpoint but you're at a tighter valuation because you're comparing Apples to Apples instead of apples to oranges so in the case where they're comparing it to a fair market is that because that's just what the agent chose or was that an instruction that they received typically it's in instruction okay at the beginning of the instructions you know there's an instruction sheet that they send and it's basically States if the property area is being driven by REO or distressed properties then let's use distressed properties but if it's a fair market area where most of the transactions are being done in a fair market way with an arm or arm's length transactions then start using those fair market comps yeah but if you have to use REO explain why okay is the is the property in lousy condition well some REO properties might be in similar condition so you might want to use those which are to to you know compare to the property so one of the first things I do when I get a BPO and scroll down to the pictures I want to see the property I want to see and I look at the comments the agent often puts inside of them right right now these are typically ones that the sellers provide to me to kind of get it a feel because I know when we work the hedge fund we ordered multiple bpos for the same problem they ordered two one from different companies right and we usually ordered a selling BPO too so when we want to boost our the value of the property to our the end note buyer exactly we had a high BPO that was and most people didn't bother to order one because they didn't want to spend the money to buy a BPL they want to use it when I have and kind of find out that that value me wrong um right is there a way when you look at these bpos so you can without diving too deep know the quality of the person behind it versus somebody who went there took four pitches of the property pulled a quick AVM from their system and did nothing else and spend four minutes on the project and rightfully so yeah this is my part B question what answers first the BPO cost me 100 bucks on average how much is the agent who's doing all this work that we depend on making of that hundred bucks oh man I'm telling you this is a sore spot in the industry okay typically anywhere between 40 and 65 dollars is typically what the BPO agent will be doing and some folks are you know they they run a operation based on that they'll do bpos and just get large numbers of them okay and that's going to be a copy and paste and just throw it in there and let it go what you were just talking about Dave is the comments this is how you can tell whether some an agent has put some time into the BPO look at the comments how in depth are they okay if you've got the same exact comments in 10 different fields of that BPO you know it's just copy and paste and hurry hurry hurry but if you've got comments in like comp one is inferior due to uh gross living area um smaller garage and smaller lot size I adjusted you know six thousand dollars for this okay that's more of a detailed comment in there and you know that they put in some time and effort into doing the research and coming up with a really good valid conclusion versus just spitballing it yeah interesting so I I one of the things that I do a lot of the time especially if it's a BPO that was provided by the seller is I'll take that BPO and I'll compare it first of all I'll compare it to whatever online research that I've done if we're way far off already that's a red flag yes um even if they're close though a lot of the time probably maybe not always but a lot of the time um depending on how what the numbers are and how comfortable I am with the spread all those kinds of things but I will call uh whoever did the report and I'll and and I say right up front I'm not trying to sway you one way or another I'm just looking for accuracy so can you just tell me about the property tell me about the neighborhood how's stuff selling you know and and get most professors don't know they could do that on the BPO shows the agent's name that's interesting true and everybody's got Google so even if you don't really want to call that agent maybe you're not comfortable doing so call another real estate company in that area pick up the phone find somebody who's been some new tricks that you know we're talking online but yeah for the BP of those people you have your souls on top your your for sales you have your solds right I really don't care about the for sales unless something's changing an area I don't care what someone wants the house I care about what this and I focus things like the area square footage GLA I look at the fact of you know the the bedrooms bathrooms I don't care how many rooms it has I look at those kind of big things and if I see a 3-1 when I have a three three or four two I kind of diminish it because I don't know how much a bathroom in that area is worth another thing I look at is if that agent is not from the area that's a big thing to me unless an agent is good and they drove 40 minutes on property I may be interested but if there are BPO quote unquote typical BPO even who's just making 40 bucks kick and don't know anything about real estate you know I feel from my point of view if the agent isn't local the property they're not going to know much about the area yeah right then you're getting a BPO based strictly on data strictly and that is Market um dependent okay it doesn't say anything about the agent being able to choose different comps okay it basically they're just grabbing data saying okay based on this data this is what the valuation should be well they don't have enough variables in there that they're taking into consideration to be able to adjust those comps to the right ones which will give you a tighter valuation yeah I mean that that sounds like uh I'm sorry if I lost somebody there but you know it's uh it really does mean a lot when somebody like Peter saying Dave is is from the area and knows that market yeah you know one of the other things I find is I again uh if I call another one of the red flag uh items is if I call and I end up leaving a message and then they never call me back yeah huge red flag then yeah then I need some other I need somebody that I can talk to I need somebody that has seen the property that I can have it just like you said people there are factories of BPO agents that they're certainly their job is go out do four a day five a day six day make the money give the broker some of the money right because in your situation you're the broker and the BPO if you had a BPO person below you what would that BPO person make you think well typically it all depends on what the income is because um if we were agents say signed on to uh Keller Williams or uh weikert uh uh franchise okay those checks would be made out to the company correct okay and then typically it all depends on what the split is that you agree to with your broker I mean you know sometimes it's a 70 30 split sometimes it's a 90 10.

you know it all depends between 25 and maybe 40 bucks yeah yeah thirty five forty dollars you know and the funny thing was is when Janet started doing this she was with a uh a small local company and the the she told the broker what she was doing and he kind of laughed at her and said you just keep all of it don't worry about it well little did he know that she was going to be doing hundreds of them a year so nice good for her yeah yeah we just sitting on these bpos to give us a property value yeah from people who a may know real estate but most likely be you'd be in the in the Oreo developer are mostly's BPO agents investors knowledge about real estate or are they Plug and Play people what's from what you've talked to what are majority of people there a lot of the people that we've run into who actually are BPO agents are real estate agents who are filling out the forms okay and I would say this is probably 70 30 split okay um they're folks who have seen bpos as a as an income Source something that they can do um while they're slow or not showing properties because you know you can accept or or decline them you know you don't have to take them so when you're slow you can accept bpos if you're not slow and you're out you know ramming the roads and and taking buyers or sellers around then you don't have to take them sure whereas I know a lot of REO agents and uh we may have some on the line today I know a lot of REO agents take it very seriously take it as a bolt-on to their business but realize that the quality of the BPO going out is going to be reaching some of these folks who are making decisions and if your name and your number are on those bpos yeah it's a possibility they might pick up the phone like they did with Janet and say hey you know what we've seen a lot of your bpos come through can you handle the reo's for us yeah and that's a flip side of where you know the argument of like Nathan says go back to the seller and say your valued way off yeah and it's like here's my BPO and it's like a battle of the bpos right um as most people know I do my darndest not to order BPO unless I direly need to and that's because I don't have anyone in a local area a lot of parts of Texas are very rural it's real hard for me to get agents down there but so let's flip it for a second sure good new investor would you percentage-wise how often would you trust ordering a BPO and is there an alternative way say to find out a value a knowledge about the property area that may be different from ordering a BPO that may be more successful yeah yeah well one thing is sometimes I'll order BPO if it's in a suburban area okay because I think as we were talking about earlier you know you get out in the country and you get out in the woods your comps might be 20 25 miles away okay and my one some of the comps might be across a river you know some of those larger border type things will affect evaluation yeah okay um if I'm in a Suburban or an urban area where I know that there's going to be comps within half a mile or you know five blocks heck yeah you know if I need a if I need a good solid pinpoint valuation then I'll do it but the other way around is if I've got a two-year-old BPO that says you know it's worth a hundred thousand bucks and I'm not real worried about it because that note I'm investing in has a price point of twenty thousand and this thing could fall 50 percent and I still wouldn't be worried so yeah you know it all depends on what you're what you're looking to buy what the valuation is and what your investment is to the value the higher the investment the value the more I'm going to really consider getting a BPL so in that case if it's an older BPO um and like you say there's a giant spread and I've certainly seen those in that case I'll take it but I'll still call that agent and just let them know what I'm doing first of all because I would certainly it's somebody that I can use potentially oh absolutely yeah lean on real estate uh absolutely professionals you know heck you don't just have all kinds of contacts absolutely yeah absolutely and you know one little trick that you can do okay I don't know if you know where hudhomestore.com is it's a it's a HUD property you know the government HUD that's where they list their properties for sale okay if you're in a Suburban or you know a fairly populated area look on the HUD home store and see if somebody has is a listing agent for HUD give them a call and say hey if I I'm looking at this property in this area it's a three bedroom two bath if it was in REO condition it doesn't have to be great you know do you see this going for eighty eight thousand dollars and typically they'll tell you yes or no because they're probably pretty experienced in that area so um Ivory Hill comment uh I said to Nathan and I was a little bit Landing I agree I appreciate you chime in here they said he did his uh Masters in the subject of bpos um and that even though agent may get the order they may send to the assistant depending on the uh the fee right and at the Quality report ends up being determined how much that money is going to be um that he had worked for um I guess some kind of government agency and that they would not most of his work was in for courts and the district would not allow bpos be used at all uh okay I guess it's because of the history of it of bpos being sometimes fine sometimes not in the in court you need factual all the time um that's one of the things I stressed on is that I know HUD very well um and what we used to do is we used to go to Zillow too and find Oreo agents listed a house for a bank and get their information which is why I went to the process of saying okay how can I collect all this data and compile and then put into the portal like if you're looking for an agent you can put 15 properties and every agent that pops up is an already Allegiant because Oreo Edens typically are not doing bpos some are some aren't right right those agents have a real estate knowledge in a directory of contacts trash clean outs let me look at that BPO agent would never have or wouldn't bother even to take the next step REO Asians typically want to get on the phone with you and just talk for a minute and the great thing about it is you don't got to explain on what you're doing because most likely they already know what you're doing yeah that's true that's true and they could be a huge resource for you yeah okay uh typically an REO agent will know about whether the county or the municipality needs vacant property registration or you know um maintenance and upkeep on the sidewalks in the snow things like that okay those REO agents will be familiar with that stuff whereas you know I'm down here in South Carolina I'm in Charleston I deal with snow once maybe every three years okay whereas Chicago if you've got a property and you don't shovel the snow there you know you might be getting looking at a fine who knows in Chicago no no it can't happen you know the other trick I've done making tell me if you would do the same thing is looking at other Real Estate Investors right reaching out to an investor local to the property and saying hey can you give me help may they not be able to give you factual data but they would give you some local knowledge like hey that's on the other side of the tracks or that's near really good area to the pocket of area that's really good that's inside that area that's a Golden Ticket don't worry about the comps because that those four streets at a property in Trenton New Jersey are amazingly golden for whatever reason yeah and that local investor you can kind of get knowledge of it that you would never give a VPO sure demographics is as a solid key um you know as far as asking a real estate investor you know what the valuation may be I'm not sure I would go that far with a Within investor but I would definitely ask them hey you know is this a gentrifying area is this a place where you know people are going in buying up properties rehabbing them and flipping them and reselling them you know that will give you an indicator of whether it's a good strong demand in that area or if it's just something that maybe you ought to stay away from because uh you know there's not a lot of spread there yeah so it's amazing that we trust these bpos to be golden but there's so many holes in it that it depends on that agent um you know if you were to find an audio agent that you trusted would you prefer to talk them directly or order BPO to get second opinion I'd definitely talked to the REO agent that's comfortable with that area yeah and and ask them right from the horse's mouth because uh again you know you don't know whether you're getting a brand new REO I mean a BPO agent yep you know because people there are people who sign up for these uh uh BPO services and they may have been doing them for three months you know that's just trying to learn like hey just go ahead and do these things run AVM take a couple pictures and we'll pay you some money right right exactly you know or maybe there's somebody who says hey you know what I'm just going to look at the tax records and see what their appraised value is and I'll bring in the comps around there yeah no it doesn't work that way you know you can't really having that conversation is really key I found um I found both ends of the spectrum I've have I've had uh BPO agents that were REO agents that were you know well into their 60s and and 70s that were a wealth of knowledge and it's stream experience on the other end of that Spectrum I've had the 30 old uh you know guy that's hungry and just is looking for business and and he'll go the extra mile because he's trying to prove himself so I've had it all over the map and so having that conversation is really really important it really is I mean there's nothing like a good relationship with a with a you know agent with boots on the ground yeah it's amazing because they have not only do they have the values they can tell you but they also have the connections which are huge right yeah and that's one thing I I always surprised by people who are bpos because then you need more you need more information you're like oh wait I need to know you know thing like that I I'm curious to when you are looking at these bpos and working with the agents with that um are pictures different do you do you find that you take different pictures because you have an investor mindset versus REO other bpos or or pictures based on the order pretty much take a picture of the street label take a picture of the house take a picture of the roof kind of angle right no that there's they're very very um systematic okay okay so it's a left side of the house front right side of the house address verification to Street you know Street looking each way okay and if there's something that needs to be seen then you can add extra like you know is there well we just did one yesterday okay um there's a substation within 300 feet of the house and it's a big electrical substation you know and a lot across the street had all kinds of what we call personal property and debris okay boats on trailers and just coolers and trash and stuff like that that's a that's a big big issue you know so you take a picture of that as well because it affects the value or the perceived value of the property from the eyes of a buyer yeah and I know makeup talk to you about before my two steps is I reach out to all the investors I have local to a property based on and I also call reach out I have my portal where I can find age audio agents and I email them call them whatever I can get a hold of them because I'd rather trust in REO who's busy and say Hey listen give me 30 seconds what do you know about this area and if you can fill out some more information later great but the audio Even's like listen don't don't go this area we can't get contractors I mean like that's another piece the puzzle where like you can't sell contractors I don't care how good the value of the property is if you have been doing work on it you're kind of in a bad spot or it could be like listen there's a Walmart going down the street or a Boeing's moving in right and this property that is going to go up FYI that's right I was one of the caveats that I ran to and you have to be really careful when you do these phone calls is that you just be careful how you were this stuff if you do call agents um I did run into a time where I called an agent ended up being a sister-in-law the borrower um but if I wanted to be po she probably would have gotten anyway and it is where it is right but um it was good until like oh that's my sister-in-law's house that's my brother's house what's going on I'm like listen we don't know what's going on we just look and this is oh no he lost his job and he just got a new one he started working two weeks ago they're probably gonna be catching up oh cool good to know good to know inside information yeah it never hurts to pick up the phone call and talk to people yeah it really does are there times where in your job doing bpos or even valuing properties that you find it's extremely difficult besides the strange properties where it's just you just can't value it well yeah and what do you have you do the very best you possibly can and just remember what you're there for okay given an evaluation based on like properties with like demands okay I mean it doesn't just have to look at look the same all right some of the stuff that we keep into consideration is you know some people like an HOA and some people don't they don't like subdivisions with HOAs so if we're looking at a property without an HOA and there's not very many comps within that area okay we stay within the same county same school district if possible without an HOA okay and we try to catch as many parameters as possible to try to get to try to identify the valuation based on some of the demands like no HOA and within that school district sure yeah so I mean it's it can be very difficult sometimes and you know I mean when you when you hit a property with a double wide mobile home on 37 Acres now we're looking at a thing where we're going to have to do some adjustments yeah yeah it's crazy you know um it's amazing yeah that we're doing it yes Nathan sorry um I think for me knowing what I know now I'd rather work with an Oreo agent and an investor and get their mindset where things are um one of the ways you do it we actually have a Facebook directory uh into our portal you can find other investors please don't blast email people there's there for to connect with people who live in a certain area to find to network with them for no investing in a little local to you but also if they live local to a property use that directory or post in a Facebook group find people local to that property and you're going to get information they may know I may reach out to you know Mickey he's not an REO agent he may say listen Dave here's my value but my buddy here is an agent let me call him up he'll pull some comps local to the property and you get better knowledge you should also get when you hook up on an investor and if you have some relationship with them they'll go out and take pictures and give you kind of a sense because most investors live 10 minutes from the property yeah absolutely and some of these small towns here's a little thing I uh I learned from our Mentor okay he told us one time if you're in a small town and you got really nobody to work with call the fire department um call the fire department because the guy's right there at the fire department love to help people they know the town very well and chances are they're going to be driving by that property it just have them stamp a few pictures and tell them Hey listen I'll send uh 30 40 bucks um into your uh Fireman's Fund you know if you can just send me um some snapshots of the condition of the property and just give me a little bit of information about the area yeah they're usually pretty happy to do so I did that in Marysville Ohio and the guy was just ecstatic wow sounds cool so what would be your advice you know make does uh teach at node school and stuff like that as well what would you what would you give the advice to somebody um who's starting out and getting these bpos what should they watch out for um what should they do you know they may not have the network we have um but should they be looking at any part of that BPO the notes the pictures that really kind of tell them listen back off or jump on it right uh yeah yeah you use your not you use your common sense and logic okay um great question dude great question I mean because that that's pretty much the meat and potatoes of looking at a BPO as I said before you know you're looking at the BPO to to gauge your value evaluation but you should also be evaluating that BPO to see if it's something that you can rely on yeah I look at a BPO as establishing bumpers high and low okay I'm not gonna I'm not going to get a pinpoint valuation but I'm going to establish pretty much a high and low off this BPO okay look at your comps and what you're comparing to you know are you looking at a uh a two-story well-maintained home versus a single story Ranch okay sometimes that's acceptable sometimes it's not you know again you know are you looking at a three-story uh house versus a townhouse no you don't want to you don't want to establish single-family detached from single family attached make sure you're comparing Apples to Apples okay distance wise okay are you within the same county or within this game School District things like that start looking at it look at the BPO as a whole as all kinds of different data points that you can look at and say okay is this quality work or was this just slapped together to to make 50 bucks okay unfortunately yeah that's very true yeah it's it's crazy you say that but you know looking at bpos for hours it gets mindless um and most times because the information behind it and the money is not worth it right if you're making 25 and you're assisting you're brand new you're not putting a lot of work into this no no I count on the pictures to be my most important factor it's a roof damage or the house looks like crapola or there's a car in the driveway right tell me this number former may have something there right um and get a hold the agent find out if they did any kind of walking of the property at all right did they take a peek in the backyard is he see any activity right with someone mowing along um right the car parked and running you know um those kind of things it to me it's extremely important to know um Nathan when you look at bpos somebody are these so many things you look at or is anything you yeah definitely I think the most important thing is probably the pictures probably the second thing that's most important is the comments that's that's the second thing that I'll go look at uh and then I'll I'll scroll back up yes closer to the top and then I'll start looking at the comparables and see how true the quality of the of the comps are they you know like we say are they 25 miles out or is this around the corner you know half a mile um and that makes a huge huge difference and then again what type of property is being compared and I start looking at it like that um because you have to and and I get it I totally get it like yeah there are agents that are just doing this because they're bored and they need 50 bucks to go and buy dinner or or there's other ones that use it as a tool to get future listings and I'm looking for the ones that are getting the future listings so I that's how I evaluate it the last thing I guess the first thing because it's on the first page I'll see that number and then I'll scroll through and then I'll come you're really looking for that Eyes On The Ground yeah the pictures the eyes of the ground you know comments roof damage whatever damage I'm not there and I'm not gonna be there sorry I need some information I think if I can recommend makeup you can tell all these big BPO companies please don't tell me what you think it is yeah right just show me roof appears to have damage on it right it appears don't tell me more like I we often get like well this appears to be on just show me the facts let me determine that knowledge right it's so often that they go to the next step and it's like listen tell me what gave you that thought that the household the house is not occupied well why what was it given right what was there they told you was notified versus blanket um roof looks damaged that doesn't tell me anything like roof here on the left side has a appears to have a hole in it okay let me determine if there's a problem with it yeah yeah right drone beginning um in the beginning I I used to give me great anxiety to hear uh an agent say oh it's it's in rough shape and I would go Oh shoot that's terrible you know and then yeah as time got on I'm like well what does rough shape mean yeah you know what rough shape to one person is yes nothing to another and yeah and vice versa so yeah again I'm looking for the facts I don't care about your opinion necessarily I know it's called the broker's price opinion but just tell me the facts and I'll determine how how rough is rough yeah that's right that's right it's amazing how many photos we get back that's a rough shape yeah no no it's not no you don't know rough no you know especially that that that REO agent has done well for themselves and live in a nice house and they go to like a little twenty thousand dollar house like this is a rough shade like no it's typical for the area right yeah that's right actually yeah and I've used most of the age inside when I what I do in my system is I go to my portal I put my address in I get a hold the agent I get the value I often then pay them to go out and look at the property well that's my payment to them that I I they don't charge they don't get money for the quick value give me your local knowledge give me your ballpark figures is it a good area is it on the right side of the tracks give me some knowledge I'll pay you to go out and look at the property and then I'll tell them listen when I if and when I take this property back I'm gonna be calling you to be my leverage to sell it to re-key it whatever even I also use my Asians to drop off paperwork to borrowers hey can you reach us and they're they knowledgeable they understand the business they're not BPA agents they're not real estate agents they're Oreo they know the fact that Banks do this yeah right absolutely and they're willingness yeah and they're willing to put in a little bit of work because they've got a long-term view I don't want the the guy that's thinking about today I want the guy that's thinking about three months from now six months from now yeah an audio agents will offer you usually they're adept very very good at offering and TR and negotiating with people for cash for keys or deed and Lou or any type of workout we can typically help people with that um just being boots on the ground being able to sit at somebody's kitchen table and explain hey you know this is going to foreclosure we're the last friend you have here in this process and if you're gonna dig in your heels and say no I absolutely refuse well you'll be walking out the door with the sheriff on each arm and you'll have nothing versus you know thirty five hundred dollars cash for keys to help you get a fresh start sure so those are just the type of things and all those things yep exactly exactly it's a people business it really is a single person business yeah so just to recap bpos do work I know I'm a bad person I hate bpos but they do work and you know for people who are doing Mass amounts of properties I get it bpos are important to those people you know the hedge funds need bpos because they can't get what we do but if you're looking to buy one or two properties one of the best strategies you can go to our portal get ruins you go to hotgate agents go to Zillow get agents um and don't meet each other one you're gonna have to reach out to more than one agent right email them call them reach out to them and just what you want to ask them is what is the knowledge of the local area where is this property at is it a tenant area is it a a homeowner area what is your thoughts about the the area in general I also asked for like what is the average rehab value of the property if there's arv on it um also also that's for rental what would be the average rental for this area um and then lastly any comments whatever and I I'm not I actually have on my on my website a private site where I actually offer them to upload AVM and I tell them I will reach out to you to get more clarity ended to have some kind of feed for service for you to give me some more information and have a relationship but it kind of weeds out those may be busy uh may not be interested but these agents do more than just connect with us um they become our life set of that local eyes and ears on the ground um you never know what they can come up with being local yeah sure sure and typically a agent like that will have a network of people who are looking to buy so yes if you have a uh property there that you know you just want to unload it you you bought the note real cheap you got it through foreclosure and said hey you know what I'd be willing to sell this to an investor at a wholesale price for 75 grand typically that agent will be able to identify a few uh investors in that area who will come up with cash sure yeah awesome well um before we let you go I just want to remind everyone uh if you send the email I'll put a post up hopefully before the day's over uh September 20th me and 8th will be starring our Junior Mastermind group um I know Mick and I have talked intensely on our weekly calls but I hope those who are interested to jump into some of that um Nathan and I doing this for a long time but we'll also be bringing the content and stuff right these kind of things are really important to investors and you can't Overlook it and just depend on the seller's BPO I'm gonna tell you from a fun level we've ordered multiple bpos just to give our sellers the buyers a higher value to sell that property so you really want to get your own value um you can pull your own comps and do all the stuff but getting the eyes and ears on the ground in property condition is key to know what's going on right if that property is occupied it's really in bad shape do you want to get into that world because then you may be doing rehab most likely person can't even afford to modify so if you're looking for a non-performing flip it's probably some gamut there and if it's vacant that's a huge thing too um it's a ton of mail sticking out the mailbox or another little trick if you have good look at the meter if the meter's not running probably not occupied or if it's not there yes yes or even shut off take it on your in the water right those are the kind of things an audio agent would do where BPO agent typically won't do unless they're sophisticated and they know what they're doing but again they're not making a lot of money on this you know on these 25 to 40 depending on the person yeah you know due diligence could be an art yes yes definitely um but I I definitely sorry I'm distracted I'm trying to see if we can get Ben on uh but I'm not hearing back from so um we're trying to get Ben on noteworthy again is to be uh the end of September 21st uh I'll be flying in there 22nd 23rd I'll be uh talking um the day before me Nathan will be running our thing and then Nathan will be in California so if you're gonna be out in those kind of areas um please feel free to say hello uh make our you're gonna be talking soon too right you're gonna be talking a note uh uh no are you speaking down Dallas no no no I thought you were my father's are you doing anything publicly at any time soon um I would love to get our uh our note meet up type uh meetings around locally here again awesome get them started um you know we had some great success with them and where are you guys just for the people who don't know where you're at give up oh we're we're in Charleston South Carolina nice and uh we're up in the North Charleston area and if anybody wants to reach out to us uh uh you can look up our website at ktifinancial.com that's kilo Tango Indian um financial.com and if you have a property near you don't order a BPO call makeup make connection pay him some bucks get a real value I mean that's right it's the way it is you know again it's awesome too right do you know it so thanks so much I appreciate you coming on spend some time with us this Friday afternoon hopefully you get better weather than me and Ethan getting up here it's getting a little chilly up here put a long sleeve shirt on and whatnot so uh yeah I appreciate jumping on for a little while and just chat with us all right my pleasure thank you guys it's always great talking with you you bet that was great you bet person foreign from jkp Holdings this week Nathan Turner and I sit down and discuss one of the most crucial parts of due diligence for note investing and real estate investing property values most investors order what they call BPO a broker's price opinion and they count on it for accuracy unfortunately not all bpos are accurate and most of the time they aren't and most of the time aren't filled out by Brokers so what we do in today is sit down with Mick [ __ ] who's a BPO agent but also a real estate investor so he knows both sides of it we break down what to look for in a BPO how do you know if it's accurate at all how do you know if the agent who did it actually knows anything and if you listen at the end you're going to find some tidbits of how we do things to improve accuracy reduce costs and actually get some local knowledge so enjoy but we also have some really exciting news that if you haven't seen it yet we put our email like last night um we'll be posting more about it and we're sorry a little bit late on things just August got away from us um starting on September 20th where hopefully that date will be in stone uh we'll be hosting a 10-week kind of a junior Mastermind group we'll be hitting topics every single week and Diving intense this is for people that are have take a beginner course have some knowledge about notes right and are looking for that in between stage right where you may bought two or three notes and just find yourself lost or took a beginner course have a good grasp of it but want to go to the next level um so you'll be networking with us learning from us but also networking other investors that are going to be in the same kind of level as you are this isn't for those who've done 40 50 deals this is more for those beginner slash middle Advanced people um and we'll put the the link in the bottom but it's on my website and everything else and our emails went out yeah maybe you took that course and you thought oh this is really cool but are still a little bit nervous because you just you don't feel like you've got it we're going through all kinds of different scenarios all kinds of different things uh including homework yeah you get some of that experience as we do the course so that you can you can get out there and our our focus is confidence being confident in note investing and buying right um taking the basic knowledge taking the next step and then circumventing with the network of people and we're also going to be sharing resources and tools that neither one of us has ever shared publicly right um so it's gonna be really cool so if you're looking for that stuff that you said Dave have you asked for it or Nathan and we haven't well we'll be unlocking some of that most of it uh during this course for those who jump in there so definitely take a look at that um we got some people tuning in from Bobby Quinn some some Colorado people feel free to put chats uh in the chat box if somebody were on LinkedIn some people on Facebook group some people on the Facebook page I'm trying to juggle it all so hopefully I don't get distract him well yeah all that no investing due diligence is probably one of the more difficult areas of node investing right and understanding all that um you have the tape data figure out your bid they have the post which is managing which is also struggling but your due diligence period is a few key items right in a short time yes but you've got to get it right yes there's it's it's not to put any pressure but you got to do it right and if you don't do it right you can get hung and and into some trouble so you have some things like the the data on the property right you have the numbers which you can figure out then you have the on E which is your collateral title report oh it is you're knowing the fact of what what the taxes are what liens on the property you also have the collateral file make sure it's secure and also but there's one little big feature that we're we're discussing today which is the value of the property um in Industry standards is to go get this thing called a broker's price opinion other words a BPL so we're gonna have this discussion Dave and I if you don't about bvr no BPO or or the validity of that document uh that report um I do I I'm a big BPO guy however it's I you can't take it to face value and that's part of what we're going to be talking about yeah I think for me understating BPO does make a difference right we'll be talking to Mick today um about this let me bring him in um to the to the fold as we uh discuss this world of valuing a property make it was part of our weekly Mastermind group and he mentioned that some I didn't know about him there was a BPO guy but before we get too far make Welcome to our Friday show and can you share a little bit about who you are how did you be coming to real estate in general give us in your background sure sure hi Dave hi Nathan and uh everybody listening hello how was everybody uh well Janet and I got started actually my wife Janet um that started in real estate in 1999 because we bought a house and we moved to South Carolina and we bought a house and she saw the closing statement and said my God that's a commission I can you know I can do this I know I can do this so she went and got a real estate license just like you know I'm sure a lot of people do the same thing um you know back then you know the market was really seriously hot and people were selling things but Janet didn't want to jump into the uh traditional real estate market so to speak which was driving customers around showing houses and things like that what she wanted to do is basically work desktop type of work okay and she found um a company that told her about bpos and they said all you know they're basically uh very informal almost appraisals but they're not they're they're just price opinions based on the data that you have in the market so she started doing those and she did enough of those well you remember back in 0708 what was coming down the road okay so she was doing those reports and a lot of those reports were done for some of the big Banks and lenders who were looking at a tsunami of non-performing notes coming down the pipe so make a long story short some of these reports got into the hands of these people um in the big Banks and they called her and said Hey listen can you handle the reos for us and if you know my wife Janet she is one of those people who says absolutely I can handle a hundred of them and then we figure it out yep okay and that's exactly what happened is um the REO and the BPO business you know just like the no Community is not that big so um you know when you do a good job and you recommended you usually get recommended throughout the industry and pretty soon um Jenna had customers through HUD uh Fannie Mae Freddie Mac Bank of America and so many different other customers that that we just boomed all the way until 2012.

and we were at the height in 2017 but Janet also knew that that ride wasn't going to last forever sure so uh we started looking and we found notes and we shifted over to the node industry and and learned about the node industry and it kind of dovetailed into what we were already doing especially with due diligence and vpos that's right so um you know bpos became part of something that we do we still do to this day wow well actually Jen's probably still working on a bbo right now but we do we complete bpos every single week sometimes they're listing bpos for properties that we list and sometimes they're fee based bpos is they're companies that pay us to do the ppos so um we do those consistently and we've been doing them for a great number of years and uh uh you know they can be interesting for sure so this is the debate is what what's a good BPO versus a bad PPO we're jumping right into the five oh yeah let's quickly for those who may not know what a BPO is or have ordered them and never looked at them right can you give it a summary of what would they expect on a typical BPO certainly certainly um you know a BPO company will send out an order to an agent and they will ask for the type of valuation that they want okay sometimes they'll reach out and they'll say we need a distressed property evaluation sometimes they'll say we need a fair market valuation we need it based on 120 days in the past or you know you can go back six months in the past they'll tell you a lot of the parameters that they're looking for so it's it's not like it's just a huge report and you got to try to narrow it all down a lot of these PPO companies will give you the parameters that you need to stay within and sometimes it's tough sometimes it's not okay it depends on how Suburban or rural the property may be you know you may have to exceed some of those parameters but a good BPO versus a bad BPO okay one thing to remember is you're not just using a BPO to evaluate the number the you know the the conclusion of the BPO agent the value of the property okay yes that does make a huge difference to you the person who's evaluating that property but you should also be evaluating the BPO okay look at it see the the proximity of the comps okay are all the comps within one half mile in a suburban area okay if they're you know if there's one or two of them that are like five miles out in a suburban area yeah you may want to just kind of give it a another really solid look and why would I typically why are some bpos have that why would why would an aging go outside that area that's a great question sometimes see BPO companies have their own valuation softwares built into these things okay and if it's something exceeds their uh tolerances they might say no we can't use that one or their quality control people will kick it back and say you know you took a double wide mobile home and compared it to a single family house we can't do that right okay we need you to find another suitable comp so instead of going back in time which is one of your parameters you have to stay within 120 so the best thing to do is expand it out distance wise and try to keep it as close as you can so that you get a better indication of today's value okay um so you look at your proximity you know to the comps are they fairly close and I just touched on another another piece right there just a minute ago okay look at the properties what are they comparing it to okay are they Ranch houses compared to Ranch houses that's right okay we've seen bpos come through where Ranch houses were compared to Double Wide Home Mobile you know manufactured homes yeah big red flag huge red flag okay if you see that really question that BPO Okay so we've seen it before um and people that are new maybe have not seen this yet but but we've seen that where a seller of a note will provide a BPO right and then I get my own BPO and they're very different yes how how can that be and we get into this argument of well my BPO is better better but how do we reconcile that like well first of all why and then how do we reconcile that okay well when you get multiple bpos and there's a wide range of valuations okay why look at the comps that they're comparing to you know um is there an average condition house that that is the subject are they comparing it and evaluating it off of nice rehabbed homes within a mile okay now you've got a difference of condition move-in ready versus average condition you know uh you're going to have an inflated value yeah now look at the other one maybe another BPO has average conditioned comps versus the average condition subject now you're looking at more of a of a tighter valuation I'm not saying your pinpoint but you're at a tighter valuation because you're comparing Apples to Apples instead of apples to oranges so in the case where they're comparing it to a fair market is that because that's just what the agent chose or was that an instruction that they received typically it's in instruction okay at the beginning of the instructions you know there's an instruction sheet that they send and it's basically States if the property area is being driven by REO or distressed properties then let's use distressed properties but if it's a fair market area where most of the transactions are being done in a fair market way with an arm or arm's length transactions then start using those fair market comps yeah but if you have to use REO explain why okay is the is the property in lousy condition well some REO properties might be in similar condition so you might want to use those which are to to you know compare to the property so one of the first things I do when I get a BPO and scroll down to the pictures I want to see the property I want to see and I look at the comments the agent often puts inside of them right right now these are typically ones that the sellers provide to me to kind of get it a feel because I know when we work the hedge fund we ordered multiple bpos for the same problem they ordered two one from different companies right and we usually ordered a selling BPO too so when we want to boost our the value of the property to our the end note buyer exactly we had a high BPO that was and most people didn't bother to order one because they didn't want to spend the money to buy a BPL they want to use it when I have and kind of find out that that value me wrong um right is there a way when you look at these bpos so you can without diving too deep know the quality of the person behind it versus somebody who went there took four pitches of the property pulled a quick AVM from their system and did nothing else and spend four minutes on the project and rightfully so yeah this is my part B question what answers first the BPO cost me 100 bucks on average how much is the agent who's doing all this work that we depend on making of that hundred bucks oh man I'm telling you this is a sore spot in the industry okay typically anywhere between 40 and 65 dollars is typically what the BPO agent will be doing and some folks are you know they they run a operation based on that they'll do bpos and just get large numbers of them okay and that's going to be a copy and paste and just throw it in there and let it go what you were just talking about Dave is the comments this is how you can tell whether some an agent has put some time into the BPO look at the comments how in depth are they okay if you've got the same exact comments in 10 different fields of that BPO you know it's just copy and paste and hurry hurry hurry but if you've got comments in like comp one is inferior due to uh gross living area um smaller garage and smaller lot size I adjusted you know six thousand dollars for this okay that's more of a detailed comment in there and you know that they put in some time and effort into doing the research and coming up with a really good valid conclusion versus just spitballing it yeah interesting so I I one of the things that I do a lot of the time especially if it's a BPO that was provided by the seller is I'll take that BPO and I'll compare it first of all I'll compare it to whatever online research that I've done if we're way far off already that's a red flag yes um even if they're close though a lot of the time probably maybe not always but a lot of the time um depending on how what the numbers are and how comfortable I am with the spread all those kinds of things but I will call uh whoever did the report and I'll and and I say right up front I'm not trying to sway you one way or another I'm just looking for accuracy so can you just tell me about the property tell me about the neighborhood how's stuff selling you know and and get most professors don't know they could do that on the BPO shows the agent's name that's interesting true and everybody's got Google so even if you don't really want to call that agent maybe you're not comfortable doing so call another real estate company in that area pick up the phone find somebody who's been some new tricks that you know we're talking online but yeah for the BP of those people you have your souls on top your your for sales you have your solds right I really don't care about the for sales unless something's changing an area I don't care what someone wants the house I care about what this and I focus things like the area square footage GLA I look at the fact of you know the the bedrooms bathrooms I don't care how many rooms it has I look at those kind of big things and if I see a 3-1 when I have a three three or four two I kind of diminish it because I don't know how much a bathroom in that area is worth another thing I look at is if that agent is not from the area that's a big thing to me unless an agent is good and they drove 40 minutes on property I may be interested but if there are BPO quote unquote typical BPO even who's just making 40 bucks kick and don't know anything about real estate you know I feel from my point of view if the agent isn't local the property they're not going to know much about the area yeah right then you're getting a BPO based strictly on data strictly and that is Market um dependent okay it doesn't say anything about the agent being able to choose different comps okay it basically they're just grabbing data saying okay based on this data this is what the valuation should be well they don't have enough variables in there that they're taking into consideration to be able to adjust those comps to the right ones which will give you a tighter valuation yeah I mean that that sounds like uh I'm sorry if I lost somebody there but you know it's uh it really does mean a lot when somebody like Peter saying Dave is is from the area and knows that market yeah you know one of the other things I find is I again uh if I call another one of the red flag uh items is if I call and I end up leaving a message and then they never call me back yeah huge red flag then yeah then I need some other I need somebody that I can talk to I need somebody that has seen the property that I can have it just like you said people there are factories of BPO agents that they're certainly their job is go out do four a day five a day six day make the money give the broker some of the money right because in your situation you're the broker and the BPO if you had a BPO person below you what would that BPO person make you think well typically it all depends on what the income is because um if we were agents say signed on to uh Keller Williams or uh weikert uh uh franchise okay those checks would be made out to the company correct okay and then typically it all depends on what the split is that you agree to with your broker I mean you know sometimes it's a 70 30 split sometimes it's a 90 10.

you know it all depends between 25 and maybe 40 bucks yeah yeah thirty five forty dollars you know and the funny thing was is when Janet started doing this she was with a uh a small local company and the the she told the broker what she was doing and he kind of laughed at her and said you just keep all of it don't worry about it well little did he know that she was going to be doing hundreds of them a year so nice good for her yeah yeah we just sitting on these bpos to give us a property value yeah from people who a may know real estate but most likely be you'd be in the in the Oreo developer are mostly's BPO agents investors knowledge about real estate or are they Plug and Play people what's from what you've talked to what are majority of people there a lot of the people that we've run into who actually are BPO agents are real estate agents who are filling out the forms okay and I would say this is probably 70 30 split okay um they're folks who have seen bpos as a as an income Source something that they can do um while they're slow or not showing properties because you know you can accept or or decline them you know you don't have to take them so when you're slow you can accept bpos if you're not slow and you're out you know ramming the roads and and taking buyers or sellers around then you don't have to take them sure whereas I know a lot of REO agents and uh we may have some on the line today I know a lot of REO agents take it very seriously take it as a bolt-on to their business but realize that the quality of the BPO going out is going to be reaching some of these folks who are making decisions and if your name and your number are on those bpos yeah it's a possibility they might pick up the phone like they did with Janet and say hey you know what we've seen a lot of your bpos come through can you handle the reo's for us yeah and that's a flip side of where you know the argument of like Nathan says go back to the seller and say your valued way off yeah and it's like here's my BPO and it's like a battle of the bpos right um as most people know I do my darndest not to order BPO unless I direly need to and that's because I don't have anyone in a local area a lot of parts of Texas are very rural it's real hard for me to get agents down there but so let's flip it for a second sure good new investor would you percentage-wise how often would you trust ordering a BPO and is there an alternative way say to find out a value a knowledge about the property area that may be different from ordering a BPO that may be more successful yeah yeah well one thing is sometimes I'll order BPO if it's in a suburban area okay because I think as we were talking about earlier you know you get out in the country and you get out in the woods your comps might be 20 25 miles away okay and my one some of the comps might be across a river you know some of those larger border type things will affect evaluation yeah okay um if I'm in a Suburban or an urban area where I know that there's going to be comps within half a mile or you know five blocks heck yeah you know if I need a if I need a good solid pinpoint valuation then I'll do it but the other way around is if I've got a two-year-old BPO that says you know it's worth a hundred thousand bucks and I'm not real worried about it because that note I'm investing in has a price point of twenty thousand and this thing could fall 50 percent and I still wouldn't be worried so yeah you know it all depends on what you're what you're looking to buy what the valuation is and what your investment is to the value the higher the investment the value the more I'm going to really consider getting a BPL so in that case if it's an older BPO um and like you say there's a giant spread and I've certainly seen those in that case I'll take it but I'll still call that agent and just let them know what I'm doing first of all because I would certainly it's somebody that I can use potentially oh absolutely yeah lean on real estate uh absolutely professionals you know heck you don't just have all kinds of contacts absolutely yeah absolutely and you know one little trick that you can do okay I don't know if you know where hudhomestore.com is it's a it's a HUD property you know the government HUD that's where they list their properties for sale okay if you're in a Suburban or you know a fairly populated area look on the HUD home store and see if somebody has is a listing agent for HUD give them a call and say hey if I I'm looking at this property in this area it's a three bedroom two bath if it was in REO condition it doesn't have to be great you know do you see this going for eighty eight thousand dollars and typically they'll tell you yes or no because they're probably pretty experienced in that area so um Ivory Hill comment uh I said to Nathan and I was a little bit Landing I agree I appreciate you chime in here they said he did his uh Masters in the subject of bpos um and that even though agent may get the order they may send to the assistant depending on the uh the fee right and at the Quality report ends up being determined how much that money is going to be um that he had worked for um I guess some kind of government agency and that they would not most of his work was in for courts and the district would not allow bpos be used at all uh okay I guess it's because of the history of it of bpos being sometimes fine sometimes not in the in court you need factual all the time um that's one of the things I stressed on is that I know HUD very well um and what we used to do is we used to go to Zillow too and find Oreo agents listed a house for a bank and get their information which is why I went to the process of saying okay how can I collect all this data and compile and then put into the portal like if you're looking for an agent you can put 15 properties and every agent that pops up is an already Allegiant because Oreo Edens typically are not doing bpos some are some aren't right right those agents have a real estate knowledge in a directory of contacts trash clean outs let me look at that BPO agent would never have or wouldn't bother even to take the next step REO Asians typically want to get on the phone with you and just talk for a minute and the great thing about it is you don't got to explain on what you're doing because most likely they already know what you're doing yeah that's true that's true and they could be a huge resource for you yeah okay uh typically an REO agent will know about whether the county or the municipality needs vacant property registration or you know um maintenance and upkeep on the sidewalks in the snow things like that okay those REO agents will be familiar with that stuff whereas you know I'm down here in South Carolina I'm in Charleston I deal with snow once maybe every three years okay whereas Chicago if you've got a property and you don't shovel the snow there you know you might be getting looking at a fine who knows in Chicago no no it can't happen you know the other trick I've done making tell me if you would do the same thing is looking at other Real Estate Investors right reaching out to an investor local to the property and saying hey can you give me help may they not be able to give you factual data but they would give you some local knowledge like hey that's on the other side of the tracks or that's near really good area to the pocket of area that's really good that's inside that area that's a Golden Ticket don't worry about the comps because that those four streets at a property in Trenton New Jersey are amazingly golden for whatever reason yeah and that local investor you can kind of get knowledge of it that you would never give a VPO sure demographics is as a solid key um you know as far as asking a real estate investor you know what the valuation may be I'm not sure I would go that far with a Within investor but I would definitely ask them hey you know is this a gentrifying area is this a place where you know people are going in buying up properties rehabbing them and flipping them and reselling them you know that will give you an indicator of whether it's a good strong demand in that area or if it's just something that maybe you ought to stay away from because uh you know there's not a lot of spread there yeah so it's amazing that we trust these bpos to be golden but there's so many holes in it that it depends on that agent um you know if you were to find an audio agent that you trusted would you prefer to talk them directly or order BPO to get second opinion I'd definitely talked to the REO agent that's comfortable with that area yeah and and ask them right from the horse's mouth because uh again you know you don't know whether you're getting a brand new REO I mean a BPO agent yep you know because people there are people who sign up for these uh uh BPO services and they may have been doing them for three months you know that's just trying to learn like hey just go ahead and do these things run AVM take a couple pictures and we'll pay you some money right right exactly you know or maybe there's somebody who says hey you know what I'm just going to look at the tax records and see what their appraised value is and I'll bring in the comps around there yeah no it doesn't work that way you know you can't really having that conversation is really key I found um I found both ends of the spectrum I've have I've had uh BPO agents that were REO agents that were you know well into their 60s and and 70s that were a wealth of knowledge and it's stream experience on the other end of that Spectrum I've had the 30 old uh you know guy that's hungry and just is looking for business and and he'll go the extra mile because he's trying to prove himself so I've had it all over the map and so having that conversation is really really important it really is I mean there's nothing like a good relationship with a with a you know agent with boots on the ground yeah it's amazing because they have not only do they have the values they can tell you but they also have the connections which are huge right yeah and that's one thing I I always surprised by people who are bpos because then you need more you need more information you're like oh wait I need to know you know thing like that I I'm curious to when you are looking at these bpos and working with the agents with that um are pictures different do you do you find that you take different pictures because you have an investor mindset versus REO other bpos or or pictures based on the order pretty much take a picture of the street label take a picture of the house take a picture of the roof kind of angle right no that there's they'r....