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Show Summary
In this episode, Mike Giampa shares insights from his career in the real estate appraisal industry. He discusses how to get started as an appraiser, the certification process, and the importance of building strong relationships with investors and clients. Mike also highlights niche opportunities such as mobile home parks and RV parks, while explaining how market trends influence property valuation and investment decisions.
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Investor Fuel Show Transcript:
Mike Giampa (00:00)
No, just because the industry is really trying to get away from using appraisers. Something like 30 % ish of new sales are used with what are called waivers. They don’t even need an appraisal. So there’s a lot less business for a lot of people out there who don’t specialize as it is. I tell people who solicit me,Dylan Silver (00:17)
Hmm.Mike Giampa (00:27)
They found me, I’m a trainee, I’m looking to get into it. I tell them, you’re not gonna make a dime for a couple of years.Dylan Silver (02:07)
Hey folks, welcome back to the show. Today’s guest, Mike Giampa, is a court-trusted certified real estate appraiser and licensed broker who’s been dominating the DC, Maryland, and Virginia markets since 93. Thanks for joining us today, Mike.Mike Giampa (02:20)
Thank you, sir. Happy to be here.Dylan Silver (02:22)
Now, when we talk specifically about building a business in the appraisal space, it’s an interesting niche to be in, right? Because I was talking to you in the green room, oftentimes people might look to another niche or another segment of real estate, but of course, every home that’s sold pretty much needs an appraisal, right? How’d you get started in the appraisal space?Mike Giampa (02:46)
In 10th grade, my guidance counselor came to me and said, we have a new program we’d like you to ⁓ do on our new PC and figure out what your possible career path will be. And he came up with two possible answers. One was a coroner and an appraiser. And basically, it came down to, I don’t want to have a boss, but I want to be left alone. ⁓Dylan Silver (03:07)
Ha ha!Mike Giampa (03:15)
But of course that’s silly because every person I talk to is essentially my boss. Everyone, all of my clients are all my bosses. So that didn’t really pan out. ⁓ And that summer, my friend’s oldest brother came home from college and he was an appraiser and he’s telling me how great it was and brand new at it. And I said, well, I just was told at school, I should do this. So I’ll look you up when I get out of college and.He hired me, mentored me for years and went off on my own and it’s the only real job I’ve ever had.
Dylan Silver (03:49)
Now, did you getstarted in one of those areas? it DC to start or Maryland or Virginia?
Mike Giampa (03:57)
⁓ no, it’s just Northern Virginia. office was Loudoun County. So I just drove to his office.Dylan Silver (04:04)
Now, if we can, I’d like to ask about what it’s like getting started in the appraisal space. Of course, it’s gonna vary by state, right? But from what I understand, there’s an education and then there’s a certification or a state test that you have to pass. But then of course, there’s also building your book of business and those relationships where people know you and you’re their trusted appraisal.Mike Giampa (04:29)
Yeah, it’s pretty much the same nationwide. It’s either 1,500 or 2,000 hours of experience once you get your first level of appraisal as your licensed residential. That’s 87 hours, I think, of classroom time. After you get your appraiser trainee license, then you go for yourlicensed residential, that’s I think like 750 hours to get that. And then once you’re licensed residential, still no one’s to hire you because you don’t have any experience. You really can’t do anything until you’re certified residential. And then some lenders will say you need three years of experience. So it’s like five years down the road if you started today. That’s why no one goes into this business anymore.
Dylan Silver (05:28)
Yeah.Mike Giampa (05:29)
Considered a young guy and I’m 56 the people who I I know and do this are older too much older than me and are fading out so You’re mentioning earlier in the green room. The difference is the day you get your realtor license You can sell the White House the day you get your appraiser license You still can’t do anything. No one will hire you because there’s everyone once certified residential onlyAnd that’s the top residential you can get. You can appraise anything, certified residential, licensed residential, you have a million dollar cap.
Dylan Silver (06:53)
Now, you mentioned, you know, there’s going to be some level of experience that lenders are looking for when they’re selecting an appraiser. How much of a factor is that as far as scaling a business? I’m thinking like if you’re starting out and you’rean appraiser with no experience, you’re gonna have to be working under someone else. And they’re gonna have to have maybe a surplus of work or lots of work in order to justify bringing someone else on. Because during those first couple years, you know, you’re in many ways, it sounds like you may be more of a liability than an asset.
Mike Giampa (07:30)
Yeah, there’s there’s so many different types of appraisals you can do versus selling selling a property. If you’re selling residential, you know what you’re doing. You can figure it out relatively quickly. But residential appraising, there’s there’s condos, there’s land, there’s residential, there’s private work, which is there’s so many different private appraisal you can do for people for different circumstances that you need special training.for IRS, for divorce, retrospective. It takes thousands of hours to be competent to do the entire role of what a certified appraiser can do.
Dylan Silver (08:15)
Now, I would like to askyou about working with investors. I know a huge part of any investment strategy, especially, I can speak from experience in the single family space, you’re banking on that appraisal, right? You’re banking on that appraisal for where you’re going to exit the flip at or where you’re going to refinance, et cetera.
you know, how much can investors, you know, develop a relationship with an appraiser, an appraiser to say, Hey, you know, this is kind of the, the, the avatar of property that I’m looking for or my buy box, you know, is, is this something where, you know, you can advise me like, Hey, this area, you might find properties appraising for here, or is that really more the work of like a realtor, the realtor should be able to advise them as far as appraisal values.
Mike Giampa (09:02)
No, that’s actually a great question and probably the most underutilized part of your job or what the people you deal with and the people who I am. can have an appraiser if you’re busy in an area and you work with that person enough that you develop a relationship. Someone could call me up and basically say, I have a property I’m looking for over here’s the address.I need a quick answer. What do you think really quick would be as repaired value on this property? I could tell them in as little as 15 minutes. Yeah, well, I could give them a range. I could give them data. Give them data on what similar homes in that area sell for. Anything more than that is considered an appraisal.
Dylan Silver (09:45)
Yeah.Mike Giampa (09:59)
But basically you could ⁓ as a realtor as a broker, you know, we’re allowed to change hats. ⁓ But I’ve had, I like everyone else get inundated with investors, text, phone calls, mail saying rule by your house. We’re looking for everything. said, after doing this 50 times, I stopped doing it because unlessThey think they’re getting the deal of the century, which doesn’t exist anymore. They’re not interested. I have done this countless, countless times. As a matter of fact, I’m doing a fix and flip on my desk right now. The purchase price is 600 ish. The budget is 500 ish. And the similar sales in that neighborhood are 1.3. That’s not a huge…
That’s not a huge margin right there, but the scope of work is enormous. I could find a fix and flipper, a 20 % equity ⁓ listing right now in 10 minutes, but they’re like, it’s on MLS, I’m not interested. So I get this and there’s like, there’s not a lot there and you’re going to a lot of trouble to make what you’re probably going to make. Cause this is a super hot area.
Dylan Silver (11:34)
No.I’m not interested, yeah.
Mike Giampa (12:01)
Doesn’t matter. It’s always hot. It’s never dead here. There’s so much turnover. There’s so much government. There’s so much ⁓ military that it’s, I mean, everybody who’s willing to sell their property at dirt cheap has been solicited a hundred times before, if not more. So I just don’t see those super killer deals like we used to.Dylan Silver (12:23)
Right.You know, I think, you know, the trickiest part of being a successful real estate investor, especially a flipper, is buying the deal right. But with all the ways that people can circulate their advertising for their property, it’s tougher and tougher to really find a deal that’s substantially below market. And then on top of that, you have, you know, corporate builders, especially in the Sun Belt, that are now
you know, selling brand new homes for close to, if not the same cost as a pre-owned rehabbed home. So then that takes, you know, it makes it incrementally more difficult for flippers to, to, you know,
exit these deals. I would like to ask you about folks who may have a real estate license or maybe investors and they’re thinking, hey, would it be worthwhile for me to become an appraiser? Because you often see, you know, investors become realtors or, you know, people get into lending or become a RMLO. Would it ever make sense for someone who’s an investor or a realtor to have their appraiser license for the purposes of holding it?
Mike Giampa (13:31)
No, just because the industry is really trying to get away from using appraisers. Something like 30 % ish of new sales are used with what are called waivers. They don’t even need an appraisal. So there’s a lot less business for a lot of people out there who don’t specialize as it is. I tell people who solicit me,Dylan Silver (13:49)
Hmm.Mike Giampa (13:58)
They found me, I’m a trainee, I’m looking to get into it. I tell them, you’re not gonna make a dime for a couple of years.You’re just gonna be, you’re gonna learn how to type appraisals. That’s basically how it is. Unless you go to work for a local county working ⁓ in their tax department, you can get your license quicker that way and you will actually have a county job with benefits. But to actually make money as a private appraiser that will sustain you.
Easily four to six years unless You are just you have the golden scenario, which doesn’t happen You can go on any appraiser board and see the list of trainees looking for mentors No one’s hiring just because of the rules that they’ve made it more difficult There’s these AMC’s the giant middlemen. They suck everyone up. They pay them nothing They chew them up and spit them out. They get disillusioned that they jump back out of
real estate appraising and go do something else. There’s no regular person that’s coming up to the ranks and just wants to do this as a career and they’re gonna take it slow. It’s not like it was in the old days.
Dylan Silver (15:09)
It’s not happening.Yeah. mean, when we talk about some of the niches, you mentioned, you know,
specifying on something really in the appraisal space. I’m seeing that there’s a lot of investors who are pivoting away from like single family fix and flip, not to say that they can’t still do that, there’s plenty are, but that are getting into self storage, mobile home parks, RV parks, all of which need appraisals. But if you’re buying a mobile home park or an RV park, this might be somewhere in the county limits and there might not be comps. How are those appraisals?
done when there may not be, you know, a nearby mobile home park community. It may be, you know, rather isolated.
Mike Giampa (16:36)
Well, anything other than residential one to four units, anything other than that is commercial. So everything you just described would be commercial appraisers, which are certified general. Their timelines are much different. Their fees are much different. The length it takes to do those appraisals are much different. So I don’t know anything about that. what you’re speaking of that I can talk about is comps. You can always find a comp.You can go back in time and find a comp. You can expand your search parameters and find a comp. The things that are different from your subject, like time and distance, you can adjust for location and time. I’ve never not been able to find a comp because you have to. The sales comparison approach is the golden approach for 99.9 % of appraisals.
Dylan Silver (17:22)
You have to.I would like to pivot a bit here, Mike, and ask you about some of the segments within residential real estate, which I think a lot of investors are interested in, but that also changes the degree to which they’re rehabbing a property. For instance, if they’re going in and looking for a rental property, they’re not going to do as much value add, probably, as if they were a short-term rental, where they’ve got to have probably the nicest of everything in many ways so that they can attract a higher type of clientele.
are
looking at some of these strategies, especially when it’s a long-term strategy. I would think from my vantage point outside looking in, the appraisal is not gonna matter as much in those strategies as it would for someone who’s looking for some type of short-term play. Whether it’s a fix and flip or they might be doing some type of a whole tail situation or some type of…
situation where they’re taking an off-market property and then listing it on market, anytime that there’s a shortened timeline, that’s when the appraisal seems to be really pivotal in banking on the entire profitability of the project.
Mike Giampa (18:43)
Well around here, I don’t think I’ve ever done a fix and flip to turn into a rental or short term rental. Everything here is sales because they sell so fast. You can get in, you’re pay a lot for your point when you get a loan. Your carrying costs are gonna cost you a few dollars, so you wanna get in and get out as fast as possible. Everything I do seems to be sold.Dylan Silver (18:54)
Yeah.Mike Giampa (19:13)
If it’s under like seven, 800,000, almost every fix and flip looks the exact same. There’s acres of LDP, white kitchen, stainless steel, paint in and out. ⁓ If you get above 800, they might do, you know, new windows, roofs, things like that, that are, that will bring like a ⁓ 50s brick rambler and make it look modern, but it’s still a 50. They’re not putting a second story on it.the overwhelming majority of the time. Sometimes I do fix and flips where they’ll put additions on. But generally it’s just new flooring, new bathrooms. They’ll make the bathrooms look custom, but it’s still white tile with design. They’re not going over and above. Sometimes you’ll take out a main wall in a living room, dining room, area to make that one big space open. But…
The ones I see here, I mean, I have hundreds and hundreds of budgets on my PC for these fix and flips I’ve been doing for years. And they all are pretty much the same thing, 40 to 60 grand on most houses. Get in, get out, move on to the next one.
Dylan Silver (20:26)
We are coming up on time here, Mike. Any new projects that you’re working on and then as well, know, if folks are interested in reaching out to you, how can they make contact with you?Mike Giampa (20:36)
No, I’m pretty much just an appraiser guy. ⁓ do every private appraisal you can imagine. Divorce, date of death, ⁓ retrospective, tax appeal, ⁓ fix and flip. If somebody in this entire DC Metro area is interested, then go to my website, dcmetroappraisals.com. They could contact me and say, I’m looking at a property here.How much would it cost to tell me to value the property now before I even submit a bid? And how much would it be if I sent you ⁓ an email that showed my budget? And I could do that for them. I could do that without leaving my house. I do remote appraisals for ⁓ a different lender who does fix and flips that way. They lend a lot of money on that. So I’m doing this a long time.
Dylan Silver (21:23)
Mike.Mike Giampa (21:33)
Probably 15,000 ish 34 years been doing it. I’ve seen it allDylan Silver (21:40)
Mike, thank you so much for joining us today. Thank you for your time.Mike Giampa (21:44)
No problem, thanks.
