Need help choosing farm area for short sales

[Danielle C.]

Hi all,

I don't see very much discussion in the SS forum when it comes to selecting a few farm areas. I could use some tips or suggestions for this. I intend on retailing these homes, so won't be looking for too much rehab.

I need to find a low DOM however what is considered low in this market? Under 120 days? Under 90 days?

Since these will be retail most likely to families, I will look for lower crime and better schools. Is there such a thing as too nice of an area that could make it more difficult to short with the banks because the surrounding value?

Should I look at the median home price versus the average income? If so, what ratio should I look for?

Is there a "magic" number for arv? For example, homes that arv at 250k or 300k retail best?

Also, what % home value decline should I look for in the past year? There are areas where the average decline was 7% and areas where it was 15%. All areas saw solid growth (ie home sales) in the last 6 years and have near 10% unemployment, so there are plenty of underwater people who are very unfortunatey behind on payments.

How large should the farm area be?

Am I placing too much empasis on the above? For example, are your parameters more loose and you just do a pre-NOD search on several zip codes?

I am located in the Chicagoland area, so I can go 30-45 minutes in any direction and find almost any type of community. Perhaps that is where my hesitancy comes from. There are alot of options here.

Thank you for your suggestions!!

Danielle

[Danielle C.]

Hi Eric,

I think you may have misunderstood what I was asking. I was pretty much using a wholesaling term, "farm area", meaning the area that I will mainly locate properties out of. In a sense, you are farming the area for deals. I started out in Wholesaling, so was still thinking in those terms.

30-60-90 late lists refers to lists that you can purchase on people who are late on their mortgage payments. The list encompasses those who are 30 days late, 60 days late and 90 days late. After 90 days, you can generally just go to the courthouse and find these people because a NOD (notice of demand) has been sent to them and it is now a matter of public record.

For me, because I am not buying and holding, the faster the property resells the better. So I want to make offers on homes where the area's average DOM (days on market) is low. Even 120 days is a bit long. I'm really shooting for 100 days or less.

I will retail these properties using an RE Agent. The agent is an important aspect. They take a chunk of profits, so have to be worth every penny by being motivated, agressive and knowledgeable.

Hopefully this clears things up. If you have any other questions, feel free.

Thank you,
Danielle