All Forum Posts by: Danny Day

Who has expierence buying REO's, or a HUD home as an owner occupant?

The house I live in right now was a HUD home when I purchased, and I submitted to HUD I would be an owner occupant.

I've got a client who purchased a home from HUD as an owner occupant, and the day before closing he informed me he is considering selling in the next year. I told him I would sell it for him, and it sounded good.

At closing, he brought it up to the title company's closer and she mentioned that he has to be owner occupant for 2 years or he would be considered an investor for selling.

My question is this:

1. How can anyone tell you if you can / can't sell your primary residence?

2. Who enforces this?

3. Have you delt with this before?

We have done nothing unethical or wrong here.. He saw the potentinal in the home he bought. Purchase price $50k, repairs $12k, ARV is $85k... and he paid cash for the deal.

Any input is welcomed

Danny

My vision would be a close knit community living a "greener" life than most.

I would incorporate a community garden, lots of landscape design, and individual front porches. I would stay with color schemes that are loud and visual.

I feel it might work near a university, metro station, or close to an urban environment. I've got some places picked out in Houston. Obviously there are good and bad spots for this.

Ideally I would like to create an open environment, where neighbors can hang out with each other, enjoy the company of each other with the same ideals and living standards.

There are other ways to incorporate the "green" side of things, such as a rain water collection system, or solar panels on each house for power...

Parking would be an issue. Most likely you might have to build a 2 story parking garage, or asphalt a lot for enough cars.

Some of these units have washer dryer combos. It might be feasible to build them in with the over/under idea.. or it might work better for a washateria.

Thinking outside the box as much as possible on this one.

Danny

Find an agent who is willing to work with you, and they should be able to get everything you're looking for.

Taking them out to lunch works well..

Do not base your values off Trulia, Zillow, etc. There are many factors that come into pricing a property that Zillow will not consider.

Here is how I run my comparables for myself and other investors:

- Active / Pending / Sold in last 90 days
- +/- 200 sq ft of subject home
- +/- 2 years of subject home
- Same bedroom as subject home
- Same bathroom as subject home
- Same neighborhood as subject home

So when comparing deals for an investor, here is what my email looks like. Its very simple:

Katy home
List price: $36,000
1,028 sq ft
3 bed, 2 bath
Built 1982
ARV: $76,000 - 1 sold comparable in past 90 days (average DOM 72, LP/SP% 100, 3 months of inventory in the neighborhood.

ARV is after repair value - the retail value you can expect to sell the house for.

DOM is days on market, essentially how long it will take to sell.

Good luck

Danny

Marcello

Justin took the words out of my mouth, as "it depends".

What are you looking to do? You might hear of a good cash flowing multi-family for sale at auction, but might not be able to walk inside of it.. What if this one has fire damage? Mold? That can put an unexpected stop to your cash flow.

Personally I would like to visit the property and at least do a visual inspection. Like Justin said, the best deals are the ones no one knows about.

Depending on your area, you can find decent deals in the MLS. That is where I would look for multi-families for sale.

If you were looking for single family, you could place bandit "we buy homes" signs and your phone should ring. This would give you the opportunity to do a visual inspection, find a deal that most don't know about, and either purchase or wholesale it.. Win-win situation for you, of course if the deal makes sense.

Having a good strategy comes before all that though..

Good luck

Danny

Playing devils advocate here...

There is a LISTING agent in my office who does not work weekends, and she is a top producer in my office. She can afford to do this because 1) she has many, many listings 2) she sends her showing request / buyer referrals to other agents in the office.

I'm sure she would love to take a listing on a weekend though...

If you were working with a buyers agent who does not work weekends.. I would say they are not hungry enough to work with.

Danny

Be sure and come to an understanding of time frame before you sign the contract. Make him stick to your initial agreement by adding $100 per diem for overages on the contract.

Check references, and get many bids. Let the contractors know up front you are getting several bids. If they ask you what you think your number is for cost, or what another contractor bid on the job, don't answer.

Good luck

Danny

Not sure I'd have an REO agent with the same listing represent me on the buy side.

Reason being is that they do not want to bring deals to the bank at a significant discount.

Every deal that comes my way where the bank is the seller, I get other agents to write the offer. Reason being is because buyers will nitpick for information on payoff.

I am not saying agents do not know payoff information, but with REO's or short sales, these offers have to be approved by numerous people in different departments.

If an agent has the listing, knows the payoff information, and submits an offer on the buy side to that same listing right at payoff amount, negotiations or banks will start to assume some type of fraud involved.

Most REO brokers / agents who have connections with asset managers do not want to tarnish that connection.

Just my 2 cents.

Good luck

Danny

Has anyone taken interest in "Tiny Homes", less than 500 sq ft homes.

I've been reading up on these, and it looks like people are building them ground up for less than $15k. Some people are claiming to live here for 10-15 years happily.

In my opinion, it seems like this could be an up and coming trend in real estate.

There are certain areas where property values are very high, and people choose to live in tiny home.

Has anyone considered developing a community of 25-50 tiny homes? Based on my calculations, you could fit 50 tiny homes at 500 sq ft each on a 1 acre plot, with enough room for landscape, sidewalks, etc.

These are the guys who started it all (I believe): http://www.tumbleweedhouses.com/

Opinions?

:cool:

Danny

Jeff-

Any investor friendly agent should be able to complete a simple cashflow analysis for you based on your financing information.

As a licensed agent, I would not say this is expecting too much from a buyers agent. Have they shown you the property yet? Doing a cashflow analysis takes 15 mins tops..

I would simply move on to the next one.

Good luck

Danny

103 days on market and we are finished. Glad this one is over with.. I was beginning to think it would never end.

The loan was called in Aug 24th, so we had to re-fi out of the hard money. Ended up leasing the house to a nice family who is going to purchase. I've already got them lined up with financing, just awaiting under-writing. We wrote the lease that it would be null & void upon their funding and then we should have it sold.

From my numbers, we walked away with no profit on this (no loss either). It looks like we broke almost dead even.

We're cash flowing on the rental income, and hopefully in a month or two it will be closed and done.

Danny