All Forum Posts by: Anson Young

Anson,
you mixed two different thing. Dollars and percentage. You can work your formula and still end up with $10K-$15K profit if you're dealing with inexpensive properties. Also in the calculation is how do you value your own time. Some people don't mind to work on a project and earn less as long as they earn money but they forget to calculate their time in it.
I must admit that although I did and do rehabs, I don't flip. I only rent my properties out, but I am always fascinated by how people can really calculate ARV, especially in a fluctuated markets and the "mark to market" atmosphere we are in.

Understood, we do the first calclulation (with %) just as a quick 'is this worth our time', then break it down with #s and more accurate repair numbers.

ARV is easy, I'm an agent and have been running accurate comps for years . We did about 450 BPOs last year for our bank clients (REO listings) and keep a very close eye on neighborhoods and trends.

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I'm interested to hear others talk about where they like to land their numbers for fix and flip projects. Some guys will only look at the deal if it has $50k of room after fix up, some guys are happy making $10-15k per deal and moving on.

What are your magic numbers? 1/2 of ARV? ARV minus 25% minus fixup? ?

For example, another partner of mine wont touch a deal if it dosnt have $30k profit (ARV - fixup/closing costs/realtor fees/holding costs/purchase = $30k to him). I'm in the $20k minimum camp, 10-15k is cutting it close incase something goes wrong...

We start the calculation with ARV minus 25% minus fixup = purchase price. Then break it down further, ARV minus fixup/closing costs/realtor fees/holding costs/purchase = potential profit. Hasnt failed yet with the 7 we have finished this year.

How about you?

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Originally posted by Robert Jenkins:

Wow. Thank you big brother. Jeez.

I mean even if they are terrorists, why not let us take their money? Just watch the house after they move in.

Financial terrorist? Like Madhoff?

I'm thinking either funding terrorist orginizations or themselves terrorists would be those watched?

Hopefully have an update by this afternoon?

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Originally posted by Jeff And Cheray Warner:

I was out farming an area today and found a couple homes that we're traditional vacant/boarded up so I wrote down the addresses. When I got back home I looked them up and noticed both we're just recently purchased by banks (both purchased in May) and had no Realtor sign in the front yard. So here is my question:

Since these are NEW and not listed on the MLS, do I contact the bank directly to negotiate? I think this should be a good opportunity to grab these before they are listed, just not sure how to proceed. Any REO experts have some feedback? Any help would be appreciated. Thanks.

Jeff

This seems to come up weekly! If you can get ahold of the correct Asset manager (depending on the bank there can be hundreds, or might still be with the premarketing asset manager, etc), they will refer you to the agent that will be listing the property. Just because there is no sign, dosnt mean they dont have the property assigned to an agent (who is currently handling the premarketing tasks, securing the property/utilities/etc).

I say it everytime, the asset manager dosnt want to talk to a buyer, thats why they hire the agent to talk to guys like you and me. As an REO agent, I know this to be true when I get a name of some investor that called the bank from the asset manager to deal with it.

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You cant make this stuff up:

We closed yesterday, then found out the wire transfer for the down payment was 'flagged' for suspected terrorist match. The deal wont fund until they verify the identities of the buyers and clear them from the financial terrorist watch list.

wow...

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Originally posted by Scott M.:

Hey Webb - if you and I are bidding against one another for the same house - we are both cash offers - and lets say your bid is $1,000 higher.

You are only going to pay him a $age of his normal fee - I am paying him his full fee - who do you think will end up with the deal?

There is a chance you might get his ear because you have done deals with him in the past - but I can promise you I will more then likely get the deal.

I don't care what the rules / laws / regulations are - people are people. I get calls from some of the realtors I work with and they tell me what the highest and best is I have to hit - or they tell me what the bank will accept.

Heck - I just locked up a property Friday with a brand new realtor - she told me the number to be at which was under what I was going to offer - but I was bidding against someone who didn't go direct - they used their own Realtor so there would be a commission split and she wanted the whole commission.

Should she have been doing that? That is a topic for another thread.

The fact that it goes on everyday is is a fact - and if you start to cut commissions telling him he is making it up in more deals - well - get back to me on that in a year and tell me how well it is working for you.

You may not have liked Brians tone but he was 100% spot on.

Look for deals that work and pay people who help you make your money - don't count their $$ and they won't count yours.

I will agree with this 100%. Start off paying full commission, then once you really start doing a bunch of deals, ask for a discount for bringing him so much. Going to him now and promising 'tons of deals' and asking for a commission cut means nothing because you have no track record. Its all promises at that point. I understand how investors feel about us realtors, but the feeling is both ways. If I had $10 for every call I got that said "I buy 10 houses a year/month/week/minute, you should send me all your deals ....blah blah blah blah" I could retire and live off that income alone. Most investors are full of hot air, sad but true.

Scott was right on with 'getting the deal', there are alot of things you can do to make sure your offer is out front, messing with that agents commission isnt one of them.

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Originally posted by Stephani:

I keep hearing that, yet the supply of REOs continues to dwindle.

I'm getting impatient..

The moratorium was on foreclosures, the process from foreclosure to listing can be 3+ months depending on a bunch of factors. We are starting to see the foreclosures trickle (or spike in some counties) through more, which means in 2-4 months we will see more REO inventory.

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Originally posted by Alex Locklear:

Does anyone know how to pick up REO's before they hit the MLS?? Is it true that one must wait until it goes to MLS to put in an offer?

I have never seen it work. If you do get ahold of the actual Asset manager, and arent told to jump in a lake just getting them on the phone, they will refer you back to the listing agent. They hire us (listing agents) so they dont have to talk to you directly. Some of our banks wont look at offers until they have been listed for 72 hours, none will look at offers before listed (a few exceptions, but overall, no).

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Originally posted by Stephani:

Litton SUCKS.

The last two deals I did with them each took 3 months to close. Both deals were nightmares from beginning to end.

It took them FOREVER just to get the contract signed, and once everything was ready to close, it took them an eternity to sign off on the HUD and get the deed package back to the title company.

Steph

The differing opinions in this thread are funny, here is another one. Out of the 35 banks we list property for, Litton is far and above our favorite to work for due to their speed (for a bank...) and ease to deal with. Here in CO, 5 day inspection period up front before addenda is signed, they are a little harsh on FHA borrowers, weeding out the flakes pretty easily.

My least favorite to deal with? Bankers Asset Mgmt. They are soooooo slowwwwwwww.. talking 3 weeks to respond to an offer.

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Originally posted by abhyler:

Mike OH, you mentioned on another post that you buy more of the middle/lower end locations because those are the rental areas. I wanted to ask you...do you see a problem in selling those properties in the future? I mean....those are mainly rental areas...and when time to sell comes....it's more difficult to sell. I have 4 out of 7 SFH in rental areas and I come across more possible good deals... but I'm afraid to get stuck with a property when I want to sell it.
I appreciate your advice.

Those areas should be the same first time homebuyer areas for low/middle income areas. You will probably sell to an FHA buyer, first time homeowner, but it should sell just fine.

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All Forum Posts by: Anson Young

Anson Young has started 91 posts and replied 1784 times.

Post: What is your magic numbers for fix&flips?

Post: What is your magic numbers for fix&flips?

Post: First deal back in CO, over $44k on REO flip

Post: REO Not yet listed on MLS

Post: First deal back in CO, over $44k on REO flip

Post: Establishing Realtor Rapport

Post: 3rd Wave Of Foreclosures is Coming..... Get Your Money Lined Up

Post: Bank REO before MLS

Post: Which is the worst REO lender to deal with?

Post: What methods are you using to succeed?

Anson Young has started 91 posts and replied 1784 times.

Rounded Star Post: What is your magic numbers for fix&flips?

Rounded Star Post: What is your magic numbers for fix&flips?

Rounded Star Post: First deal back in CO, over $44k on REO flip

Rounded Star Post: REO Not yet listed on MLS

Rounded Star Post: First deal back in CO, over $44k on REO flip

Rounded Star Post: Establishing Realtor Rapport

Rounded Star Post: 3rd Wave Of Foreclosures is Coming..... Get Your Money Lined Up

Rounded Star Post: Bank REO before MLS

Rounded Star Post: Which is the worst REO lender to deal with?

Rounded Star Post: What methods are you using to succeed?

Post: What is your magic numbers for fix&flips?

Post: What is your magic numbers for fix&flips?

Post: First deal back in CO, over $44k on REO flip

Post: REO Not yet listed on MLS

Post: First deal back in CO, over $44k on REO flip

Post: Establishing Realtor Rapport

Post: 3rd Wave Of Foreclosures is Coming..... Get Your Money Lined Up

Post: Bank REO before MLS

Post: Which is the worst REO lender to deal with?

Post: What methods are you using to succeed?