All Forum Posts by: Joel Owens

Don't know because I am not there.

Many times I can tell you as a listing broker the asset manager demands the property stay active in the system even if an offer is accepted.

Usually you upload to a portal and the asset manager has already verbally accepted an offer or countered by e-mail.Then it can take up to sometimes a week before the bank gets back their addendums to sign.

I had one verbally accept on Thursday of last week and just got back addendums today. So sometimes when it's active really their is an accepted offer or the AM chose to keep negotiating with that one offer already.

I agree with J Scott. Realtyman I don't see that happening at all in my state.

National banks will always use a listing broker to give maximum exposure.Now if the bank is selling the note,or a short sale,or a bulk sale of reo's or an auction then that might be the case.

Local and regional banks might not have their properties listed.I contact these banks directly and yes they will deal with you.

I have found on the commercial real estate end many of these banks are selling way overpriced assets. I will see a 18,000sq ft retail strip center brand new off the corner with just the shell. They are asking 2,800,000 to which I say they are insane.

In a situation like that you have to finish out the space for the tenants,lease concessions for being off the corner and not anchor weighted to drive traffic.Once you run the numbers they are way overpriced.

They tell me my numbers make sense but they just can't take that kind of hit right now.So banks go through a process before they are ready to be realistic.

The commercial side is very different from the residential side in that the loss amounts are usually much greater to the bank.

Big national banks with asset managers have hundreds of files to work and use a listing broker.Typically they take 10% of list price with markdowns every 21 to 45 days depending on the bank.

I used to track which banks got real aggressive with list price.Bank of New York Melon would always dump really cheap and other banks would overprice and take a really long time to get realistic.

So by collecting this data you know what you are up against when the property hits the market.

For a lender to get reimbursed for losses on a loan generally they have to go through certain steps.

Generally the mortgage servicing company handling the loan has a servicing agreement where certain protocols must be followed.

The loan has to be put through a process and workouts and DIL,short sale,and every other option under the sun before they foreclose.

At the foreclosure sale they are bidding loan amount and late payments,penalties, attorney fees,etc. The when nobody pays them the full amount they take back and sell REO. They have to document everything to get reimbursed by the insurance company for losses.

That's just how it works in my area.

As far as flipping strategies buy right and then also price correctly when you sell.

As a real estate broker new product doesn't come on the market every 30 days it comes on the market every week and sometimes daily.

Knowing that what buyers want is the best product at the most reasonable price.They don't want a crap hole to live in just because it is cheap.

So when rehabbing if your budget is stretched pick 2 or 3 things that will pop and catch the buyers eye that say QUALITY.

Also in this market a price drop every 30 days won't cut it.As a broker we know from statistical data that 85 percent of activity occurs in the first 10-14 days on the market.

If recent sold prices range from 40k to 50k I want to be in the bottom 50% of list price 40k to 44k with a great product.If I have given it maximum exposure and nothing comes in drop the price every 7 days until it sells.

You want to always stay ahead of the pricing curve and chasing the market down.It is the number one mistake made by all sellers. They list at 140k and over the next 2 months reduce to 125k and say they will take that.Too bad that was what it needed to be from the start and now the number is 114k.

They chase the market down for 3 months and by the time they have wised up they are stuck with a rental.

Also don't go cheap on the co-op to the selling broker.Many buyers agents last just 1 year in the business so each sale they are looking for a big payday. Everyone focuses heavily on the rehab costs but often overlook key components necessary to get a contract and close.

No way to give a blanket answer for that. Options available will depend on the loan itself and if it's a small bank,regional,national,overseas or a hedge fund or a private investor etc.

Typically on loans you go over options with the underwriter upfront going in so you have a plan when the time comes.

How do you know 15k rehab is an accurate number??

If it's cash and there is no other action on it go really low.You can always go up on your offer.

What year is the property built???

That depends on if your state you have a notice of default or a lis pendens notice that is required of the lender by state statutes for foreclosure proceedings.

In my state of Georgia we don't have either.Simply a letter is mailed to the borrower from the lender and then the foreclosing attorney advertises 4 weeks in the local newspaper and it's sold the first Tuesday of every month.

If your state requires notices to be filed then the courthouse is where you will get information first.There are companies that sell lists but by the time they come out days or weeks have already passed and everyone else is lazy and gets the same list.

So the name of the game is to get to them before everyone else.To do that you have to be willing to put in the work.

Other ways to find people in distress is by classified ads,internet presence,etc.

If they are in distress and it's not in the public records you will have to get them to raise their hand for help.

I have typically found those in the early stages of default to not be as motivated as 90 days or more behind.

As stated court costs can get very expensive.It's better to mediate out of court in many cases.

The question is do you think going to court after expenses you will be off better than settling out of court??

A friend of mine invented Goof-Off cleaner.They went through a divorce about 15 years ago.

The soon to be ex-wife said the company was worth ex and of course he said the companies valuation was worth way less.

The parties couldn't agree so went to court and after a long battle finally settled.

Every buyer investor will look at this differently.If you advertise a 10 CAP rate you will at least get their attention to investigate further.

It sounds like with the properties they own them free and clear to do owner finance.

Sellers try to do owner finance and stick it to the buyer on loan terms and price.Buyers are looking for owner finance and reasonable terms.

It sounds like by them evicting tenants and rehabbing and renting over a years time that they are overly invested emotionally in these properties.

Usually on inherited properties they want to sell as fast as possible.It sounds like they want top dollar and yet want someone else to take over the headache.

Also you stated repairs repairs and rehab.
How long have the properties been stable at the quoted occupancy rates??

What type of rehab was done?? Was it cheap or good quality??

Are the properties real close together or way spread out??

What kind of cap rates are properties selling for in your area??

Sounds like a minimal deal to me.Instead of one property you are having to look at 4 with different capital expenditures and rent levels.

10 or 20% down with owner finance might be appealing with a great cap rate.

The seller will need to look at money down versus what it would cost to foreclose and any personal guarantees offered before owner financing. In some states foreclosing can get very drawn out and expensive.

Personally in this down market I would much rather have the 250k to 300k and move it into a much larger value add property such as an 80 to 150 unit building or larger.

Dion the appraisal records doesn't mean anything in my area.

In my area of Georgia from the time a property forecloses and takes back the bank is given a foreclosure deed but it will take 2 to 3 months to be updated in the tax records.

So every record will show the previous owner but they don't own the property nay longer.In my state even if the property is vacant if 500 or more of property appears to be in the property you MUST go through eviction proceedings.

Sometimes people being foreclosed on store their things there even if they have moved rather than paying a storage place.Then if the bank does a trashout the former tenants sue stating that the bank threw out a 5,000 dresser that was really a 100 dresser.

So from the time the bank forecloses ti sometimes takes 3 months before a vacant property is listed REO even if the bank owns it.

You would have more luck targeting absentee owners who have owned their properties for a long time and want to get rid of a headache.They will usually sell at a great price.