All Forum Posts by: Dave House

Stan, I have no idea what a colleague request is let alone that you sent me one. I just recently found this site and I;m not real familiar with all it has to offer. Regardless, I'm not looking a realtor to send me listings but I appreciate the offer.

I'm looking for an online property search resource, which provides auto emails of listings in South Florida as they come on the MLS. I want these listings to give me as much info as possible on the property i.e. map, DOM, all price changes, sales history, comps, local market trends, public tax info, etc

So, if anyone has a great online property search resource for South Florida other than zillow.com, realtor.com or ziprealty.com, I'd appreciate hearing about it.

Thanks!

Yeah some online mapping services certainly have questionable accuracy, I always double check with property records for actual location.

I could request til I'm blue, but some realtors are just going to give you what they want to give you or just what they know.

Actually, it's not the "type" of listings that I'm concerned about in an online property search tool, it's the detailed info for each listing i.e price changes, DOM, sales history, etc. like Ziprealty.com provides (just no longer in my area) by apparently pulling info from MLS & public records.

Originally posted by Stan Jackson:

What are you doing? I know you are looking for listings, but for what purpose? Are you trying to buy and hold, wholesale etc?

Yes, I'm looking for minor fixer uppers (no foundation/structural/chinese drywall damage) with motivated sellers i.e. Estates, Divorces, Pre-foreclosures, REO. I'm open to owner financing and lease option deals. Property that I can:
1) Buy and wholesale/assign.
2) Buy, rehab and flip.
3) Buy, rehab and hold for rental income.

Originally posted by Stan Jackson:

Did the realtor(s) give you a reason for not providing what you request?

Well, I guess YMMV with realtors in general and the particular MLS they belong to. It seems as if some are willing to send me "Full Input" listings, which show all info the agent has the ability to see. Some realtors either say they can't or won't send this detailed listing for whatever reason. Some say they can't see DOM until the listing is sold although I know I can get DOM off the "Full Input" listings from "RMLS" but not sure about the "SEF". Either way nothing IMHO had come close to Ziprealty's amount of detailed info (no realtor needed).

Originally posted by Stan Jackson:

Also, when you say you are wanting listings, do you mean Active Listings are Sold Listings?

Yes

Originally posted by Stan Jackson:

If BOA increased the approved value then, basically a new buyer has to be found.

What are the details of the property, you may be able to find a buyer here on BP?

What details do you need? The owner and I have discussed the possibility of me buying the home before BofA forecloses so I'd like to see if this is viable option first and foremost. If so, I'm looking for guidance on what's the best way to move forward trying to buy this property from BofA before it forecloses?

Originally posted by Kenneth Smith:

Hi Dave,

Is the property here in South Florida?

Yes

Originally posted by Kenneth Smith:

If so, what neighborhood?

It's in a desirable neighborhood east of I-95.

Originally posted by Kenneth Smith:

Also, this "private lender" holding the 2nd. Is it a friend, family member, etc.?

I believe it's a friend.

Originally posted by Kenneth Smith:

If you can provide as many particulars as you can, it would certainly help.

What more particulars would you like?

Originally posted by Stan Jackson:

Are you saying that your friend has a short sale approval and it was changed?

That's what it sounds like to me. 1) Hardship package complete & approved to find SS buyer 2) SS buyer offer accepted but then countered (+$5,000) 3 days before closing.

A friend of mine is in a difficult situation. He's "way underwater" and in danger of losing his home to foreclosure. BofA has a first and is in the process of foreclosing but there's a private lender who has a second mtg.

My friend says he completed a hardship package and BofA agreed to let him do a short sale, if he could find a buyer. He had one offer accepted by BofA but 3 days before closing, the bank wanted $5000 more and the deal fell through. Since then, he has filed bankruptcy, which he says only bought him some time before BofA actually forecloses.

In hopes of keeping my friend in his home, we've discussed the possibility of me buying the home before BofA forecloses and then either renting it out to him or selling it to him while holding the note.

1. What's the best way to move forward trying to buy this property before BofA forecloses?

2. How does the 2nd mtg affect the situation?

3. What happens to the 2nd mtg, if BofA forecloses?

Thanks!

Been using local realtors, zillow, realtor.com and ziprealty.com for listings in South Florida. Zip is a great tool for listings; I can't even get realtors to send me listings that give me a map of the listing (or link to one), DOM, all price reductions, sales history, comps, local market trends, public tax info, etc

However, when I tried to log in to Zip this morning, I received the following message: "No Active Account. Unfortunately, we've closed our operations in several metropolitan areas in order to focus on providing the best customer experience in our core markets."

Obviously one of those metropolitan areas is South Florida, which is very disappointing because zip is such a great online search tool so if anyone has a resource for online listings in South Florida that's better than zillow and realtor.com and/or comparable to ziprealty.com, I'd appreciate hearing about it.

Thanks!

Originally posted by David Beard:

Has the seller even thrown a price out to you, or are you just working off this $662K number that you came up with. I assume he did tell you he'd finance at 7.5% for 30 years.

The seller has not thrown a price out so yes, I'm working off the $662K price. Over the past several years he's started to complain more & more about how tired he his and I let him know that I may be interested in buying. He told me when he's ready to sell "in a couple of years" (that was about a year ago), he'd come to me first & he'd be interested in holding the note, if he could get 7.5%. Lately he's been complaining a lot more and even hinted that I should make him an offer. BTW, he also told me that he owns 5 other properties even closer to the beach 1 SFR, 2 Duplexes & 2 mixed use with 4 store fronts on the bottom & 4 apartments on top.

Originally posted by David Beard:

Have you looked at getting your own financing? It's probably advantageous for him to seller finance, as he can spread the taxes out via an installment sale, so don't pay more because he'll carry the note. You have good credit and cash, so might be able to get a loan at a local bank.

Thanks, I'll keep his tax benefit in mind & try not to over pay. No, I have not looked into getting my own financing yet due to a lack of consist/verifiable income.

Originally posted by David Beard:

The 2% rule for C properties (get 2% of purchase price per month in rents) suggests that you shouldn't pay more than 50x monthly potential rent, or $414K. And if there is immediate deferred maintenance, you would need to subtract that off your offering price (or at least half of it, since you'll have new components). If you can't get into this ballpark, move on.

Combined with the 50% expense rule, that gives you a 24% gross return and 12% net return/cap rate. C properties trade in the 10-15% range typically, though you need to run sales comp in your immediate area to validate.

I've heard of the 1% Rule (get 1% of purchase price per month in rents) so how are the 1% & 2% rules used and where can I find a list of these mathematical guides or rules of thumb & how to use them? Also, what is a C property?

Originally posted by Thomas Ashton:

Dave,

First, you do not "select" a cap rate. You observe cap rates in the market place by seeing what similar buldings in the marketplace have sold for recently. You then ascertain what the NOI is for those recently sold buildings and determine the cap rate. This cap rate is then applied to the NOI of your potential deal to determine a valuation (NOT investment return!). When the cap rate is greater then your cost of debt, you will realize increased return with leverage.

Second, debt and equity returns are VERY different. Debt returns are generally less risky then equity because the debtholder has a legal claim to getting paid back. For example, if the debtor defaults, the debtholder can sue for whatever collateral is securing the debt, which in the case of mortgage debt is generally the asset (building) that secures the debt. Equity does not have a legal standing and therefor is riskier. That is why equity holders are generally wiped out in corporate bankruptcies. SInce debt holders have a legal standing, they generally become the new equity holders.

Third, equity returns should always be higher then debt returns. The seller is requiring high interest because one of two, or a combination, reasons. Either the building is high risk or the borrower (you) is high risk. In those cases, the cost of equity would also be higher. If the buidling and/or borrower is low risk, then the interest rate on the debt should be lower since the debtholder is more assured of being paid back. Likewise, the riskier the project becomes, perhaps because of leverage, then the equity returns should be correspondingly higher.

Hope this helps.

Thanks, that was very helpful!