All Forum Posts by: Anita Fofie

Recently Sold Comps (Full MLS generated CMA available upon request)

5441 S Ridgewood Ct

CHICAGO, IL 60615

$550,000

Last Sold Price

3

Beds

3

Baths2,400 Sq. Ft.

$229 / Sq. Ft.

Built: 1882Lot Size: 1,707 Sq. Ft.Sold On: Aug 28, 2015 Status: Closed Sale

1221 E 54th St

CHICAGO, IL 60615

$600,000

Last Sold Price

4

Beds

2

Baths2,400 Sq. Ft.

$250 / Sq. Ft.

Built: 1894Sold On: May 21, 2015Status: Closed Sale

4316 S Berkeley Ave

CHICAGO, IL 60653

$372,500

Last Sold Price

3

Beds

3.5

Baths2,800 Sq. Ft.

$133 / Sq. Ft.

Lot Size: 2,975 Sq. Ft.Sold On: Oct 9, 2015 Status: Closed Sale

1229 E 50th St

CHICAGO, IL 60615

$790,000

Last Sold Price

4

Beds

2.5

Baths 2,757 Sq. Ft.

$287 / Sq. Ft.

Built: 1889 Lot Size: 7,501 Sq. Ft. Sold On: Sep 11, 2015 Status: Closed Sale

Attention Cash buyers!!

1313 E Hyde Park Blvd Chicago, IL 60615

This large, vintage building has a ton of potential. 3/2, three story single family brick home with attic and basement. Close to University of Chicago and just a few blocks to the lake in trendy Hyde Park. Housing experts predict Hyde Park home values will increase 5% over the next year, compared to a 1.5% increase for Chicago as a whole. 89/100 Walk Score.

Great bones inside, amazing curb appeal outside. Already has central air. Finish the basement and add a third bath with guest room to exponentially increase value above projected ARV. Please email [email protected] or call/text 604-345-2740 direct (or office 801-872-0302) with any questions. If interested in viewing please contact for lock box information.

Details

ARV $520,000 (very conservative)

Offered at $320,000

Closing date: November 6th, 2015.

Due Diligence period ends: October 19, 2015

EM: $5000

Repair Estimate: $100,000

Required repairs: full kitchen remodel, 2 full bathroom remodels, paint, partial flooring (replace carpets, refinish hardwood, tile, finish attic, insulate and finish basement and replace doors, windows, dry wall work

Estimated projected net profit after repairs: $75,000

Bedrooms:3

Bathrooms:2

Full Baths:2

Basement:Yes (unfinished)

Attic: Yes (Unfinished)

Total Rooms: 7

Total Area Size: 2,541 sf

Finished Area: 2,183 sf

Lot Size: 0.05 acres (2,142 sf)

Exterior:Brick

Fireplace: Yes

Heating Type:Hot Water, Steam, Fireplace

Flooring:Carpet, Hardwood, Tile - Ceramic, Vinyl

Year Built:1885

Air Conditioning: CENTRAL

Average 3bedroom rents: $1750-2000

Sure Chad it's:

[removed email address]

I'm a newbie but the way I did it was to have a deal under contract first then look on Craigslist, backpage, Google for we buy houses ads. Typically, as you know, those ads are put up by wholesalers looking for properties to sell to cash buyers. When do you talk to them get a sense of how many cash buyers they know or if they will be scrambling to find one like you are. The girl I have on the ground has a 100 cash buyer list, goes to REIA meetings every week and is posting my deal on her Facebook page. When you approach them actually having a real deal with real money and a real closing date they tend to be more motivated to find a buyer to close and cash that JV check

Thanks for sharing Shawn. It takes a lot of courage not only to take action in trying to make your first deal happen but also to be vulnerable to share with the community when it goes sideways. I agree with other posters, if homes in the area were selling for $30k to $42k then getting it under contract for $42k was probably your first and as I see it your only mistake. You're soooo close, maybe you can revive it. Since it seems like the rapport you built up with the family seems to have disappeared you may not want to deal with them personally at this point. If you've got buyers at $40k then get another wholesaler to approach them and offer them $35k and JV the deal split it 50/50. ($29k would be safer based on the comps you mentioned but you may really piss them off). Anyway, you may get away with this if the sellers are motivated enough and don't want to pay realtor commissions to list with an gent and sell the home on the MLS. Just a thought.

I agree with the above. If you are putting good earnest money down and fully intend to follow through with your offers then there is nothing wrong with making many offers before physically seeing the property. As for "making a bunch of low ball offers to see what sticks" I don't think responsible investors do this. At least for me, I always run my numbers BEFORE I submit any offer to determine my maximum allowable offer. I do often calculate my MAO and then take 10-15% off of that as my initial offer so that there is room to go up but that's just good negotiating, there's nothing arbitrary about it. I could be wrong but the listing or selling agent MUST submit every offer received to the seller. I ran up against this issue when inwanted to make offers remotely so could not see the properties myself and some listing agents would not write up the offers. Then it occurred to me that I didn't have to use the listing agent to write my offer. Go around the gatekeeper. I had my own investor friendly agent who now writes up all my offers and submits them. I've made it easier for him by having him give me a blank purchase contract and addendum which I've signed and initialed and saved in my computer so that all I have to is fill in the address and email it to him to submit. If/when your offer gets rejected ask your agent to request to see the returned offer--it should be signed by the seller with a notation of the time and date they accepted, countered, or rejected the offer.

Hope that helps. 

I've had hard money offers accepted with Fannie Mae. Just some thoughts:

1) Have your agent include your proof of funds letter with every offer. They should be doing this. If your agent isn't asking for a POF to accompany every offer then maybe they aren't that familiar with how REOs work. Find an REO agent.

2) Take out any and all contingencies except 10 day inspection period. 

3) Focus on price reduced REO listings. Banks are motivated sellers too. If it's been listed for a while they start to get more likely to accept below list price offers, don't expect to get below asking on a new listing. Flag the property and keep track of it. Have your agent resubmit after 30 days or after any price reduction of it's still on the market.

4) Instruct your agent to ALWAYS ask the bank's asset manager to counter if they reject your offer. Saves time in the back and forth and lets you know how willing they are to move closer to a deal. Then discuss their counter with your agent and decide what you want to offer when you resubmit. 

5) one last thing, it's not uncommon to make many many many offers before getting one accepted. My mentor told me it's a ratio of 25 offers for each acceptance. So don't give up!

Hope that helps. 

Most commonly with Fannie Mae and Freddie Mac at least you cannot resell the property for more than 120% of the purchase price within the first 90 days. That means that if you purchased a property for $100,000 you can sell it for $120,000 the same day but not a penny more. If you want to sell it for more you'd have to hold it for 3 months which cuts into your profits and in many cases defeats the purpose.  With most deals I've found, the 120% rule gives plenty of room for a healthy wholesale fee after you deduct your closing costs. 

Hope that helps. 

I would agree that you should avoid REOs as a beginner UNLESS you have:

1) an EXIT strategy. Do you want to wholesale this? Fix and flip it? Buy and hold? If you don't have the cash yourself to close and hold then you need to have a cash buyer to wholesale it to, but even then you'd need at least the closing costs because you can't assign these contracts. 

2) Proof of funds. Technically, you should really have the funds to be able to provide the bank the POF letter. HOWEVER, if you have an exit strategy to wholesale it, then there are hard money lenders who will provide you a POF for a nominal fee and you aren't obligated to actually take out a loan with them. A simple google search will point you towards these companies. You can also use a copy of a bank statement of someone you knows you and trusts you who has sufficient funds in their account (with their permission of course), this is called a verification of deposit and in most cases will suffice in place of a proof of funds letter. Just clarify that this person is your money partner if they question it.

3) Earnest money. You can make your offer and get a "dummy" proof of funds letter to accompany it. But once your offer gets accepted you have to back it up with cold hard earnest money. For entities like Fannie Mae and Freddie Mac if you are submitting a cash offer you'll need to pony up 10% of your purchase price within 48 hours of submitting your accepted offer. If you are using hard money or private money sometimes they will waive the 10% rule but you'll still have to put down at the very least $500-1000 or more depending on the price of the property. If you're slick and have a cash buyer in place to wholesale to, you may be able to have your cash buyer put up the earnest money for you. Again, you've got to be very very slick or have a deep cash buyer's list to accomplish this. 

4) Transactional funding. If you have no cash whatsoever realize that with REOs whether you're holding or reselling you will have to close. And you need money to do that. Even if it's just to buy the property close the A to B transaction and walk across the to hall to resell the property and close the B to C transaction. Hard money lenders will do this all day long but you will have to factor the cost of borrowing that money even for just 1 hour into your calculations. There are HMLs that will do 3 day transactional loans for 1%. If you intend to hold it for much longer than that, the money gets really expensive. Hence why having an exit strategy is the first and most important thing to consider before you start. 

Hope that helps. There are barriers to entry into the REO market but if you can jump through the hoops it can be a great niche. It's how I'm starting out.

Hi Martha, one thing that jumped out at me in reading your question was this: you mentioned the duplex had been added on to--if you haven't already done so, then make sure you have an inspector who is familiar with city code make sure that the additions were built to code and with permits. Along with the age of the building, "off permit" additions could be why it's been sitting on the market for so long. You might get stuck with a project you can't get permits for because the city slaps a lien on the property for work done before you owned it.

Not saying that's the case. Just do your due diligence.