All Forum Posts by: Ann Watkins

Originally posted by @Ted Klein:

@Ann Watkins
You have really laid it out there. ; )  From what I am understanding, if I want to improve my chances, go hard on the EM, but be sure that I am comfortable with the inspection one is able to do. This seems like it is a bit of a risk. What are the chances of getting to do the walk through inspection? From what I understood, many properties were closed for a walk through. How does one go about getting access to the property?

Properties that are on the MLS will definitely be able to be shown. You may be required to submit the offer first, before you walk the property. Online auctions maybe maybe not, they may even say drive by only or do not disturb tenants. In those cases you have to know just how much you want the house, regardless of the repairs.

I would think so. I don't think those people will leave voluntarily. So then you'd be at their mercy to get them to take cash for keys....your money not the seller's.

You're most welcome!

Originally posted by @Ted Klein:

@Ann Watkins

So you mentioned "you may be having to put down as much as 5% EM and if it's a multi-family or commercial listing having to agree to let the EM go hard" Does this apply to sfr's?

 It can, it really depends on the Asset Manager. Commercial listings (I'm only referring to multi-family apartments) will always have a higher EM and going hard is just one way to separate the serious buyers from the others. I've had sellers use this as a tie breaker. I've also won properties for my own account by doing this. As a broker I can give back my commission or waive inspections for properties I really want. But I only do that if I've done as much of an inspection I can do with or without utilities being on.

If I have an owner occupant/non-investor who wants to waive inspections...we sit down to discuss and then sign lots of papers. I don't recommend it, but if they insist I have to abide by their instructions.

Some auctions will come with large EM requirements and/or buyer's fees where the buyer is basically paying for the seller to bring the property to market. In a typical SFR listing the seller is paying the commission but with auctions and some REOs the buyer is expected to pay the fees.

Thanks Ted. I share from experience. I had a client who won a HUD bid, got the water utility turned on, house was supposedly winterized but field maintenance didn't correctly do the faucets and the house flooded. We went back and forth pointing fingers but in the end she walked on the house and HUD gave her the EM back. Their Field Maintenance admitted he was at fault but HUD wouldn't come down on the bid amount or agree to make new repairs. It was a great buy too.

It's not uncommon. I don't do the online auctions for this very reason. At the Harris County Auction...which is going on this very minute...they now have Auction.com in the house. It is now the carnival that the Harris County Auction used to be. There are folks walking around on laptops and smart phones making bids, everyone is talking, and it is very chaotic. You'd think you were on the floor of the NY Stock Exchange. So I guess that means someone is getting some good deals.

I wasn't so much turned off by the work needed on these auction homes, as I was by HUBZU and others selling homes still yet occupied. You win the bid and you get the prize of evicting previous tenants. Which as we all know could take months...only to find they leave while tossing a lighted match in the door. I'm poking fun of course, as most of the time they just trash the property and kick as many holes in the sheet rock as possible before leaving.

At the end of the day, don't let any of this deter you from moving forward. It's just good to know how to better your odds of winning without getting a money pit.

Hello, I'm interested in Houston properties. Thanks so much.

Become a builder

Christopher Phillips Auctions also fail because the very process of an auction is sometimes the banks way of pricing a property. They will initially list the property severely under FMV to get a bunch of bids, cancel the auction take the highest bid and that becomes the new list price. I see this moreso from banks who don't use Realtors to properly determine value. At the county auctions banks will bid against you on their own foreclosure to secure their position, then turn around and list the property.

Hi Ted, I would recommend you using a Realtor. I perform BPOs (Broker Price Opinions) for banks on REO properties and can answer some of your concerns. My job is to let the bank's Asset Manager know the current condition of the property, market conditions of the area, specifically any deferred maintenance or repairs necessary that would affect the subject property's value. So yes, properties get listed at FMV less necessary repairs. At some point I may be awarded the listing. It goes without saying that my initial values are part of what determines if I'm successful in selling the property. as well as if I get more listings. On the other side of the fence is me representing a client who is the buyer. It's critical you use a Realtor who has experience with REOs. If it's a HUD property your Realtor has to be a registered HUD agent via their brokerage to even place your bid. That's just a minor requirement. Being versed in how to write your offer to ensure you are a successful bidder is also very important. But more than any of that is knowing how to protect your Earnest Money (EM). Most REOs will ask for a higher EM deposit for a cash offer. Banks know investors take the shot gun approach and will make low bid offers on many properties hoping to get at least one. This not only ties up the Asset Manager's and banks time but also can be a major waste of a Realtor's time, when the investor walks on the bids they decide they don't want. So with that, you may be having to put down as much as 5% EM and if it's a multi-family or commercial listing having to agree to let the EM go hard (meaning you waive an inspection period) so you could wind up losing your funds if you or your Realtor don't know what their doing. I always tell my clients if we are showing a HUD or other REO have your inspector or GC available to walk the property that day. With some REOs if you're a non-owner occupant your option period is only for you to get out of the contract, but they will not refund any EM deposits. Also, when picking your inspector or GC make sure they know how to cost repairs in a home that's been winterized (water lines and gas lines capped) or electrical utilities are off. This may mean bringing an air compressor to pressure test lines and a generator to check mechanicals. I see more and more properties going on the market with disclaimers "utilities will not be turned on for inspections). You don't want to find out your great deal is a money pit. So I've said all that to say yes you can bid without a Realtor but there are a lot of issues you could overlook that could wind up costing you money. Hope this helps!

Originally posted by @Ryan E.:

Ann Watkins

I find your comments pretty ironic considering I've seen a lot of protesters on the news who are "excited to a frenzy and foaming at the mouth" and actually "drawing blood." To me it looks like some of the most divisive and discriminatory citizens have been unleashed....the liberals literally throwing a fit and doing exactly what you claim the Trump supporters will do. Pretty interesting, don't you think?

As far as it relates to real estate I feel terrible for those who suffer property damage by protestors.

People on either side were going to protest regardless of who won. Peaceful protest is a right and a privilege as Americans. I think a lot of people are going to be shocked to find out Trump couldn't care less about the middle class. I hope that's proven to be wrong.

Originally posted by @Andrey Y.:

Originally posted by @Ann Watkins:

Michael Gansberg I have no doubt Trump has plans to and will waffle on much he's promised. I'm continually baffled by anyone who voted for him when it was plain to see he said whatever he deemed necessary to get the nomination.

So now my question is....when he fails to follow through on anything anything at all...what happens to the masses he's excited to a frenzy literally foaming at the mouth ready to draw blood. "What they gone do" ?

He can't control them and couldn't care less. He's fine honed and unleashed some of the most divisive and discriminatory citizens of the United States we've heard from since the 60s. And these folks have expectations...they want all that he's promised.

 Trump said whatever it took to get elected? Hahah.. politics is very new to him, he has only developed this art recently. Clinton had about a 30-35 year head start on him, and might I say did a phenomenal job saying everything possible to get elected and peddling to the lowest common denominator, unfortunately it did not work out for her. Better luck next time I guess.

This is about how we as investors will fare under a Trump administration. But if you actually don't believe what I said about Trump look up some of his quotes on what he actually thinks about the Republican party and our political structure, particularly the electoral process. And those thoughts and comments run the gambit of his adult lifetime.  It was a joke to him and he's probably more shocked that he won than I am. But he has always been keenly aware of our political workings and how to manipulate it to his advantage.

Trump is definitely not new to politics.

As to the future of REI...I'm already getting bombarded by invitations to refinance (my paid off properties) before interest rates go up in December. For those of us who do use bank and other financing...yes this will be a downside. Waiting on the eventual foreclosures from reduced wages won't happen immediately, so it's nothing we can look forward to immediately, as investors. And to that if much rather be making home owners than buying homes that perfectly good homeowners lost due to Trumpism. One thing is for sure moving forward will be quite interesting. If he starts messing with the economy China might just call all his loans due....hey has a POTUS ever filed bankruptcy? According to Trump that's just business as usual.

Michael Gansberg I have no doubt Trump has plans to and will waffle on much he's promised. I'm continually baffled by anyone who voted for him when it was plain to see he said whatever he deemed necessary to get the nomination. So now my question is....when he fails to follow through on anything anything at all...what happens to the masses he's excited to a frenzy literally foaming at the mouth ready to draw blood. "What they gone do" ? He can't control them and couldn't care less. He's fine honed and unleashed some of the most divisive and discriminatory citizens of the United States we've heard from since the 60s. And these folks have expectations...they want all that he's promised.