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Hey Marvin,

Yes, I'm interested in knowing about this. It just seems unreal to be able to buy a distressed property tax deed for $500 on a home worth $100K?

Good morning all,

I was just reading some information about some more investment strategies. I came across an article about Buying Tax Deeds for pennies on the dollar (i.e. buying a home for $1,000 free of mortgage and owning a home possibly worth $50K or $100K and then reselling it for a huge profit).

I am interested in hearing comments and opinions about this strategy. Let's get talking!

Marvin,

I'm interested in knowing the answer to your question as well. I mean, if you are making an offer on a property that you haven't seen, you could not possibly know a Repair Value. So, you couldn't subtract that from the formula. I think that you would use the same formula without subtracting the repair value and then once you go out to view the property you can negotiate with the seller about repair costs, and then simply amend the contract to reflect this. I don't know..... :roll:

No, no Marvin,

I understand your question completely. Your saying that even though you make an offer of 30% below fmv what if the repairs are of high value, which in turn makes the deal not such a good deal after all? I get it. But, to answer that simply, I think I would just make offers on homes that seem to not need that much repair by what the advertised property description is. Remember, your LOI is not a legally binding agreement, so after your offer is accepted, you are more than free to go and look at the property, and you can always amend your LOI determined on what you find wrong with the property, especially if it would make your deal not a good one for you.

I think I explained it? lol

Anyway, that's just how I see the answer to your question.

Good morning all,

I was reading a post by one of the Guru's on this site. He was explaining how to get started in REI and the steps to take to achieve a financially stable goal. One of the points he mentioned was in order to open the possiblity in getting properties under contract, it is important to be making tons and tons of offers every week by way of a Letter of Intent (which he included at the end of his post). He said to just fax the LOI over to the Realtor or brokers office and they would receive it and respond yes or no or counter. My question is, are the LOI's sent before actually seeing the property? I mean, would doing due diligence on the property first, and then making an offer suffice? or should you actually go out and view the property and THEN make an offer?

I usually get the listings from my Realtor and then I set up a time and day to go out and view the property with my Realtor. I then run my numbers the same night and get back with my Realtor the next day as to whether or not I want to make an offer. My Realtor will then fax over the Letter of Intent for me and he will then wait to hear back from the Seller's Realtor and then will respond to me.

I don't know....this is usually how the process goes for me. Maybe it should be the other way around like the Guru said, and I should not wait for my Realtor, but just send out LOI's on properties (offering 20-30% below MV) that I see, and go from there?? Maybe this is the reason it seems like it's taking me sooooooooooooo long to get another property under contract???? because I'm not making enough offers.

I look forward to hearing your comments!

Thanks

Hey Marvin,

Good to hear from you...as you can see I am a bit stressed right now. But one thing I have learned from studying and listening to other investors is that you cannot allow our emotions to get involved. You can never be too excited, until after you leave the closing and you have your money, and you can never be too disappointed just because one investor doesn't feel you have a good deal on your hands...Like Rehab702 said, just move on to another investor.

P.S. About shadowing...maybe we can set something up. I want to get through this deal first though...and then you can shadow me on my next fresh deal. Don't forget I'm also a newbie...but I'm learning!

You're right. This is the only investor that I have marketed this property too. I am waiting back to hear from another investor right now. If I hear the same thing from 3 or 4 investors I will consider this deal a bad deal...and then really look into what I may have missed.

Actually,

The comps range from $290K to $360K

No, the investor did not say what he believes the house will sell for. Should I ask him? This house is back on the market after being under contract....I was told that the contract ended up falling through because the buyer did not have financing. All I know is that accurate comp numbers don't lie...and there were sales ranging from $290K to 300K.

I just received an e-mail from the investor saying that there is no way that this house will sell for 300k with or without repairs, and that my purchase price of 215K is a bad deal!

Now I'm nervous...what am I doing wrong????!!!!

Good afternoon everyone,

I have a question...

I have found what I believe to be a good investment property. The asking price is $229K. I have an accepted offer of $215K. The comps for this property show a house that was sold for 300K a couple of months ago (this was the only recent comp). The property that I am referring too needs landscaping in the back and on the sides; re-painting of the master bedroom; re-paint front steps; can choose to update kitchen cabinets. The house already is newly painted, new roof, new HVAC system, etc.

Here's the thing....I estimated the repair costs at 3K. I spoke to an investor that did his due diligence and said that the property could not be raised to sell for 300K with just 3K in repairs done to it. Why is this if the comps for the area are 300k? and house does not need major rehab work?

Any opinions or thoughts will be helpful!

Thanks.