All Forum Posts by: Jay Orlauski

your right Mark about the FSM rekey as opposed to the AM..I sometimes forget there's distinction between the two - also, I didn't think they did re appraisals unless it had been more than 3 months since the previous appraisal... but I'll be the first to admit I don't everything about the program - I am still learning about HUD home sales and they usually sell so fast here in Fresno that there is never a re appraisal.

Thanks for the info

A home becomes a HUD home when the borrower defaults on a FHA loan for a 1-4 unit residential property and it is repo'd by HUD. Once back in HUDs possession, it is assigned to an asset manager who secures the home, changes the locks and give a BPO. The home is listed at this price and is made available on the hudhomestore.com web site. Only HUD certified agents and brokers may submit offers and they must be submitted through the website.

There is typically a period of time in which only "owner-occupied" buyers may submit bids - if none are accepted by the final bidding day, the home then opens up to any and all buyers who have the ability to purchase the home. In many cases the home is financeable - in others it is not. The condition of the home determines the initial offering period - for example if the home is uninsurable and will not qualify for financing, they will give OO buyers 5 days to put in their bids and if none are accepted by then, it will open up to investors - whereas an insurable home would have a 30 day initial period where bidding is only open to OO buyer ( no funny business either - they are serious about really living in the house)

Also the during bidding process for insurable homes, for the first ten days no offers are looked at or accepted. On day 11 they will open all the offers at the same time and pick the one that nets them the highest amount. If no offers ar accepted than bids are reviewed daily as they are received. The first acceptable offer wins the bid, even if a better offer coms in 10 minutes later - its automated for fairness and efficiency.

oh yeah .. lenders will not loan more that the appraised price of HUD homes ( which is the listed price in the case of HUDs) and so any overbids must come out of the buyers pocket.

there is much more - but those are the bare basics of what a HUD home is -hudhomestore.com has the rest of the info if your interested - hope that helps

HUD website has not updated their site yet and says still eligible to 96.5% - do you have any links to this new information.. this seems like something I should have known about by now....

@hunter - in my state, all listing contracts MUST have an expiration date otherwise the agent can get in big trouble. Expiration dates will be different for every seller - depending on how long they want to give their agent to sell the place - it may expire after only 3 months ( or longer) and they can either renew it or go to another agent they think may be able to move it quicker.

Hi Shiva - Congratulations on your new purchase!! When we purchased our triplex, it was fully rented. The way we approached it was to review the existing contracts and make sure that we had the deposits in place - the ones who didn't have deposits we worked out a monthly payment till it was fully funded. We rewrote a new contract since it was month to month - We had to evict one tenant however because it was an owner occupied situation, so we had to take possession within 60 days.

In terms of approaching them, I just knocked on the door and introduced myself. I let them know that we were the new owners and that we would be moving in shortly. The first order of business was to find if there was any issues or deferred maintenance that needed to be addressed. There were couple of small issues that had gone unrepaired and we were happy to get it fixed up as no one want to see their own property in disrepair, plus it gave us instant rapport with the tenant, who knew were were willing to take a hands on approach to keep the place up. We went through a check list to confirm everything else was in order.

If you plan to keep your tenants, introduce yourself to them and let them know that you are the new owner and find out what issues they've been dealing with. This will give you a good heads up on the type of people they are and if you approach it from the standpoint of providing a positive customer experience, it should be an informative and productive meeting.

Of course this is all assuming you plan to keep your tenants. Just be careful about listening to seller about the type of tenants they are - the seller I bought from told me about and endorsed the "best tenants" and it turned out that they were slow to pay and were quick to leave me high and dry with no 30 day notice. The "problem tenant" he warned me about turned out to be one the best tenants I ever had and I was sad to see them leave when the kids outgrew the apartment.

Owning rental properties is as much a people business as a cash flow business and like any business you want to have happy repeat customers. Make sure your contracts and deposits are in place and that your tenant knows how to get a hold of you and where to make their payments. Be sure to provide and have them sign a copy of the rules and regulations - they don't seem very important until they start breaking rules you didn't even think you needed...that will be a fun one...if you plan to increase rents, do it when they are most likely to expect it like as soon as you take over or one year since their last rent increase/ contract. I would strongly suggest that you get a copy of your local laws regarding landlords rights and responsibilities. This can save you a lot of frustration if you get into any sticky situations where your not sure what you can do legally - trust me - your tenant will be experts on these rules ( or at least what they learned on people's court)

I'm sure you will get a lot more suggestions from the seasoned pros here who have seen it all....hope this was helpful. I look forward to reading your updates. Good luck on your new venture!!

One screening process I found useful was to set up a message line for people to call into on an answering machine. The message would include all the information about the apartment and mention that there will be criminal background checks, credit checks, deposits, etc. I list some of the rules like no large animals, no smoking and sort of thing.Then I say, "if your still interested , please leave a message and we will get back you ". I find that I get a lot of hang ups - which is good , cause that is one less person I have to explain everything to , only to have them say 'no thank you. ' the people that DO leave a message are usually more qualified and prepared for criminal/ credit checks have the deposit money - then I use a background screening company and charge them my costs.

Hi John - To figure out a good starting point, you may want to start by trying to define what your personal investment objectives are. Without knowing this , you may never even know if a good deal is staring you in the face. Are you in it for the long haul and want to develop income over the years? or do you prefer to try to make faster money by flipping something? Perhaps you want to flip - then buy and hold , then flip a new one and buy and hold again - really it all depends on what you are trying to achieve. Also put some thought into what kind of return on your money you would like to see.... this would also affect the type of deal you go into. If you figure where you want to be and what type returns your looking for, you may get a better idea of what type of deal to get involved with. Also, try attending a few investor meetings in your area - you may pick up a few great ideas - hope this helps some.

I too have thought about wholesaling multi-families though I am usually a "buy and hold( collect rent)" type of investor - there has been many good deals here in the Fresno area. Some of my thoughts on holding were that the rent rolls would cover any holding costs if it took too long to move the property - In fact, at the rate that home prices are rising, and with rentals in such high demand in the central valley, one could even hold onto it for 6 months before flipping and collect some decent income and experience a greater return as rising prices push up the sale price beyond what a 30 day flip would provide. I would be interested in finding out how you do. Please keep us posted.

there is still deals on the MLS, at least here in Fresno - just be sure to connect to a Realtor with direct access to the MLS or you wont get up to date information. Zillow and other places like that are notorious for being out of date. Local magazines are usually a bust too , since by the time they are proofed and distributed , the houses in them are usually under contract - of course that is here is Fresno - obviously the markets are going to be different elsewhere - good luck!