All Forum Posts by: Christian Malesic

It seems as though no one spoke directly to this point, so I will.

Yes. If the property is worth $550k, they will list it as such for the first 30 days (as a rule). REOs usually come out on the low side of market value for at least 30 days and then drop their price or are a little more flexible to negotiate after that.

During that 1st month they are also less open to taking anything that is not within 90% of asking. Some are sticklers and will want as much as 98% of asking. This is why Days on Market (DOM) is a key factor to getting good buys.

The way it happened for me was I found a property in which I was interested through my Realtor (on the MLS). We went through the process and made a deal. While signing the contract (in person) he brought up his other properties. Since then, I have made a point of letting every banker with which I deal, or come across, know that I will help them with their REOs.

So, you can make calls. I would hold off on presentations at this point. Or stop by in person. Start with banks where you know someone (or get to know someone at the banks where you already operate).

It is hard to determine the reference point you are using in your question. I will assume you mean “as compared to last year.” Unfortunately, if you live in America, this is not true. Politicians are raising the property tax Millage rate almost every year in many areas of the country. It is a real problem. I could go on for a long time on politics in America as it relates to taxes and investment, but I will refrain at this juncture.

If my interpretation of your question is correct, then the answer is “Correct. They will not change MUCH.” Of course it all depends on your definition of ‘much’ does it not?

Supply and Demand, my friend, supply and demand. This apparently is true in your area of the country, but is not true everywhere. Compare the cost of an acre of raw, unimproved land in LA or NYC or DC to any where in the Midwest. Are the cost to purchase the same? Of course not. So, now let us speak of a particular piece of land, in a particular town. Will its value go up, stay the same, or go down. The answer is “Yes. One of those choices.” This is based on the same basic economic factors that may cause a loaf of bread to change price or the hourly wage of your mechanic. For the most part, though, it will not change ‘much’.

Yes. It is very easy. You need two pieces of information. First, the assessed value of the property. You can get this from the Recordee of Deeds office in your county, either online or at their office in person. Second, the millage rate. This, too, is public record. There can be up to 3, depending on your state and municipality. 1. county 2. city (or municipality, such as borough or township) 3. school.

Then do the math.

I, too, am a super-sized guy. Back in the day, as an Air Force athlete at 6’ 6”, 225 lbs I went through plenty of nicknames by my fellow officers. I played a lot of basketball, so ‘stretch’ and ‘big man’ showed up at the beginning. Since my sport of choice was full contact martial arts (Tae Kwon Do), ‘monster’ and ‘Neanderthal’ hung in for a little while. Just about when they started to call me ‘Teflon’ since no nickname was sticking (and all the other fella’s nicknames were), a buddy we affectionately called 'PMS' (pronounced pemmis) came up with the idea to play opposites with my first name. First ‘cretin’ lived for a day or two and then ‘Heathen’ stuck like feathers on tar. I was officially christened as Heathen at the Minot AFB, ND officer’s club in 1991. An engraved shot glass sits in a locked case - upside down since I am not actively using it – waiting for my return.

I think you mean, if LTV is ABOVE 80%, correct? Loan to Value (LTV) refers to the bank's portion of the loan, meaning the remaining portion is your responsibility. This may be by cash down, creative financing with a previous owner holding a note, or equity in the property due to a good buy. Remember the definition to help you use it to your favor. It is LTV of what to what? Obviously, the loan portion of the equation is a dollar amount you borrow. The value is an appraisal that you have some control over via the rehab you plan on doing. Theoretically, the rehab will increase the value. This all assumes you buy correctly. The value is the value based on comparable properties in the area.

The better work you do up front (purchase price, manage rehab costs, rehab the biggest bang for buck areas, etc.), the more likely you can put "zero-down" on the refi loan. Some banks want 75%, others 80%, but this is the most common range.

The lower your LTV the less likely you will need any cash.

I am not aware of anything you can do other then wait for the lease to run out, give appropriate notices and not renew.

I will be anxious to hear if any other posters have ideas.

That is fair. You are looking for SPECIFIC information and not general advice. Let me try to give you a pin-point answer:

ANSWER: The first page of the sales agreement, the page that has the closing date (relevant in this case), with the last (signature) page. The dollar amounts and contingencies blacked out and then copied on a copy machine to ensure no bleed through.

Having said that, I proceed with (maybe unwanted) general advice:

I would write the 1st right of refusal clause not based on 'better' but based on closing date, as this is the point of discussion. This way you are not burdened with proving whether the new offer is better than the old. Instead you must only discuss sooner vs. later.

Ensure if you take this route that you do not accept the 2nd agreement until the 1st refuses as per the terms outlined in their agreement with you. And, that you do not present the 2nd agreement to the 1st UNLESS you fully intend to accept the 2nd if the 1st refuses. IOW, do not take the 1st a 'bad' deal as they may pull their deal and you are stuck with that bad deal (dog with the bone scenario).

So let me get this right... you want to have your cake and eat it, too? (I always thought that would make more sense if flipped: You want to eat your cake and have it, too).

You want a silver lining.

You want to win while they lose.

No deal. All deals must be win-win. You may find some legal angle, but that does not make it right... or fair. Here is the compromise. Give them a deadline. Make it fair and accomodating, say... 4 months or 6 or 8 (definately less than a year).

Or.... Walk from the deal!

My full time day job is as a contractor. We do a lot of, what is known in the industry as, 'tenant fit-outs' in the commercial arena. A large percentages of business are going to come in and want to make the space theirs.

A few examples (from the perspective renters point of view):

Think retail... I want the cash register here and the storage cabinet there, an office in a back stock room, an alarm on this case, and a motion detector in the back room...

Think office... My office will be back here by the bath, I want the copier, fax, and paper cutter near the mailboxes in a copy room over there, the receptionist desk and phones systems up front....

Think pizza shop... the ovens need to be across the mid section with a large counter up near the front. We only want two tables as we plan to be a mostly delivery business...

I could go on. What this means to you is just rehab to a black box format. Meaning, clean, rid of junk, paint walls, have a big room with bathroom where it is (rehab it, of course) and then wait to see who signs the lease. Include a $X rehab signing bonus.