All Forum Posts by: Mark Ferguson

My goal is to create passive income that I can live off without working if I don't want to work. Part of that strategy involves buy and hold as many properties as I can. I could easily flip a lot of the rentals I currently hold, but then I would stop receiving income, lose my tax benefits and stop the mortgage pay down process. True I would have more cash when I sold, but I have to pay taxes on that cash and after expenses it's never as much as you think it will be.

The way I look at it, he already has a bird in hand. He needs to put that bird in a cage and feed and nurture it. Find other birds he can put in the cage who will mate and create new birds. Eventually if he finds enough birds he will have a sanctuary he can retire off of. Or he could sell the bird now for a profit and just deal with buying and selling one bird at a time.

That's just my philosophy, we all have different goals and dreams.

$40k profit now or $130k profit in a few months with some rehab. I know what I would do! If it cash flows well, you could always keep it a year then refinance it and get your cash out that way tax free.

Great answers Bill! I am a HUD broker and had a buyer take my sign off the property and put his up before closing without asking! He quickly replaced my sign and took his down as HUD was going to cancel his contract imediatley and take his earnest money for tampering with federal property.

For everyone thinking of doing anything to a HUD home before it closes remember it is federal property and a felony.

How much will rehab cost and what do you estimate value is after fix up? What do you think it will rent for?

being a HUD listing broker I have to teach at least one class a month to agents and buyers on HUD's process. If there is enough interest I can set up a class for investors or agents in the Northern Colorado area. I am in Greeley but would be willing to travel to teach a class if there is enough interest.

Things I would cover:
when investors can bid
what prices hud usually accepts
inspections and earnest money
costs assciated with HUD that are not typical on normal sales
How to find HUD homes

I can also cover questions and topics on how other Banks and REO companies handle their listings.

If ther3 are agents interested in a seperate class I am approved to give CE credits!

Austin Samber, Yes I inspect all my listings when I first receive the assignment. If I get a new one out there I will be heading that way. Dalrie Skrabak out of Fort Morgan handles my inspections and showings after that.

HUD is very strict on what they will take for offers. They allow the asset managers to take abotu 11% less than asking price net. That does not include commissions which bring that down to about 5% net. Only if the home has been on the market over 90 days will they be able to ask HUD for special approval to take a lower bid. The home has to be on the market actively for 90 days, if it goes under contract that time period stops.

I already have a ton of ideas to improve our business from the site. We have always gotten our deals from the foreclosure auction or MLS, but I see so many people using direct mail and advertising. I am definiltey looking into that now as well.

Austin Samber, Our prices have increased 20% in some neighborhoods and there are less deals than a year or two ago. But, with increasing prices you don't have to get as good of a deal to make it work. HUD has the best deals, but as you know investors have to wait 30 days on FHA insured HUDs and 6 days on uninsured so those are hard to get.

I list HUDs out in the Sterling area as well and have one on Valley Vista now that just went under contract.

I have a couple of insights that may be helpful as an agent and reo agent. I have no idea if this applies to you, but if it does maybe it will help.

1. 99% of banks won't look at a contract if you don't have an agent representing you with a state contract.
2. What kind of offers are you making? You say you are makin 5-10 offers a week. Are they decent offers or low ball offers? If you are making 5-10 low ball offers a week most agents aren't going to jump over backwards to help you. It's a lot of work with almost no chance of getting anything accepted.
3. You say agents not agent. Are you using multiple agents at the same time for different properties? An agent is not going to be loyal to you and work to find you deals if they think there is a chance you are going to take the info they gave you and go write an offer with another agent. The biggest turn off to many agents is a buyer who uses whatever agent happens to be closest or name is in the sign. The only deals they will send you are their own personal deals that probably aren't that great. It's. usually best to find an agent who will work hard for you and in turn you use that agent for everything. That way you are both motivated to work together.

Have you talked to a CPA? These are very complicated matters and should be discussed with a local expert. I have separate companies for my real estate and flipping businesses. Being an agent will save you so much money and give you a huge advantage.