All Forum Posts by: Jason S.

Rich - it may be good for new people to hear about fees/entitlements/approvals. Everything from schools fees to buying water meters and fire hydrants. In my experience many people forget to think about these things when buying a lot. The fees alone can make a $40K lot a better value than a $10K lot. I have paid $18K for a water meter, $8K for a fire hydrant, $20K for school+Developer+mit fees for a single home. Some areas even have $80K+ in "in lieu" fees for future improvements as was the case with a lot I looked at in Moreno Valley CA.

Just a thought because you mentioned looking at the value of a lot.

Thanks for your response.

Even with the asset management company I work with that handles 6K-8K homes at any given time nationwide it is a matter of bids and follow through. Over time the good contractors get more work and the sub performers less work. But of course this means that they lose the "contractor profit" which I am guessing is something that you are capturing in your deals. For my personal deals, I do the same, but I am no where near the scale you are and for business/asset management we simply do not capture the contractor profit. Certainly if we were dealing in a focused geographic region for business, then it would make sense to do it as you are.

When we were doing volume in the past, I had a single person that would handle the initial walk through, he would produce a thorough list of all needed materials, an order of workflow, and then a schedule. He is a contractor and a former Superintendent for major tract builders. For this to be automated I am afraid you would still need a person as experienced as this to click what was needed and not needed for the job - the software could suggest, but I wonder how well it would actually pick up all of the little "this and thats".

Have you looked at the bluebook.net suite of software?

I would consider coding and developing such a program if you think there is a market for it. We would have to map it out to see if there would be too many manual decisions - but if there's money in it - maybe it would be worthwhile.

Dan - getting purchase advantage by being a nonprofit subjects you to a lot of restrictions. There is a lot of info on this on the HUD website.

Are you doing estimates in different regions?

I have found that after a few homes in any given area - knowing expected prices is through experience.

I am curious why and how you use estimating software in your business.

It all depends on the regulators.

Even though banks take, I think it was, 104 days longer to sell a home than an investor in CA they feel, according to a recent BofA exec they are having no problem selling once they have a physical home. This is also reflected in Freddie saying that they are getting 94% (from memory) of BPO on REO homes. Bad news for the pie in the sky Bulk REO crowd - if Freddie can do it - anyone can. Even I work with a private equity firm that has a proven track record of sales at 94% of BPO with 6K-8K homes nationwide at any given time.

What this means to everyone is that the banks now have a developed infrastructure both internal and outsourced where they can efficiently liquidate homes into the retail market which leads back to the regulators.

If the regulators let the banks sell, then we will likely see a lot more homes coming to market. Not 2008 dumping, but consistent available inventory which will gradually depress prices. In markets where the bubble has yet to fully burst - Los Angles, Orange County, especially beach properties - this price depression will likely be more severe than other areas that are already affordable relative to the income that is earned by the residents.

What will the regulators tell the banks? They may tell the banks to hold off in order to stabilize prices for the election (remember this is the same group of politicians that forced Solyndra to announce a plant closure after the last election). They may let them liquidate. Who knows? But if it does not happen in 2012 due to the election - 2013 will be when all bets are off.

I have not been paying attention to those borderline OC/LA cities. My profile says Upland but that's an old office address that I need to update.

I was making a generalization about OC/LA prices - there are pockets that have dropped more than the surrounding areas but everytime I am offered a house out there, I always find the same thing - too much room to drop.

I firmly believe LB, most of LA County, and OC are not yet near the bottom and we can look forward to some additional moves before the market wipes out all of those that are jumping in prematurely.

Every area has its own set of buyers. Is this home a small buy in a much more expensive area? Is this home the same price as a dozen other homes? Is this the most expensive home in the area? Is it a condo in the City? Is it in a gated community? Is it in a neighborhood on the lake?

As I am certain you know, there are many factors involved and I would have to believe that a market strategy would be relative to the particular place in the market where the home fits. I identifying that niche may help others on this forum help you in creative ways to reach that niche.

To all electric? Is that the preference in your area? I am doing some business in NC and am trying to research the various markets out there.

Chris,

To add to what you have said. I think Econo owns some and controls others.

One home in Sacramento I was dealing with them on a while back was not on their website and it was not owned by them. My negotiations were forwarded to the bank. Or more likely I would make my offer and they would adjust theirs accordingly.

On a couple of other homes they had purchased it but not recorded the GD yet - one they received the GD but not recorded and another they purchased and were waiting for the GD. They may be holding off on recording for liability reasons? Maybe? Maybe because so many of the homes have severe code violations?

Not certain exactly. Just some thoughts.