All Forum Posts by: Jim S

From what I have seen, it involves a fortune teller and a deck of cards :D

When I buy properties for $50,000 to $400,000 I always put down a $20,000 EMD. It shows I am serious and willing to put $$ into the deal. If you intend to buy the property, why wouldn't you put more $$ on the table?

90 days is the timeframe that the FHA stipulates if you are selling to a buyer getting a FHA loan. But holding an REO for 90 days is not that hard as it usually takes me 4-5 weeks for rehab, time to sell it and then 4-5 weeks for the buyer to close. If you do sell it in under 90 days to a FHA buyer the only real issue is that they will most likely be forced into obtaining 2 appraisals. It's just more hassle and potential for your property to not appraise at what is needed.

I have done many REOs but only one short sale. We had to negotiate with 2 banks and then the original owners had no where to go so we took pity and let them stay an extra 3 weeks. Not looking for any more short sales but if one falls in my lap...i would do it again if the deal had lots of $$ to compensate for the expected hassles and time expenditure.

Maybe there are two schools of thought being portrayed here. One is to know how much $$ you will need to put into the house plus your profit and offer a price based on a formula you feel comfortable with following. The other is to try to get the house as cheap as possible assuming the purchase price is always negotiable and if there is a high DOM that the bank wants to dump it. The first scenario is more calculated. The second is more opportunistic.
I usually use both depending on how much I like the property and the DOM. A new property with less than 30 DOM - if i want it- i would bid at or slightly above the list price.
If the property has lingered for more than 40 days- i would start to take liberties with my bid price.

In my opinion, end of the year is the best time to buy. Banks want to get the turkeys off of the books. November and December is the time to submit a pile of low bids and see which sticks. Last Fall I submitted a bid of $280,000 on a $330,000 asking price. Was rejected. Late November they lowered the market price to $275,000. I offered $250,000 and got it in December.

Cheers,
Jim

I put in a more than full price offer on a reo from b of a. I was scheduled to go to closing and a day before the title company calls me and tells me that the closing is delayed. Same thing happens the following week. I finally get the truth that b of a did not have legal ownership when they engaged in a contract with me. Nine months later I am still waiting. I still have the house under contract and they are still holding my emd of $ 20,000.

Better question- who is a bigger pain in the a$$? B of a or Fannie Mae?

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I set up a second account at my bank which is only for tenants to make deposits. I then use online banking to transfer the $$ to my main account. I always felt better having the two accounts segregated.

Montgomery Co, Maryland is the same. There were only 75 properties active on my reo list. Ugly houses are good as they scare most people away. 30 days plus on the market is the 1st step and then low ball the bank. Made 10 offers last week. 5 responded and scored one.

The policy from Foremost has a $1000 deductible. $300,000 in liability. And it covered theft.
The policy is $1972 per year with an initial payment of $410.23 for $170,000 in total home coverage. The will refund payments with a minimum policy premium of $250.
In a perfect world I will hold a home for 91 days to clear those frickin' FHA anti flip rules. That is $164 per month or $492 for a 3 month period.
I thought about asking to increase liability but forgot when signing up for this policy. Would consider moving closer to $1M in liability on future projects.

Jim

Called Foremost. For a home with a dwelling replacement cost of $170,000 they will offer a policy of $1971 for 12 months($164/ month). They require a $400 deposit and will break down the remaining balance into 9 payments. He said to just cancel the policy when I sell the house and they will refund the extra $$. They have a minimum $250 cost that is not refundable.