All Forum Posts by: Jay Hinrichs

@CHRIS MITCHELL 

  be sure that you let those working on the house Know you have a lender in place and they will get paid through loan proceeds.

@CHRIS MITCHELL 

  this is the major difference between new construction and rehab. IN new construction your hiring basically top end subs  all of them can do net 30 deals which alingn to your lenders request.. when I was loaning I would release 30% at close but it was to very trusted and proved borrowers.. If this is your first time with the lender they don't want to release the funds then the house never gets worked on and they are upside down.

50k down to studs and back up again with nice finishes is in the ball park for sure.

problem with rehab contractors is many of them and I am sure this is what your finding have no money and no credit so they can't get started without money up front. Maybe you pay more for the top end guys and your problem goes away..

Johnny lunch bucket rehab guys can kill you if your not carefull.. don't show up do crappy work etc etc. so in some instances you get what you pay for.

@Phil C. 

  to get objective opinons make sure the PM is not owned by the company selling you the house...

@Jerry K. 

  well I guess Mississippi is not up to speed on online bidding although this was 07 when I did this they may have graduated.. I know when CA counties when to Bid or Assets that took a lot of the fun out of TAx deed sales here..

@Jason Eyerly 

  too add to the incredible wisdom and experience of the above.. When your dealing with low value Notes like these  IE firsts in the 40 to 50k range.. VALUE of the asset must be established.. many of these homes if they become vacant and if they are in the mid west or rust belt only have a value to a WHOLESALER that will pay usually 5 to maybe 15k for these type of homes...

If your new to note investing my suggestion is just like owing rentals try to find a note close to your home so you can drive it, check it out and make darn sure its worth what you think its worth then establish a value if you have to fully foreclose on the borrower and your house is trashed when they leave..

Having funded hundred to really thousands of mid west Wholesale deals its rare that a house that goes through the process is in any kind of condition to sell or rent..

All the other issues like tax's foreclosure process arrearages proper docs etc etc. is something you can do from home for sure.. Just make darn sure you establish our value. And you know the foreclosure rules of the state.

There are a lot of pretty good performing notes out there for conservative cash flow investors that will do as well as buying rentals COC ... But I see the attraction of buying these at huge discount and making the delta.. But I suspect those that do well at it are very versed and cashed up.

Hate to be a small investor and you buy one or two with all your liquid funds and you pick poorly and lose.

@Wayne Brooks 

  I consider myself fairly versed at many RE investments.  And my experience was in TAx Deed. and that is like foreclosure auctions very structured you know what your bidding on and once you own it you can sell it.. ( we got title to insure day we got the deed) not all title companies will do that.. Like FATCO at the time in CA would not insure until you owned it 5 years..

any way so I thought I would do the certs but like I said it was controlled mayhem. And I forgot to say.. in Rankin county this guy gets up and makes an announcement to the crowd and say I am going to bid every Cert down. and sure enough the hour or so I sat there he bid every cert and bid them all down to 5 to 6%  I did not stay long as I said.. but I bet he had a few mil with him and spent it.

there was an article in Forbes a few years ago  well maybe more than a few.. But it was about a company ( Hedge fund type) that moved into FLA  tax certs and bid everything down to 5% or lower.. gist of article was  is this a smart investment?

@Jerry K. 

  the sales I attended   ( hinds county MS and RAnkin  MS) moved so fast that you really would need a team to track and understand what was coming up.. the certs were gone I a matter of seconds ... the locals all were up front they got 80% of them in kind of a hand out routine.. only occasionally did one go to the rest of the room say 50 people. I had brought 50k with me to bid and only spent 5k buying ( well not really knowing what I bought probably junk) and packed it in and went and had some BBQ and soul food   :)  In your market is the sale a little more organized and at a pace that you can identify the cert for sale with the property that is associated with it... in those counties in MS they sold oh probably 10 to 20 thousand certs in 3 days... it was a mad house..   I would think outlier little counties could be a nice place to do this were you don't have all the competition and there are not thousands of properties to check out.

@Jean Norton 

  Well that return will take care of one lunch   LOL... if you have mass and scale its a nice play I have been to a few of the sales, I was used to CA tax deed and the tax cert sales were wild and the good ole boy  major players defiantly controlled the room and cherry picked the certs... Best part that I saw was the tax collector said " anyone just wanting to buy 5 or fewer come up here now and pick your 5 and you can go home"  I guess that's what they call over the counter.. I bought 5k worth and I am not sure I ever got a redemention I kind of lost interest and never tracked it.. Maybe there is money in the found money fund of that state that belongs to me  won't be the first time I have found money in a state I forgot I had or lost  track of :)

@Brent Watson 

  as mentioned about the CA pre foreclosure laws its the same in OR and WA .. laws came in about 07 08  and it pretty much put those that follow the law out of business I know we stopped.... but many don't care about the laws and just learn a technique and go at it just like the law does not exist. And frankly in my experience people that lose homes or about to lose them once they make a deal and move you will never hear from them again.. they move many times out of state and so this allows folks to continue in this B/C it would be the seller that would have to raise an issue with the authorities... At least that was my experience.

@Brad Starling 

  Nice to See a REaltor working a farm.... I think the industry has gotten away from that.. in our market PDX I have never had a Realtor come to the door.. when I lived in Palo Alto it was common..

when I was buying pre foreclosure in PDX.. I had 3 two person crews knocking every NOD on the list.. One women one man... The women were far better than the men ( and smarter in this case LOL)

When I was in the timber business this is how we got many of our Timber contracts and bought timber ground.. Knock on door ask person hey you know who owns that timber stand over there... they either say they do or know who does.. ( now google earth is how we buy timber).. But you talk about a thing of Value.. My partner who did the door knocking always had either Fresh Salmon Smoked Salmon or Elk Jerky at the ready for a door gift. then if he landed a big patch of timber or was working on one say 1mbf or better that owner got to go fishing on his RAnch on the Oregon coast and that sealed the deal 99% of the time.

I can't imagine though door knocking in the iffy neighborhoods If your trying to buy low value assets I would think that is pretty dangerous... In nicer hoods were safety is not an issue ... Like my dad always said RE is a Belly to Belly business... Hard to make deals purely on the phone if your going direct to sellers.