All Forum Posts by: Jay Hinrichs

@Daren H. by and large if a parcel of land in any major metro city was on MLS and did not sell then it was overpriced probably by a lot... or has some other hair on it.

IN markets were new construction is viable and hot land deals sell in a matter of hours or days at the most to builders looking for lots.

my take on Texas as whole ( not Austin though) is there is so much land that builders and developers have a lot of options and unless you have some sort of infill in a super hot spot  your dealing with a parcels with limited value or desirability or physical constraints for environmental or regulatory impediments.   

And with many mid west cities new construction infill in the SFH areas is not viable as you can buy existing homes for half the price it would cost you to build a new one.

@Account Closed   Morning Marvin  had not heard from you this week ... when folks list deals on your site what do you charge them to do that and or do you charge a buyer premium along with a seller list fee?  I have a few wholesale deals I could put up on your site to help you create more inventory.. Let me know

@J. Martin   I will be hanging around Berekely tomorrow I have an investor meeting at 1pm  can meet before or after fly back to PDX Sunday early.. let me know

503 789 2451..

On the Noe Valley property its a large 2 car that will convert to a large one car and Add 600 sq ft of living space.. Nice property right off of Delores level street ..

the only state I have heard of that you need a license to sell your own RE is Wisconsin.

the issue comes with those that flip or double escrow or make bird dog fee's or assign contracts.. Ohio has started to crack down on this activity and there was a thread here were a person in FLA got turned into the DRE and they are pursuing the case as an unlicensed activity

Hey guys,, I flew to sfo today and looked at a deal in Noe valley... 1.6 to buy  600k rehab 3 mil sale price... the increase in value comes from taking a large 2 car garage and adding 600 sq ft. it comps well...  500k in equity is needed.. would anyone be interested in coming in on this deal for a straight up prorata equity share..with the promotor who has it under contract making 20 to 30% the rest going to the equity partners.  I would put a 1ook into it as it would be my first SF deal and I don't want to go all in :)

@Trevor Ewen 

  good point when I stated building homes in SC... I had a long time family friend that I knew was rehabbing in HIlton head.. got a hold of him and 6 new constructions later he is running the show.. absolute trust quality work and profitable all at the same time. if not for him I would never have ventured from ORegon to SC to build new homes.

@Marty Happle 

  actually Marty I have owned two hard money companies that had 50 million dollar books of business I would not make a second loan.. I made a few but very few in my 30 years of lending money.

And I have bought many pre foreclosures. and my experience was that the owners did the opposite your talking about they would keep paying the second and not pay the first because the payment on the first was so much larger  :) 

And in a foreclosure situation you can just wait like you say and pay off the first.. But the payment you make on the first is going to include all the firsts foreclosure expense's all the late fee's and other items.. If you get a NOD in the mail on the first and you as the investor just make the first payments you eliminate all those expense. and you then prosecute your foreclosure on the second.

Now if you and your friends are buying very low value notes behind very low value first that's a nother kettle of fish.

However one the west coast we see the 100k second behind the 700k first very common and in those instances a foreclosure is one expensive proposition.  So investing in Seconds is very risky in some instances.. however if you have the wherewithal to cure then its no big deal you know what your getting into..

My point was you take the folks on BP that tend to be newbies trying to learn about RE and they think they can buy a small second and everything is going to be rosy that just is not the case.. AS you state there is a 20% failure rate.. what if you buy one note and your that 20%... Lots of work in foreclosing grabbing the asset having to do an eviction then having to rehab the house and if they are in low value areas maybe and high probability you can't sell it for what your in it...

AS for saving folks homes that is admirable of course I have donated for free more homes to Habit for Humans that most people will ever own... So I get the charity aspect.

@Jerry Poon 

  its not Memphis specific its out of state investing in any of the so called cash flow market I don't care where it is these occurances happen all the time... the cheaper the homes the more the less than honorable folks come in buy them and flip them to the uninitiated..

there was a post yesterday about the 900 dollar house an investor bought in Detroit he was very proud of it... Well bad TK buys will buy those and resell them for 25 to 40k to folk that don't know any better.. The person who bought it if it works our great if not he is not out much and can walk away..

The person In Memphis I mentioned just happened to invest there. but as I stated it could be Atlanta it could be Philly it could be any city in these price ranges.. because that is what every one buys to hit the so called 1% or 2% rules.. and they are dominated by lifelong renters and all the issues that go along with it..

@Jerry Poon 

   has anyone been intentionally  screwed by buying out of state.. does a bear sh in the woods heck yes... its all to common..   Investing out of state is super risky for those that do not know what they are doing and or have limited capital..

The thing is people in CA and in other countries think what the heck its cheap lets give it a go only to find out its very difficult and extremely risky. those that are telling you here on BP that it is  not have another agenda they sell out of state properties and only talk it up ..

I wrote an E book for Aussies on how to invest in the US as they were getting hosed left and right by US marketing companies and less than honorable TK operators.. It is appropriate for CA investors as well.

I personally foreclosed on more than 200 LA based investors that had no clue as to what they were doing got talked into buying out of state by LA based marketing companies that neither owned the asset or were licensed to sell the asset.. IT was a night mare I would never do it again..

I have just finished trying to help one LA investor that bought 3 homes in Memphis a few years back.. One is boarded up has not been rented in 2 years. the other they tried to sell on contract but the buyer put a tenant in is collecting rent and not paying on the contract and the other one the tenant just left and its 5k to rehab yet again and they are with the best management company in the market..

so if your bound and determined to go out of state

1. find a market you like and make contacts with the locals there

2. do not buy through LA based marketing companies what do they bring to the table they have never even seen the house your going to buy they are only loyal and talk up those that pay them.

3. use the same common sense if you were buying a home in LA find a reputable agent get MLS listing do not trust ARV values from promoters those are blue sky.

4. get an independent home inspection just like if your were buying a home to live in.. do this before you close and make sure you know what your getting and ask for items that are problems to be fixed prior to closing.

5. buy at the top of the market not the cheapest those will have problem tenants and its very likely you could lose all your money on super low end.

Lastly if you are dealing with out of state TK go direct no need to pay outside selling agents  its just tacked on to what your paying for the house. houses out of state are just not sold like they are on the West coast think about it why are these companies trying to sell homes 2k miles away from them... Because they know CA buyers will over pay and they could never get the same locally the locals just won't pay that amount  the locals will buy the trashed houses rehab them themselves and rent them..

Caveat Emptor

@Christopher Baustert 

  no changing those hoods  devils night is coming up.. You live in CA big learning curve coming your way is what I predict.

In the day I did Oh 250 hard money loans in Detroit that was circa 2003 to 2006... I ended up with a few REO's and they were night mares.. so just think of the lenders or the investors who paid 50 to 100k for the house you just bought for 900 dollars how good of a deal was that for them... And streets there just turn. there is an over supply of homes there like 40 to 50k homes can be bulldozed and they would not be missed.. the local boys will do well they are on it and can manage it. and are probably laughing all the way to the bank but out of state well that's another kettle of fish all together. best of luck