All Forum Posts by: Jay Hinrichs

@Neil Goradia 

  if those numbers are true and the development cost are in the ball park of 25k per lot like they are here in PDX.  Then I am your equity partner.. send me an e mail

[email protected]

@Bill Gulley 

  your description of the deal is pure fantasy or wishful thinking .. at least on the west coast never going to happen... I guess it could happen with a desperate seller who did not know what they were doing and a bank that was thinking pre 07.. and since your building a new sub whats with meets and bounds.. this would be lot and block descriptions correct...

@Neil Goradia 

I just closed on the first A and D loan my bank has made since 06... here are the stats

27 lots  appraised at bulk for 1.7 finished... land was 750k development cost all in 800k.

bank loan us 75% of bulk.  which is about as good as your going to do... so we came up with 460k in cash to close... Lots are worth 95k retail.. but we will build them out.

Bank would not make loan if the equity into the deal was true Equity form the partners not a loan to the partnership IE 100% financing.

NO seller is going to subordinate to this as Bill G suggest at least one with half a brain.

land development is big boy territory with big boy money.. you need to have partners that are not only your engineer but have cash to pull this off. NO bank is going to go on the deal as you described or as Bill G has described not going to happen...

find an equity partner or flip it to the builders for a fee , If they have the werewhithal to pull it off..   500k for 22 acres is a smokin deal for 450k houses.. I assume the lots will be worth 80k or better correct?

Good luck but don't chase rainbows or listen to those that have not gotten an A and D loan lately. this is not pre 07

@J Scott 

  Oh J your mean... between Aaron kicking out tenants for sport and this whats a poor wood be investor to think.

I know as a RE broker I just flat would not work with investors that came form the guru seminars ...

If one wants to make 100 offers a week hire someone to write them for you  don't count on some agent to do it.. not a good use of their time

@Mike M. @Hattie Dizmond 

  that is more in line with what I see in MS... Hattie please show me one seller of homes in Texas that even brings this up to out of state folks.. If it were not a direct question on BP no one would mention it especially those that make money selling these properties..

so I think we have done good here tonight people interested in Texas may acutally want to know about one of the major issues with owning there

@Neal Collins 

  When I did finally get to sit with the person that was motivated to sell if they were in foreclosure  99% were.. I would ask them how many letters did they get.. Average response was over 50... this was back in 03 to 06... letters are shot gun approach so you need to send out thousands upon thousands to get reposnes. Unless its a very target type of property your going after but if its what 99% of BP folks go for SFRS your just one of hundreds hitting the same owners. so its the luck of the draw. and why its important in my mine to answer your friggen phone live

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@Neal Collins 

when I was in this business we did both.. we never sent letters. we either called if we could find a number (much harder today with everyone having a cell phone) or we knocked doors.. I had a team of 6 that went out I pairs and knocked on every NOD in my 3 county market.. I paid them on performance and small salary. I only went to put the deal together once they teed it up for me.

In my timber days we did telemarking... Rural folks usually have phones and they never get telemarketed so my telemarketers could have some nice conversations this generated multi millions in annual gross revenue and not a bad net at the end of the day...

@Hattie Dizmond 

  maybe part of the due diligence process in your neck of the woods is to have a geo tech do a soils report for you so you are aware if you have bad dirt.. or dirty dirt as an ole timmer in Yazoo MS told me... when one of the homes I foreclosed on would broke in half.

If you have bad soil you put that into your offer as you know somewhere down the line your going to be putting peirs in... If your report is clean then your in pretty good shape..

Its just that so many folks buy on inpulse from TK companies that they hardly do any due diligence other than watch the webinar  LOL

@Hattie Dizmond 

  to play devils advocate that's all well and good for you.. but what about the poor out of state investor who was never told of these issues .. I don't see any banners on the TK companies websites pointing out these potential pit falls. and you buy a home and its your home that is screwed up and your only out is to sell to someone like you who is going to hammer on the fact that its a failed foundation and its going to cost thousand to fix ... sorry you paid 100k for it 2 years ago but I can offer you 50k today because of your foundation issue.. Its one thing to bang on the banks but remember for every deal you hammering on price some poor investor just lost there behind... That would be my devils advocate reply to you :) 

@Hattie Dizmond 

  Mississippi has Yazoo clay and foundation issues are real and can be very expensive.. often 10 to 20k.. plus you have cracked walls doors don't work pipes get busted because the house settled.. I can see owner occ's who watch the foundations and water them doing fine.. But rentals your really rolling the dice... As Jon said though one just needs to be aware and a big part of your due diligence would be talking with a foundation repair company they will know the good areas and the bad areas.  In MS its seems like its the entire state though.

Bottom line thought for a cash flow out of state investor if you get a foundation problem you just wiped out 5 years or more of your positive cash flow... Big bummer

With the new construction I bought there I have not had an issue as the dig outs were deep and new rock brought in... ITs the older homes were as Jon Pointed out were they are just slab on grade that you can see houses that are cracked like humpty dumpty and are off kilter 2 to 6 inchs from one side to the next. And yes those in the business target those homes once a retro fit has been done your good for a period of time. but it needs to be a full flown retro fit not just jacking a corner up to make the house presentable to sell to the next person.