All Forum Posts by: Jay Hinrichs

@Shankar Balakrishnan

In general if your going to try to buy court house steps.. YOur going to need to track virtually every sale in the county your interested in. As you just learned very few sales actually go 3P most postpone, revert, Bk, etc etc. Its a full time job to actually be successful at courthouse steps.

And in your mortgage states and from what I see in states that are attorney driven finding the information on FCL. is time consuming, compared to West coast. On the west coast if you have any kind of volume and or in the RE bizz you will have a relationship with a title co.. Be it FATCO, Fidelity etc. My go to is Chicago ( owned by Fidelity).. And our systems are all computerized. I can call my customer service agent give and address. and in 90 seconds she can give me a date down that is 95% accurate. And when I did this for a living in the PDX metro area we covered 4 counties and I had one employee that did nothing but track each and every foreclosure.

But it does not stop there. As @Steve Babiak mentioned many trustee's services that handle these sales don't post the opening bid until the day before or even right at the sale... So you don't know if its going to be a full credit bid a discount bid or a step bid. The most frustrating of all are step bids.. You call get the opening bid its 100k for a 300k house.. And when the first bidder bids. the Cryer on authorization from the lender steps the bid up to 200k or higher and everyone is severely disappointed, Has to do with mortgage insurance is what I have been told.

And if that is not all hard enough. you have the game that is played by the good ole boys at the court house steps. IE the regulars that have been doing this for years.. IN many instances they will out bid a newbie just to keep you frustrated and to run you off.. There is the offers of Lunch. Money and other means of Collusion to keep competitive bidding from happening. In some markets its so wide spread as to be a business all in its self Here in ORegon it was very common and regular practice 15 years ago. There were many that could must up a 100 to 200k cashiers check show up qualify funds but never ever had the intention of buying anything they were just looking for the 1 to 3k to not bid.. There was a group in either NC or SC that got stung for this about 5 to 6 years ago by the FBI... And they got I believe an 800k fine and some other serious stuff.

Fast forward to today and you have the new foreclosure steps Gorilla ( Hedge Funds ) and their bidding services.. When you see a 20 something with his backpack come up to a sale and qualify 1 to 2 mil in cashiers checks and just bid on everything coming up he is bidding for one of the big Hedges.. this happened in the Atlanta Market. The last court house steps property I personally bought was in clayton co. GA.. about 18 months ago.. after that time the Hedges just ran the numbers up to were it was not worth it in my model.

I have bought ct. house steps in FLA GA. MS. TN. CA. OR and WA. probably close to 500 of them over 30 years.

As one poster said as well. I like TAx deed states the best.. Although with Bid for Assets holding many of them these days the screaming deals are far and few between like we used to get.

Hope that gives you a little insight into the Ct. steps bizz at least from a West coast prospective. I am not up to speed on Judicails as well as Trustee sales.

@Rick Baggenstoss

here we go again... :)

Probably already discussed here. anyone invested in these Motel room deals. they are all over Great britian and Austrialia.. IE they tout extremely high returns, but the structure of the deal most of the GB and AU folks can't describe.. They think they are buying a Motel or hotel room that is a condo that can be sold individually.. Is there something specific to this market that allows that. I have not heard of that arrangement unless it was Crimeshare or partnership interest in the entire project etc etc.

curious to learn if someone has or is doing it.

@Lenny Longo

course of construction inspections fee's are very reasonable. WE don't pay anywhere near 1k per house though..

Although for new construction its much eaiser for the inspector he is there at post and beam and top out and rough elec. So they know those items are done and done to code.. then you have framing sheer wall siding roof etc. that's the next big inspection. then your clear to insulate sheet rock finish plumbing elec etc etc.4 inspections usually do it.. and we pay 75.00 per.

Now on rehab its a little tougher as each one is so unique. And you really have to watch most rehab contractors as they are not ( not sure how you say this) but they are not in the same league as the subs generally that have one trade do their job and go to the next one.

JLH

@Engelo Rumora

and as a follow up to the larger management companies that specialize in apartments. they may or may not partake in brokerage fee's which can be substantial if you selling 3 to 20 million dollar properties. But they will be the go to person for the investor in the DD stage.... The investors in this class will rely very heavily if not almost 100% on what the PM has to say about the property.

@Engelo Rumora

@Jimmy Klein

Quick answer to this is they don't make any money, unless they are very large IE 700 to 3k units and have a bunch of multi family. those that run 100 to 300 units of single family C class just make wages at best.. And most do it because they have to, they need to support their turn key operation without it the investors would be failing all over the place and they would have a difficult time selling new deals. Just about every top notch Turn Key company has PM in house and its a necessary evil Not a profit center, they make their money selling the house and making the 10 to 30k on the sale.. If they break even at PM that's all they are looking to do. Until of course you get to mass and scale then all the lease fee's, service call mark ups. late fee's and PM fee's start to add up. And if you manage 2 to 5k multi family doors it can be very good.

But they do it different.. The PM charges maybe 3 to 5% but the owners pay for the onsite manager and all other overhead. the PM basically makes his money doing the books and managing the onsite person to make sure they are in line with performance and collection of rent.

@Gary Parker

And same with the Home Security business. 90% of the door to door sales forces that cruise through America originate in Utah

@Account Closed

The bar has moved in HML since the great GFC.. In our market in PDX were builders basically all went broke in flaming fashion.. Most are back at it but most now have to use HML. As banks are precluded from ever lending to a person or entity that they took loses with. ( or at least most won't) so in our market there are many buidlers that were multi million dollar companies that are now in the HML pool.. We could never have loaned them money pre 09 they would have laughed at 2 point and 12% much less 4 and 14.

@Jason Topolski in most lending scenerios your name would appear on the trust deed or mortgage as the beneficiary. The broker placing the loan makes the points and may charge a % for collecting payments and forwarding to you.

This is called servicing the loan.

A good reputable HML with years of experience ( and there are many in each and every good size city in the US) will be glad to broker funds for you.

ASk a good closing attorney or title company for referrals to those that have a track record.

@Lenny Longo

I use construction monitoring services when I do new construction loans. however I do not usually use them on light to medium rehab deals. My bank here in Oregon that gives me vertical for my new construction uses said services once a month before we submit for our draws.

@Gary Parker

Start with Premier marketing and move out from there.

the reason is the work force that works the boiler rooms are full of young mentors that are fresh off of their missions and are used to rejection and are really great at the up sell. they get blasted on the phone and they move to the next one.. these are your mentors that are with you for the year.. their cubes are full of notes pinned up with their information that they will impart on the Students.