All Forum Posts by: John Vo

@Robert Renne Typically the banks would require the purchase agreement when they do their underwriting anyways, but it is a little bit odd that the appraiser would want this information.

The bank probably wanted a statement from the appraiser in their report somewhere stating something obvious such as "Appraisal price is $200,000. Purchase price is $190,000." 

Banks are a bureaucracy, the paperwork is never ending. So either way, you have to send them the purchase agreement if you want the bank to lend to you. 

@Joan Soto All of the above are great advice! If I may add my 2 cents from an investor perspective who looks at wholesale deals regularly.

1) I absolutely hate the "non-refundable deposit" rule from wholesalers. There's just so many possible hidden surprise in a real estate transaction, so  for you to have this rule, you must be darn sure that this property will close with absolutely no hidden surprise from your side such as clean title. As a buyer who enter into contract with you, I have no recourse to get my money back if something should go wrong on your side and we can't close.

2) Your comps will be double and triple check by me as well as a real estate agent/broker with access to MLS before I make an offer. Reputable wholesalers will err on the conservative comp number. This is one of the quickest ways for emails from wholesalers who tend to be liberal with their comps to go to my junk email folder or I just unsubscribe from their mailing list.

3) If you're trying to assign the contract and do not have ownership rights to the property. I will want to look at the contract you're assigning to make sure I know what I'm buying because you're selling a contract not a property. If you have taken the property in your name or you will be doing a double closing then you are selling the property so I don't need to look at the contract you have with seller. I don't care how much money you make off the property as long as the numbers work for me. 

4) Hard-money or cash only rule. It cost me more money to obtain hard-money/private money financing versus conventional financing, so know that I will deduct this financing cost from my offer. 

It's my 2 cents, but due to the above reasons I've yet to buy anything from a wholesaler I've met because once I run my numbers, I might as well just buy a property using conventional lending and put 20% down. I have better COC return and more protection as a buyer from the law. Good wholesalers are hard to find cause they already have buyers knocking on their door begging for their deals.

I don't have any experience with the Dallas market, but I'm asking the same question with the Houston market. The numbers just doesn't make sense to me, which reminds me of the 2008 bubble where people are rushing in and buying when the numbers doesn't make sense. I'm currently in a holding pattern on buying properties in Houston, and just trying to see where the market goes. Good luck to you.

Michael Clevenger I don't believe you ever mention if the appraisal was an FHA appraisal or not. If it's an FHA appraisal then you're stuck with that for 6 months. If it's not an FHA appraisal, then I would pay to get a second appraisal to see what it amount to. If the value is higher then the first appraisal I would add the 2nd appraisal report to your MLS listing and changed the listing to not accepting FHA. In my experience dealing with FHA appraisal, the appraisers tend to over their butt a lot more by going with a more conservative number. In addition, I would update the listing to mention that you're open to owner finance at a very reasonable terms such as 6-7% interest rate with 20% down payment, no credit no problem and hope that would spurn more interest.

@Hersh M. Thanks for the article!

@Sharon Tzib I don't think Texas is going to be seeing the kind of price increase like California anytime in the near or distant future, but I would fervently hope that would be the case once I've bought all of my investment properties. 

All kidding aside, a 1980s property sold at $140K is a 30-40% increase in price if you're comparing purchase price when you bought the same property in 2012-2013. As a value investor, that's a cause for concern that I'm running the risk of buying in a bubble because of such a high increase in value over a short time frame.

I'm curious to know where you get the that oil & gas accounts for 30% of Houston economy. I followed the link you provided and it doesn't say that number. 

And no, i don't think you sound self-serving at all. As a licensed agent myself, I'd like to think that I know my sub-markets that I invest in, but it's always refreshing to get other agents opinion of the market in general. I agree there's opportunities in the coming months due to the increase in supplies, but I'm not so bullish as you are though. 

@Keith Goodwine That's some sound advice. Thank you.

Read the report. Overall gist I received was that the Texas economy is slowing down, but there's pockets of resistance to the downturn such as San Antonio and Austin. The numbers doesn't lie, less jobs creation= slow economy. The numbers of building permit for Houston and Dallas is a surprise, but too generalize for me. Doesn't say if permits are for new built, repairs to existing structure, commercial building or residential, etc...so I take that number with a grain of salt. Overall, I would take the report as another caution signs to make more conservative assumptions when you invest in Texas and especially the Houston regions.

I hope to get everyone's opinions of how the Houston market is doing and share what their strategy is for the coming months as well as 2017 for investment properties in Houston. I'll start off the discussion. I've been lucky enough to have bought two properties during "real estate crashes" and have cashed out on one, while holding the other. I'm looking expand my holding and currently looking at properties that cost $150,000 or less in the Katy, Cypress, Sugarland, and Richmond area for rental. I've been analyzing foreclosure properties from the MLS, HUD homes, off market properties as well as deals from wholesalers and I've got to say the margins are slim across the board, as far as the deals that I've come across. There's properties that were build in the 1980s or earlier that's trying to be sold off for $140K or more with minimal or no rehab been done to it. That's ridiculous! But that is the current market in Houston at least on the lower end of the price spectrum. I've read a lot of the news article regarding oil prices and come to the conclusion that no one knows what the oil price is going to do. There's just too many variables in the market. I would probably get a better answer consulting a psychic than listen to some of these oil and gas CEOs and their predictions. But surprisingly, properties values below the $200,000 have been steady. To me this doesn't make a lot of sense, where a large portion of the Houston economy is oil dependent and where oil and gas companies have been shedding jobs left and right, but prices for rental and SFH resales have increase in some case and/or remain steady. Yes, I know there's argument that Houston is economically diverse in not only oil & gas, but medical, etc... But the fact remains is that a large portion, my guess is 60% and that's a total conjecture, of the Houston economy is still oil and gas related. So the question remains, should I/we/investors interested in Houston wait until the market "crash" to jump in or buy a property where the best deal you can hope for is $0.90-$0.95 on the dollar with minimal to no rehab and hope for the best?

Thomas Haregot I would suggest you do further research on the Houston housing market and each of the sub-market you're interested in carefully before you buy. Case in point, did you know that Houston overall is approaching 4 months of inventory for the month of July? More sub-markets in July have passed the passed the 4 months of inventory mark than June. The 4 months of inventory point is important because it indicates that the market is turning from a seller market into more of a balance market. Check market updates on HAR.com. If you're looking to buy in the current market and your strategy is waiting for the property to appreciate 10-15 years down the road, I would advise against that strategy since you're coming in at the top of the market, especially depending on what part of downtown you're looking at. Don't be sway by people who are saying to buy now cause price will go up later. They're probably trying to unload their non-performing property on you. Houston is going on its 2nd year of the oil downturn as you know and contrary to what some of these "expert" are saying, Houston is no where near as "diversify" from oil dependence related jobs as they think. Adding to that, oil companies are still laying off their workers quarterly and the benefits for ex-employees who were laid off are coming to an end soon or have already ended. Those trying to keep afloat are finding it tough to get back into the job market because there's simply a lack of high paying job postings at the moment. Which means things will be interesting in the months to come. Do your market research, get your finances and strategies in order and make very conservative assumptions if you see any opportunities currently offered to you. Hope I didn't bored you.

John Nisewonger there's a couple of options for you as far as Other People Money goes that can finance your deal. There's hard money lenders, private money lenders, 401K or IRA, partnership with another investor, etc... Hard money and private money lenders will finance the deal based on the property appraisal.

@Thomas Kwan Why not talk with the people first? Find out what their situation is and see if you can help them. Maybe they just needed a polite request to move on to a different location. Offer a one way bus ticket and food money to a destination of their choice. If worst come to worst and you can't find a common ground, then by all means use the law to make them leave. As the saying goes, "You catch more flies with honey than you do with vinegar".