All Forum Posts by: Karin Crompton

 @Kevin Scanlon - it sounds like this wasn't a true foreclosure. What info did you get/were given ahead of time?

When you purchase a foreclosure in CT, the bank will have already gone through the court process to sue and take possession of the property. So you are buying the foreclosed property from the bank, which is the owner of said property. There are no steps remaining - no period of redemption, appeal, etc. That has already happened through the courts (hence, "judicial state.").

I do see properties where the bank auctions off an occupied foreclosure and the new owner is in charge of eviction, but it is my understanding that there is no issue with title being passed, merely with getting rid of someone who won't leave.

I'd be interested to hear others' thoughts on this (I'm not a lawyer! So maybe I've missed some little-known loophole or factoid.), as well as more info pertaining to your situation. Does your contract have a time is of the essence clause that might allow you to get out of it if this drags on too long?

Hi @Trevor Lohman - do you know a good financial planner you could bounce this off of? Or perhaps a CPA? Someone who could really break apart the numbers, tax implications, all of that stuff.

I'm not qualified to speak to the best route on this, both in my lack of experience in that arena and in not knowing all of your specifics. However, here in CT, I have an investor friend who runs his own company, owns a ton of multis and is in the midst of a large project to convert a former convalescent home into an apartment building. He is a former vice president of a bank and is very well-regarded and quite successful ... and he rents an apartment in a very affordable town. I don't know all of the details about why he is renting vs owning, but from what I can tell, it's not slowing down his business growth. He has been casually looking for a place to buy, but meanwhile, he's building an empire!

I guess the point is, you can make it work no matter what your circumstance. Of course, always do your due diligence and run through all possible scenarios. And then when you make your decision, go for it!

@Jay Mitiguy the field card is essentially an info sheet on the property, typically found in the assessor's office. It tells you details like square footage, acreage, the year the house was built, the assessed value of the property and whether any other structures/'improvements' are there (which can be interesting - for example, on the field card for a single-family we are currently rehabbing, the field card lists an inground pool ... and there is no pool. So I need to have that corrected.). It will also usually provide sales history, along with volume and page number. It also usually includes a sketch of the house, along with dimensions.

@Jay Mitiguy - yes, as far as title is concerned, you don't worry about that until later. Do your due diligence on numbers and preliminary walk-throughs of the property, and go ahead and negotiate your purchase price. After you give the executed contract (i.e., signed by buyer and seller) to your attorney or title company - I don't know which way it's handled in VT - then they'll get to work on the title search.

You could of course also do a little homework at the town hall yourself: check that there are no back taxes owed, what kind of permits may have been pulled (if any), scope out the field card, the assessor's map of the property, check well and septic records if applicable, that kind of thing. You can also check whether there are any outstanding liens, though that kind of info will officially be handled by title company/closing attorney.

@Jay Mitiguy one brief point - don't worry about doing the title search before you put it under contract. Your contract should specify that the property will be passed to you with clear title, and then the title search would be a part of the process leading up to closing. That's not considered a weasel clause by any means, just a completely normal part of a transaction.

Hi @Luis Saez - I think the first thing you should really analyze is WHY you like the idea of wholesaling vs buy and hold. These are two completely different animals, so what appealed to you about switching gears? Knowing the why is crucial.

There are a bunch of podcasts that deal w/wholesaling, so listen to those as well. Then read, read, read. BP also features a ton of blogs on the subject, not to mention any number of forum Q&As.

As for profit, it varies. A rehabber may take on a quick project w/a smaller profit if it can be turned around fast. I'd agree with @Craig Hunt that 20k is a good baseline. Anything less and a rehabber starts to cut it close b/c of the risk involved (i.e. if something goes wrong, your whole budget is up in smoke), holding costs, etc etc. Again, though, it's not quite as simple as finding a target number. The complexity of the rehab and the flipper's search criteria all factor into it.

Hey, @Winston Spence - we can do that. I'll send you a message.

@Winston Spence - yes, it is. We've had some inquiries/interest but no formal commitment.

@Jeff Lee you eliminate personal bias by finding a good agent who will be totally honest w/you about the ARV. There are lots of blogs and forum posts on how to find that kind of agent, so do a little searching here and read some thoughts from people a lot smarter than me. You can find some info on Zillow and Trulia, but be careful to study the solds and not just active listings. Active listings are nice as far as knowing what your competition is, but otherwise, I tend to think of them as wish lists. ;-)

On the 70% rule, I like to keep it really simple to start. You can get really detailed - and we do as we really pick apart any property we're seriously interested in - but as a quick blush analysis, here's how we look at the 70% rule: the ARV times 70%, minus repairs = your maximum offer.

That 30% that you lop off at the start includes holding/closing costs and profit. Our goal is 20% profit, 10% holding/closing, but oftentimes it will end up 15%/15%. In other words, if you sell your property for $115,000, on paper your profit would be $23,000 and your holding/closing costs would be $11,500. But again, this is a quick-and-dirty rule of thumb. You would generally break it down in greater detail as you analyze, figuring out what it costs you to borrow money (if you're using a lender), utilities, taxes, insurance, detailed closing costs on the buying and selling side,  etc etc.

Hi @Ryan Z. , @J Scott discussed this very topic recently at a meetup in NYC. He knows exactly how much prices in his areas dipped in the winter months and talked a bit about his strategy for dealing with this issue. I believe it had to do with factoring in the cost of holding on to the property until a better time to list it, or else discounting the price if listing during a down time of year. Here in CT, as in Ohio, the "hold" scenario kinda stinks when you're faced with freezing temps. Anyway, hopefully J can chime in here with what will be a much more coherent and useful reply!