All Forum Posts by: Kim Heretick

I buy to flip and would love a good deal from a wholesaler. 

When I am setting my purchase price limit, I take 

ARV - Est Reno - $5k contingency (or more depending) - (11%*ARV for total selling costs) - 15% my profit/pay = My Purchase Price

EXAMPLE: $110k ARV - $20k RENO- $5k CONTIGENCY - $12.1k SELLING COST - $16.5k MY PROFIT = $56,100 PURCHASE PRICE

Purchase price on a distressed home usually works out to about 50%.  This all depends on the property. Some don't need extensive reno, but most do. 

I do a lot of the work on the homes myself, so my labor is paid with the 15% too (reduces the renovation cost a bit).  It is hard for a wholesaler to have a good deal for me because the margin is so thin and I won't risk my money and time to break even.  I do think buy & holders can pay more because they're not having to cover 11% in selling costs any time soon.  

I've found most wholesalers overestimate ARV and underestimate RENO. I would love someone that could find deals and take a 2% cut from purchase price, but wholesaling with no skin in the game and expecting to take 10%, or more, of ARV isn't realistic. That's a once in a lifetime deal IMO. That's why most investors in my area work to find their own deals. I would love to pay for a good one though!

What state and counties are you looking at?  I'd like to do some research and try to find some things for you.  Don't worry, I only shop in my local Toledo, OH area.

I recently switched to Lowes' Diamond NOW Arcadia off-the-shelf Shaker style cabinets.  They look great outside and good inside too.  Now, they won't have the features you'll want in a high-end home, but for everything else they're great.  I just visited a family members $1m newly built custom home on the water.  Even custom cabinet boxes are made cheaply anymore.

You can easily add soft close door dampers for $2 each cabinet to upgrade (search Amazon for these).  I added inexpensive MDF for molding, kicks, & the fridge enclosure and painted it to match to give them some upscale va-voom (and save $).  I'm very pleased with them and haven't found a better replacement.  I love that most sizes are readily available locally in case I need to exchange and all come pre-assembled (for the same price as flat packed, or less).

My only wish is to find unfinished cabinets I could paint in the same style and price point as Lowes' Diamond NOW Arcadia cabinets!  These can't be painted easily.

I just drove by 5 Auction.com properties yesterday, all of which said they were occupied.  2/5 were, the rest were vacated.  If you can, have someone do a drive by and look in a window if no one looks home.

Also, look up the County's residential eviction process.  It usually doesn't cost much to file and the Sheriff will boot them 30 days after you do (you have to move their belongings out to the curb on that day).  I'm in Ohio too.  It's not a bad process legally (DIY).

Hi Lynnette,

For the past year and a half, I have been going to my local auctions and reading up on title reports related to foreclosures.

1. It depends on what State and County your Sheriff sale is in to say how it works.  

In my County, all foreclosure auctions start bidding at 2/3rds the tax audited value.  The banks come to the auction, or submit their bids, to the sheriff usually in the amount of what is owed to them.  However, there really is no way to find out exactly how much that is unless the current owner tells you.  You'll know you've hit it when the bank stops bidding at the auction.  

Call your local Sheriff to ask how they set the Initial Bid Price.  They'll be able to tell you.

2. You can, and should, do a little research to guestimate what the loan/equity might be.  

Google "(Your County) Real Estate Auditor".   Most counties have an system to search for properties to see who currently owns it, taxes due, past sales transfers, building permits, etc..  

Look up your property and get the current Owner's name (or previous owner's name if it's now in the Bank's name).

3. Google "(Your County) Clerk of Courts dockets".  That should bring you to the website where you can search Case Dockets by the foreclosed owner's name.  

Search the owner's name to find their Foreclosure case.  Within the Foreclosure case online documents, open the "Preliminary Judicial Report".  This will show you a title report, and other details, usually much better than the Auction.com Title Report.  I find reading the "Final Judicial Report" document can also be helpful.  Judicial Reports give great information on their bank loan and any other recognized liens on the property.

4. Any debts/liens listed in the Foreclosure case's Judicial Reports are wiped clean from the title by Sheriff Sale (no matter if you or bank buys it) with one exception.  If they have an IRS Lien, the IRS has the right to buy back the property from the auction winner at the price the auction winner paid for it for 90-120 days.  However, unless the property went for $100k and is worth $1m, the IRS doesn't actually take advantage of this.  You just won't have a "clean" title from it until the period is over.  

If you find another Lien case for the foreclosed owner that is newer than the Preliminary Judicial Report's title search, that may be a lien that you inherit if you buy the property.  Only the liens listed in the Foreclosure case are wiped clean.

If you read the Foreclosure case's "Preliminary Judicial Report" you'll be much more educated about the home loan and can better guess what is owed to the primary lien holder.  Hope this helps!

I have checked out some of the online auctions with no luck at winning them at a good price.  I would suggest searching up your local Country Sheriff Sale (aka auction).  You can't go inside the homes before buying but you can look around the outside, talk to neighbors, and do some online investigating.  I've gotten great deals on homes that were foreclosed, had back taxes, or the person passed and did not have next of kin.

I agree with replacing seals and glass, wherever needed.  Paint the frames black and they will be beautiful.  It's quite the trend right now and very desirable.  

I am working on a 100+ year home now.  Some challenges we have faced are bringing electrical up to code (if you change so much as an outlet or light fixture, it's a requirement in my state) and house settling that makes all flooring except for carpet a challenge (contractors will want to put in all new sub-floor or they can't promise their work will not be without many issues).

Hopefully, your foundation is good.  Mine had had previous work done and was good.  Otherwise, we would have been way in the hole.  Good luck!

What about putting a double vanity in?  It looks like you have enough room unless there is a toilet blocking it.  If a toilet is blocking, I would provide as much storage space as possible.  Could another cabinet of drawers fit in there?  Could shelves be installed on the right for baskets & towels?  That would be better than the current open space for a (dated) vanity that is there now.