All Forum Posts by: Michael P.

Nice website Thanks...

If you are tracking down MLS Listed foreclosures owned by local banks this might come in handy guys. You can research the health of the local bank before you make an offer. You might seriously be able to get that house listed at 1 Million for 500-700k.

To the original poster: As a wholesaler you will want to get a bid on that property. You will basically need to find a company who is sorta on your team. They will gladly do these foundation estimates for you on each house. The payback is that whoever buys the house from you will hopefully end up using them for the work.

I am young and don't have the benefit of life to tell me if we are in a recession. However I will say everything I look at tells me things are about to get worse.

I think the market is going to go way lower. How does it currently make sense at 10k? 8k? I predict even lower. I am only basing this on nothing more than a hunch.

I think the housing market is going to get worse. I am so thankful I don't own any property other than my personal house. I am in the process of selling that as well and hope it does indeed close. I am so happy I will be 100% cash.

I study MLS on almost a daily basis. I am seeing the lowest amount of foreclosures on the market in my 4 year period of studying the mls(And not by just a few %. I am talking about 50% lower than normal standards). Does that make sense to you? It doesn't to me. The research I have done tells me that the banks are holding onto their foreclosures and releasing them slowly onto the market. They are also waiting longer to foreclose so they can claim the house as assets. The banks if they wanted to could completely annihilate the housing market. As stupid as the banks have been lately I don't think they are that stupid as to release all their inventory in one fell swoop.

Unemployment is insanely high. Almost every single one of my friends seems broke right now. Most have been laid off or are underemployed. I think the new % was 17% of people are underemployed right now with a 10% unemployment. That is bad and doesn't seem to be improving. I look around and I don't see anyone happy. Things just seem really tuff for everyone these days.

So yeah I think worse times are ahead.

On a side note: Does anyone know how I can short the market? I would prefer the use of options or something risky so if I am correct in my prediction I will turn a little into a lot. 3-5k investment.

Educate yourself. When I got into investing I am pretty sure I read 1000 hours worth of material on the internet before I bought my first house.

Before you invest make sure you have an interest in it. I knew for a fact I had an interest in rehab flipping. I knew for a fact I had no interest in being a land lord. Which path do you think I took?

Once you figure out exactly what you wanna do educate yourself some more in depth on that topic. This will help you down the road.

Maybe you know someone a little older than you who has an interest in investing as well. You would be surprised to find out how many people want to invest but just don't know how. So they go through their whole life and never get started. Find someone like that who is probably older than you but maybe has more money than you. If they trust you they might partner on a deal with you. Especially if you show them you are motivated and back that motivation up with knowledge.

Keep living frugal and saving money. Having a bank roll is so helpful. I moved back in to my parents house for like 4 months when I got started. It sucked. I sold a very rare car to raise cash when I got started. It sucked but I considered it a good option.

Just like now I am trying to get into apartment complexes. Guess what I am doing? I am selling my personal house so I can free up capitol. I don't want to do this but it just seems like the smart move right now.

Have this mindset: If you want to get into investing as much as you want to breathe air I would say you will succeed.

Goodluck

Don't mean to hijack this thread but I think it is relevant.

Would anyone buy a note on a Doublewide on land? Or is there just not a market for something like that.

I have never used a ratio to evaluate a deal. I have never even considered it. I use what I would consider a Line item to evaluate the deal.

I just run every single number into the equation and then I add in overages in rehab expenses, add in additional holding expenses if the property doesn't sell in a reasonable time frame, and I add in a worst case ARV fudge factor. Once I have all of those put together it is very easy to see if the deal makes sense.

Once I have all this data I can pretty much see a worst case scenario and a best case scenario. These never end up being true but they can be close.

I think we all have our own levels of risk we are willing to take and I think we all have our set amounts on how much we must make from a deal in order for it to be worth our time.

Anyways that is how I do it and so far I have been fortunate enough to profit on every single deal I have ever done.

Please seek expert advice. Only take my advice for what it is...just some guy rambling on the internet.

Alright I have purchased many houses that have needed foundation repair. My own personal house needed it. The very first house I purchased needed it. So with that said it doesn't scare me one bit.

The first house I bought I had no idea about remodeling. I knew the house needed foundation work but I had no idea what that meant. So I got something like 7 bids. I finally settled on a company. Let me tell you I got bids ranging from 9 piers to 35 piers. What did this tell me? It told me that either everyone in that industry was morons or someone was trying to screw me. It turned out not only someone was trying to screw me every single person but the 9 pier bid was trying to screw me. I didn't know anything and I ended up accepting an 18 pier bid(The engineer later lowered this down to 12 piers...SEE WHAT I MEAN?). I thought maybe the 9 pier guy was wrong. I later found out he was the only honest guy. The second house I did I had a couple people come bid on it. The guy who did the first deal and the guy who bid 9 piers on the second house. I ended up using the guy who bid 9 piers on the second house and have used him ever since. It was from him that I learned that most guys bidding the job gets commissions based on how many piers the house needed. Do you think a guy who makes $100 commission per pier might add in a few extra piers? I would say hell yes.

From looking at the pictures you showed that looks very minor to me. I have gotten very good at estimating foundation repairs. Before I have my guy out I usually make my guess and I have been dead on to his estimates most times. Of course that is just me looking at that one picture. That is why I say get a good company to evaluate the situation.

Another thing you can do is get a state certified engineer to evaluate it. They will charge you like $300 but you know he doesn't have any secret agenda to profit from you. He will most likely speak the truth on what you need.

So you are looking to wholesale?

First off with an REO property they do not allow wholesales. So you need to figure out a different way to state the buyer. Meaning you might use an LLC. 123 Main Street, LLC. That would be the buyer. Then if your offer is accepted you will form that LLC and sell the actual LLC to the end buyer.

Another method is to use a land trust.

Another method is to do a double close. Most title companies will have no idea what you are talking about. This one is much harder.

The last method is to purchase the house yourself in your name or your company name and then sell it at a later date to your end buyer. I have done this method 3 times. It does cost you more in fees though then those other 3.

As far as the ratio of accepted/offered. I don't know what my ratio is. I know I study the deals very closely before I waste my time making an offer. For example lets say a house just came on the market at 150k. This house has a ARV of 180k. It needs 20k in repairs and I feel if I can get it for 120k it would allow my numbers to work. I wouldn't even waste my time offering on this house. It is just too fresh on the market and the bank would never go for it.

Lets change the numbers around though. 180k ARV. Listing started at 175k and over the next 6 months has been lowered down to 150k. Now I think you have a slim chance of getting this for 120k and I would in fact consider making an offer. The bank has tested the waters for 6 months at this point. They are starting to think 120k might be a fair price.

Looking back I bet my ratio is very very high on what I have gotten accepted. I would think it is possibly as high as 30-40%. Like I said though I don't make stupid offers that are a waste of everyone's time.

Another thing to consider is look around at who the listing agents are for the REO's. If you study for a while you will start to notice only a handful of agents handle all the REO's in your area. One of the best things you can do in real estate is form relationships with these people. The way you form relationships with these people is buy houses. Once they see that you are a serious buyer, you close when you say you are going to close, you don't default on your commitment I promise more of your offers will get accepted. Piss these people off with annoyingly lowball offers all day long and I doubt you will go far.

If I was to write another post it would look pretty much Identical to what Jon Holdman just wrote. Very nice post sir.

I took a look at the website you posted Carolyn and quickly left. There is no doubt that company/guy is preying on investors to come buy his houses. Another thing that Jon pointed out is if you buy a duplex understand when you sell you will more than likely be selling to an investor. Rarely does a homeowner buy it and in fact when a homeowner does buy one to live in one side they do become investors. IMO you will never see the appreciation with duplexes that you see in SFH's.

While I am not familiar with Mansfield I am very familiar with the area just north of Downtown Dallas upwards to Frisco and on either side of those boundaries. I can tell you deals are out there for landlords. Deals much better than that duplex you are looking at. I say if you are going to be a landlord pick up some equity.

If the 8k tax credit ends you are going to be in a perfect position to capitalize on a house(With or without the tax credit ending I still think there are good deals out there. I just think they are going to get better in the mid/lower end of the market if it ends). With your down payment size you should be able to pick up two houses in the price range you are looking at. I would way rather own two SFH's than one Duplex. For you being out of state what difference does it make if they are super close together. The houses might be 5 miles apart but I don't see that cutting into your profits at all.

Continued from post above:

Now that you have your financing in place start looking for deals. With your 250k you are going to be able to borrow a lot of money most likely. This is assuming you have good credit of course. I see no reason why you couldn't do upwards of 1 Million dollars in combined deals.

On a side note I would highly suggest keeping a reserve. Maybe 50k or so. Hey you never know when some repairs or high vacancies are going to pop up. Better safe than sorry.

You don't have to settle on one area of investing. Maybe you do a fix and flip with some of your money. Maybe you buy one rental a month. Maybe you find a small apartment complex(Funding is way harder on commercial). Just study up on different avenues. There are many ways to make money in real estate.

From what you mentioned in your first post though it sounds like you want to be a landlord. I would start here and do most of your research in this area. From there if you branch off and see other areas to invest start researching those. I will say you are probably going to have much more success in something that interests you.

Goodluck