All Forum Posts by: Mark Gruetzmacher

Ok being that the Note business is totally new and confusing to me I can see how I worded things wrong.  I know a person and she goes to the sale at the court house steps and buys the houses at the sheriff sale which I guess she is not buying the actual house but maybe the lien or note?  She then has to wait the specified days for the redemption period and if the owner does not redeem then she gets the house for the price she paid.  I guess I was thinking that she only bought the lien/note at the sale because she does not own the house until after the redemption period and only if they don't redeem.  Sorry if I am confusing everyone or not making sense.  It is new territory for me.

@Edward B. Ok, the ones here I am referring to are notes that are in foreclosure.  They have a redemption period of normally 180 days unless the property is vacant and then you can pay to expedite it to 60 days via an attorney and the courts.  

So would that be essentially the same as a NPN? With the difference being that it is already in foreclosure vs the standard NPN. My thought would be to buy the foreclosure note, redeem it and then fix and flip or fix and rent.

Hey everyone,

I have been in the real estate game for awhile but mainly only do rentals.  As time goes by the idea of notes seems like a nice niche to look into.  The whole idea of getting started in notes is a bit confusing though.  Anyway I was wondering if buying a foreclosure at the court house steps was the same as buying a note.  From what I read , your are buying a note from the bank but it is also in foreclosure and you have to wait for the redemption period then the note turns into a deed to the property.  Is that correct?  I assume though that the whole idea of note buying it the cash flow so most note investors buy notes with the hopes of never foreclosing.  Thoughts?

Welcome Dan.  I know what you mean.  When I found BP I listened non stop.  I still listen today and never miss a podcast.  

I would call around more.  Prices varies widely.  Usually the tanks are good for a long time.  Sometimes the drain fields can go bad from various things.  A few years back a place I sold had some issues and they ended up putting in a new drain field for maybe$2K.  At the time a brand new septic system with a 1500 tank and drain field was going for $4500-8000 depending who you had do it.  

Guess it depends on what your seeing.  But the market here stinks.  Everything is expensive for what you get.  Most of the cheaper duplexes are in rougher areas if they are cheaper.  Once in awhile you will see a semi newer one with in the last 30 yrs but they are usually really expensive.  Some of it I guess depends on how your financing goes also.  Most places want 20% down and only do 20yr Amortization.  So your payments are higher.  I guess it depends on how much a month you want to make.  Prices here have skyrocketed in the last 3 years a lot.

For an example a few years back I looked at a duplex that was maybe 90K. I thought wow, that's a low price. Ok so you do 20% down at 5% gives you a $475 P&I, $68 for insurance, $150 for taxes gives you $693. Add in 10% property manager, 5% for CAP Ex, there is another $100. Then you have vacancy and the cost of the PM to rerent the unit. So in that example it was bringing in $1000 a month for both sides. With out figuring in any extras you were at just $200 profit for an old run down place. I think rents are more now but in those cheaper older areas the rents are low. The tenants you get are not very good either. I think tenant turn over is higher because of the type of tenants you get also. I have never dealt with PM as I do it myself but I have heard complaints about a lot of them. A&A is one I would not give a chance just because I called them 3 times and emailed in regards to one of their clients selling some homes and NEVER got a call back. I do know 3 places off the top of my head that are smaller PM and I would check into.

Rents in this area are all over the board also.  If you want to private message me some streets or address I would let me know what I thought about the area.

Hello Kayla, I live in that market.  Where are you looking at properties?  What price ranges? Truthfully I think the market here sucks.  Are you looking at duplexes or bigger units or ?  

I agree with what every else has said as well.  Just do you research and get started and keep moving forward.  Mobile homes can be a good start for sure.  It also depends on if you are planning on buying them in a park or on land.  Since your getting stated I am guessing you are thinking about homes in parks since the cost would be cheaper.  Mobile homes can be rewarding and also a lot of work depending on what you get yourself into.  Usually you get a little lower class tenant a lot of time which can be a challenge.  If you know how to fix things then that would be a plus as well.  You would have to check on the age part like mentioned before.  I think the main area of concern with mobile homes in parks is finding a park that will allow you to rent them out if that is what your planning.  That can be a very tough to find such parks.  If you are buying and fixing them up to be resold then there might not be too much of an issue.  In any case do your research and start investing.  Good luck.

@Account Closed Thanks for the reply. Those expenses above were from the 2016 year. There is no management in there as she self manages. All utilities are billed to the tenant except for garbage which the park provides. There is no utilities that the park has to pay for that I know of. The road is gravel but it is just a big parking area with homes around it. She is asking $450K which I think is way too high which equates to a CAP in the 8's with the expenses listed. I talked to a local lender and he said things are usually around the 10 CAP for the last few years. I think the expenses should be higher and also take into account a few more things which isn't on the list.

@JC K. Sounds good.