All Forum Posts by: Matt Shields

 I understand, trustee auctions are one of the riskiest real estate investments, and you can only line up so many ducks, but lending is the least of my worries. Unless you pay for title insurance for everything before you bid, and many times I have bid dozens of times before a win, there is no title insurance. So if an undiscovered lien is found after the sale you could be in a bad place. There is no inspection period, and the interior of most homes is not accessible, so you usually have no idea what the interior condition is. The only Get out of Jail Free Card is to forfeit your $10,000 deposit if discover something during the 24 hours that you have to pay for the auction. People ask me about trustee auctions all of the time, and I caution them it is not for everyone, actually, it is only for a few who have a high tolerance for risk. Eventually, you will get bitten and lose a lot of money on an auction. It will happen, just know that going in.

Starting out I just asked for referrals and called hard money advertisements. I initially paid high rates because I had no experience, but once I had a track record lenders came to me. My numbers are simple. I take the ARV and deduct all of my known expenses and assume a worst case scenario where I have to replace everything, then my top bid is breakeven. I do this because you cannot see the interior of most auction homes, but few are totally destroyed.

Hello Divya,

If you PM me your email and criteria, I'll send anything available.

 Hard money lenders all have different requirements. My lender requires that I have proof of insurance with the lender on the policy. I usually just have my insurance guy email it to the lender. Title insurance is for me. You can't (practically) get title insurance for trustee sales, but I get the property information over to my title company asap after winning an auction, order title insurance, and get a prelim before paying for the auction. While I research the property the best I can before the auction, if something was missed that the prelim catches I want to be able to bail out before paying. Losing a $10,000 deposit is better than losing everything. Fortunately, I haven't had to do this.

I have my hard money lender(s) lined up before the auction. After a successful bid, I call him with the details and he emails me the loan docs. The next day I have the docs notarized and arrange title/property insurance, then we meet and exchange loan docs/insurance/checks and pay for the auction. In Arizona, we have to pay for an auction (trustee) the next business day. A hard money lender who works with auctions should be able to get you funded very quickly if you have set things up with them beforehand. 

Why is it underfunded? If the HOA is not financially managed correctly, what else is mismanaged? I think my biggest concern would be a major expense occurring with no way to pay for it and requiring a special assessment. Read the HOA CC&R's.

As always, don't trust the internet, seek professional advice. Good luck!

Emotional support animals are a scam and tenants have figured out that they can get around pet policies by claiming any pet is a support animal. Be careful, the ADA only recognizes dogs for service animals, but residential rentals fall under Fair Housing that accepts any animal(s) as ESA's, and violations of the Fair Housing Act are very expensive. 

The tenant must provide a letter/certificate from a doctor and you then must accept the animal as an ESA. There are websites selling ESA "certificates" and vests that are not prescribed by a doctor and legally not acceptable, BUT there are now websites with doctors selling ESA "certificates" and they are probably legally legitimate. 

As always, don't trust the internet, seek professional advice. 

https://www.hud.gov/sites/documents/SERVANIMALS_NTCFHEO2013-01.PDF

Being that you are represented, I have to be careful not to step on anybody's toes. I will say that in my market a 2/1 is considered functionally obsolete and can be difficult to sell. Lack of traffic usually comes down to price, almost any problem with a home can be overcome by price. I also noticed that Zillow has their Zestimate $10,000 less than your asking price. I know Zillow values accuracy sucks, but it is the most popular real estate website and many people believe these numbers. 

If your agent believes that the price is too high then I would consider his advice. As a listing agent, he has the incentive to sell at the highest price. Often, sellers end up with less money by listing too high, then later lowering the price to where the house should have been listed at. Unfortunately, then the property is market warn and buyers ask "Why has it been on the market so long? What's wrong with it?", then the seller must lower the price below market to get it sold. Good luck!

Doing flips and rentals I've done a lot of paint matching. Here is what I have found. 

If your paint has been on the wall for a while the match often won't be perfect even if you have an original sample. Over time, the paint on a wall changes color due to fading, dust, and contaminants in the air. Paint also changes unevenly throughout a house, so if you are doing multiple touch-ups, a perfect match on one wall may not match another.

Even if you match the color perfectly matching the sheen is nearly impossible. Like color, the sheen also changes over time. Computers can match a color but they cannot match sheens. The best you can do is eye it, and this is when you want an experienced paint shop like Sherwin Williams or Dunn Edwards. I find SW to be the best at matching, but it really depends on the skill of the employee. Matching requires experience and a keen eye. When you find someone that's good, get their name. To get the best match I use a hole saw to take a two-inch wall sample to the store, then patch it back in. 

Trying to match color and sheen can be maddening, and sometimes I find it easier just to paint a wall corner to corner where a slight difference won't be noticed instead of just a spot touch up. 

Hello Pablo, You can check my resume in my profile. If you would like for me to set up an ARMLS search for you, just send me your email and property criteria.