All Forum Posts by: Mike Neyman

It seems to be a problem with pricing and not necessarily quantity, although I know the two are related. There are still plenty of REOs on the market, but banks are not as aggressive with the pricing as they were even 6 months ago.

Hopefully that will change as they start dumping more inventory. The time of year probably also has something to do with it.

On that note, if someone has a good deal in the Cleveland area, let me know. Looking to buy 4-5 properties with cash in blue-collar suburbs.

Is it me or is it harder to find good REOs in the last couple months? I'm looking to buy a few properties to flip and have had a hard time lately. Seems like REOs became more expensive while the retail market stayed the same or even got worse. This obviously creates a problem if you're flipping.

Maybe I'm not looking hard enough. Anyone having the same experience?

John,

I invest in the Cleveland area and may be able to help you with some local funding sources, etc.

PM me and I'll tell you about local banks to consider.

Seller can agree to a lower purchase price or cancel the contract.

Has anyone run into a situation where the first appraisal came in at the selling price, but the second appraisal came in below?

How is this discrepancy reconciled? Do they average the two or would you have to drop the sales price to the lower one?

I agree with Mark. My market may not be "best" for flipping, but I don't see how I would be able to do it anywhere else seeing how much hands-on management it takes.

Does anyone flip properties that are not a reasonable distance from where they live?

I would also be interested to know what segment of the market people target for flips... low end, blue-collar, middle class, upper middle class, high end?

From my experience, the low end of the market offers better deals and you can do more of them (due to lower costs), but middle of the pack type houses are much easier to sell.

It exists, but be prepared for the following requirements:

- 75% max LTV
- good income
- good credit score
- some track record of real estate investing

I have portfolio loans on 4 properties with 2 different banks and all of them have been a struggle to close. Most banks still do not offer this product, but I think it's better than a year or two ago.

I flip properties and rent in this area so I know both sides of the market. The rental market is very strong, but the the sales side of it is not for a few reasons:

1. Most lenders will not want to touch loans for such small amounts.
2. People who would be willing to buy in low priced areas typically do not have a high enough credit score, even though their income is sufficient.
3. A house for 35k will typically have city violations which require funds to be put in escrow until those violations are fixed. This takes cash, which most buyers in this market segment do not have.
4. Some people are still afraid to buy despite favorable prices/interest.
5. Many current renters would want to buy, but cannot because they had recent foreclosures or bankruptcies.

In general people in this area can buy the house they currently rent and save $100 to $200 per month in payments, but the reasons listed above prevent them from doing so.

I would be comfortable renting in this area, but be careful with your flips. You have to make sure the numbers are good and include a contingency for longer hold times.

You may want to look into less expensive sub-metering options. There is a company in my area that can place sensors on water, steam, etc lines that can tell you how much each individual unit used. You can then invoice tenants based on usage. You may even be able to get the utility company to invoice them (not sure about that one). I think its called intellimeter.

I'm considering doing it for an apartment building to bring down expenses. May also lower rent to be more competitive. First thing potential tenants consider is rent and then ask about utilities.

I am licensed, so you're right about possible further restrictions. But the way I read the rule is that an unlicensed person may not receive a fee regardless of the license status of the person providing the fee.