All Forum Posts by: Account Closed

Anthea, you can search the county records or check the recorder's office. You can also check this website - http://netronline.com

John, you need to send the letter multiple times to the same list because you need to follow up your prospects. I've read that 60-70% of prospects respond after the 6th or the 7th contact. If you're not mailing to the same list 7 times, you're taking a 70% pay-cut (no wonder you're gotten a response of ZERO).

Also, the message on your letter has to be compeling enough for them to call you or contact you. Email me your letter and I can critique and improve it. I've been sending direct mail to motivated sellers and I know response rate is a combination of how good your list is, how good your letter is AND how good are you at follow up.

Mark,

Based on my experience in my market (Cincinnati, OH), it's a bad idea to buy during FORECLOSURE AUCTIONS. Why? The bank will be there and will bid up the price to what they're owed.

It's better if you can buy BEFORE the foreclosure auction - and negotiate a SHORTSALE - or AFTER THE AUCTION when the bank bought it and it becomes an REO. You will get discounts when you buy before or after the foreclosure but not during the auction itself. Only the amateurs bid at auctions. The professional investors get the good deals before the foreclosure or they buy the REOs in bulk from the bank.

On your question on whether the house is overpriced...at $92K and it sounds like it needs repairs, it probably is. What's the days on the market in your area? If it's 90 days, here's the formula I use:

Maximum Offer = 0.9 x ARV - Repairs - Profit

Say the repairs are $10K, your ARV to be conservative is $130K...

If you're going to renovate the property and then sell it, your profit should be at least $20K. With these numbers, your maximum offer should be $87K.

If these are the numbers, I will start my offer to the bank at $70K.

If the days on the market is longer than 90 days, you need to use an even more conservative formula. If you're going to just sell the house to another investor/ rehabber or landlord, I will start my offer to the bank at $60K.

The bank will accept an offer lower than the loan balance if you can prove to the bank that it's in their best interest to do so. Read about shortsales in the forums here at BP for more details or email me if you need help.

After doing $13 Million worth of deals in the past 7 years here's what I can say:

STICK TO YOUR FORMULA FOR BUYING.

No deal is better than getting a bad one. You cannot eat equity so focus on cashflow. Just look at the speculators back in 2006/2007. They've made 30% gains but all those gains were wiped out when the bubble popped and I'm buying from them right now at 60% discount! Had they focused on the cashflow and not equity, they would still be around by now buying instead of stuck and hurting.

I've done this several times.
What you do is this:

Tell your seller, you need to put YOUR name and your buyer's name on the purchase contract to buy the property (A-B). Then at the closing, sign a quit claim deed (from YOU to your buyer) in exchange for your PROFIT. You have to get the right title company to do this as not all of them will agree to this (it's not illegal...it's unusual and usually a lot of title companies are too risk averse to do something unusual). Also, you need FULL DISCLOSURE to all parties involved specially to your buyer. If the buyer has an issue with a quit claim deed, then you cannot do this transaction as per the quit claim deed. Explain to the buyer that this is a way for him to get the property cheaper because you don't have to charge him extra for the closing cost and transactional funding cost you need to pay.

I agree with Mike C, Scott and specially Jon. The numbers are terrible. There are a lot of better deals out there - you just need to master the art of finding good deals.

Welcome Jeff. This is an awesome site. I have money to lend if you need help on that one. Or if you need any advice on a deal you're working on let me know. I want to help beginners like you just as how my first mentor of mine helped me.

Robert, this is tough one to comp. The properties are not comparable at all (very different bedrooms, and year built). I usually get the square footage.
I would say $180K to be on the conservative side or $190K at the most.

I agree with Crystal. You can do a double close but when you do, you need the cash to buy the property first before you can re-sell it. Even then, check with financing of your buyer to ensure they don't have seasoning requirements.

Yan, the developer still owns it because this has not been foreclosed yet. You have to negotiate a shortsale with the bank's approval. You should approach the Loss Mitigation department of the bank not the REO department.