All Forum Posts by: Jason Mathews

Sorry Sher,

GRE should have been GRI and it stands for Graduate Realtor Institute, basically some extra course works and a few years experience to qualify.

On the subject of Credit Unions, I meant Local to the Properties, not local to you.

I have an excellent Credit Union in Rochester NY who writes all over the country but they won't do a flip.

Wow Sherry! Talk about jumping in with both feet. I appreciate that you did all that due diligence, but if it were me, the very first thing I would do (assuming you don't live in the area where these homes are located) is contact a Local Realtor and ask him/her to pull some good and as recent comps as possible for you. Ask thIs person to start with 1/4 mile and 3 months for comps and spread out from there. Many of the sites you mentioned are nice guides, but personally, I find they are off the mark sometimes by as much as 20%, especially Trulia and different municipalities assess at different percentages of actual value and the last Tax assessment may have been several years ago. Again, if it were me, I would find a local realtor preferably with a GRE designation behind his name and offer him/her the sale listings in exchange for what ever assistance they can give you. These local Realtors will have contact with Local contractors to give you work estimates and also local lenders who are actively seeking new business. In Case your wondering, I am not a realtor, but have been investing in RE for 30 odd years and know when and where to ask for help. It is a rare situation that would cause me to invest out of my local tri state area (I know the local market well) but on those occasions when I do, I go strait to the nearest GRE with a good reputation. In addition to asking for recent comps, I would also ask for average days on market. Additionally, I would ask them to do some rental comps. I know, you want to flip, but a good backup plan can save a lot of stress and there are many investors around that like nice clean properties that already have tenants. Get a good rapport going with the local expert and in exchange for the promise of a future listing, they can put you on their "not afraid to jump in with both feet" list and refer you to other great buys. I have such a rapport with several realtors from Charlotte NC to Dallas Tx, who e-mail me regularly with great buys. We are at the point where they just write "buy this", I do, and they handle everything else from repairs to Carpet selection and then they market and sell or rent.
As for financing, I would avoid Hard Money loans if at all possible. Look for local lenders, I find Local Credit Unions are often a great source of funds and it will help if you tell lenders that you plan to rehab and rent. many lenders today don't like the word "Flip". If you have equity in your personal residence, you might consider a Heloc. You might want to let people you know, know that you are investing in RE. Don't ask them for money though unless you know them really well. I just tell people about the wonderful deal I found, show them the pretty Market Analysis the local realtor did for me and once in a while they say, Oh, gee how can I get involved :). Worse case scenario, there are several site online that offer Hard Money loans as a last resort.

Hope that helps.

Sherry Can you tell us the name of the site you ***** out? As for whether is is a good way to get properties, it all depends on if you did your home work and checked the comps. Just because a property is listed on Foreclosures.com or Ocwen.com or Homepath.com or Homesteps.com to name a few doesn't mean they are a good deal. Many times properties on those sites are listed at what the local Realtor who is getting the listing comped it at and they may be offered at basically the same Market Value Price as other homes in the area. Often times, especially if those homes are in need of repair, they will sit on the site for awhile and eventually you will see price drops but very often, even with the price drop doesn't bring the price down low enough to make it worthwhile. So, as I said in the beginning, it all depends on the comps. If you bought a 3 bedroom ranch for example for $xx,xxx and the comps in that same area are all X% higher (you have to decide what % discount you desire), then you may have a winner. I personally always look for a 25-30% minimum difference less repair cost between local comps and what the site ids offering. I hope this helps.

Thanx Sean, Can I assume you live in the area and manage the properties your self? Your wouldn't want to share the name of that lender would you? Not that I will be running up there anytime soon, just wondering

First: to John Holme Yes, I know it was from 1961. I have another article written in March of 2011 that reads almost exactly the same way. I can give you the link if you like. I was simply pointing out the beginning of the end.

Second to Sean H Thank you so much for your reply, the first one that actually answered my question. But, let me ask you something else. You say that you refi to get your cash back out. Are you finding that Lenders require you to wait 1 year from your purchase date and only willing to use the price you paid for value as is the case in most of the rest of the country? Or are lenders actually sending an appraiser out to the property and giving you a whole new valuation?
Also, have you thought about what you will do when your total mortgages hit 4, which I believe is the max number of mortgages any one individual is able to have under FNMA guidelines.
If you prefer to PM me, you are more than welcome to and either way, thanx again.

Paul

Sorry if I offended you or your Municipality, City, Area or what ever you would prefer to call it.

As for Sensationalism and Conjecture, No, the Auto Industry is not Kaput, it is just Kaput in Detroit.

http://www.time.com/time/magazine/article/0,9171,873465,00.html

According to the above article, The Motor City began it's decent in 1955 and as for the Steel Industry, the AREAS around Pittsburgh have been trying to make a come back in the last few years with their economy going down the perennial "turlet" when Ryerson Steel Closed its doors also in the 50s.

Let's not turn my post into a SnowBall slinging fest shall we. Whether Detroit is a Municipality or an area, I suspect you knew what I meant. Oh, and yes, I know I spelled Toilet wrong.

I am hoping to hear from people who invested in the Municipalities and the areas around them and purchased from wholesalers in those areas and I would like to know how they are doing with their investments. If others are considering investing in those areas, then I am asking them to tell me why.

Phil,

Maybe you missed the main question, or maybe I didn't explain what I was looking for correctly, either way, I hope my reply clears up any confusion.

I believe that all of those areas I mentioned are terrible places to invest and that the wholesalers who are pushing those areas both in the past and currently are taking advantage of unsuspecting novice investors. I know how they make their money. I am looking for replies from anyone who is buying in those areas in the hopes that they can explain why they are and also from anyone who purchased in the past in those areas to see how they made out.

Unlike many people who are buying in those areas, I flew to Ohio, Detroit and the Pittsburgh area on different occasions and did my due diligence, Then I hid my money and credit cards in my sock and drove my rental car as fast as the law would allow back to the airport.

Maybe, I missed something, maybe I am not as smart as I think I am, so as of today, wholesalers have been selling property in those areas for about 5 years and I am hoping to hear from people who either did buy to find out how they are doing or people who are thinking about buying to find out why on earth they are even considering it.

Can someone tell me what the attraction is for Real Estate Investment in the above 3 areas. I get a ton of e-mail from Wholesalers in those 3 areas, and It appears that the wholesalers are doing quite well.

It doesn't make any sense to me. I read an article a few years ago that said Toledo was voted "the City Most Likely to Die", The Retail market in those 3 areas has been DEAD for more than 25 years, Since the Automobile and Steel Industries went kaput, they each have some of the highest number of foreclosures in the US, some of the highest unemployment rates, banks wont allow Cash out refi's in those areas because values continue to decline, so how are all these "Investors ?" making any money?? Yea, I know, some are buying for the Rental Cash Flow, but unless one has an unlimited supply of new cash to buy more property with, that game can only last for so long.

A few years ago a company called Penny Foreclosures, based in Nevada (interesting in and of itself), was buying up 100s of properties that had been vacant and boarded up for more than 25 years and selling them to what I call Investor Wannabe's. The deal was that one had to pay cash, the company had contractors in the area that would do the required repairs which the investor also paid cash for and they would rent and manage the property.

I even got interested myself and drove to the area to check out a few of the offerings only to find out that the comps they were providing - many times weren't even in the same town as the subject properties, and of the two props I went to see, they were on streets where every single house and business on the entire street was boarded up.

A few years later there was a company doing Investment bus tours to certain area in Michigan with bus loads of out of state investors who were buying like Hot cakes. This company had people convinced that Cash Flow was King and they were even giving the the buyers the first year rental income in advance. I guess when you are buying SFH for $500.00, Putting $5000 in basic Repairs, and selling to an out of state "Investor?" for $25,000 with a Section 8 Tenant in place, you can afford to give a credit for a years rent?

I would love to hear from anyone. especially anyone who has purchased Real Estate wholesale or otherwise in any of those areas and tell me how your deal went, did you make any money, have you been able to flip the property if that was your intention, are you able to Refi the property if holding was your intention, etc.

Jason

Can someone tell me what the attraction is for Florida Real Estate? I get a ton of e-mail from Wholesalers in Florida It appears that the wholesalers are doing quite well. Preston Ely supposedly (according to himself) is doing better than $100,000 per month in wholesale deals.

It doesn't make any sense to me. The Retail market in Fla. is dead, it has one of the largest number of foreclosures in the US, one of the highest unemployment rates, banks wont allow Cash out refi's in Florida because values continue to decline, so how are all these "Investors ?" making any money?? Yea, I know, some are buying for the Rental cash Flow, but unless one has an unlimited supply of new cash to buy more property with, that game can only last for so long.

I would love to hear from anyone. especially anyone who has purchased Fla. Real Estate wholesale or otherwise and tell me how your deal went, did you make any money, etc.

Bob

If you haven't purchased Phil's AMPS course, don't waste your money. The idea and it's presentation make perfect sense in theory, but reality is always more difficult. In the presentation, Phil tells you that finding buyers is much easier than finding sellers. OK, that makes sense.

I purchased the course to have a closer look at the details. First thing I find out is the web site contains over 19,000 buyers, and less than 500 sellers in the entire USA. I guess he wasn't kidding.

The whole premise is that a seller will allow an unqualified buyer to assume his mortgage payments and the due on sale clause is handled by sending a letter to the Bank involved telling them that this is what you are doing. If the bank doesn't reply in 15 days, it is assumed they agree. Problem with that thinking is that the person who makes that decision at the bank may not even see that letter in 15 days.

Look at it a different way. Try sending the bank you have your auto loan with a check for $100.00 and write on the memo line of the check "payment in full". Then wait a couple of months without making any additional payments and see if some big guy with a tow truck doesn't show up to take your car away.

I contacted by e-mail about two dozen members of the program in various parts of the country and not a single one had done a deal - not one.

One last thing. In the presentation Phil tells you that Foreclosure is the Credit Bomb of life and that people who loose their house to foreclosure can plan on being tenants for the next 10 years. That just isn't true. It's about 3 years and most sellers in that position would rather face that problem than dealing with an angry bank suing them for violating the due on sale clause when they finally get a round to it.

Hope that helped,

jason