All Forum Posts by: Katrina P.

Can you Detroit investors let me know the areas to buy in? Which areas do you think will be east to sell in, should I purchase there? Thanks!

What's the best way to find a RE Agent in Michigan, who would be willing to pull comps for me for tax foreclosures I'm interested in, then be willing to list the property for me when they're rehabbed and ready to sale?

Hi All,

Hubby and I will likely buy a few tax foreclosures next month. Depending on the possibilities for each house, we will decide at that moment whether we will fix and flip or buy and hold. Anyways, we're brand new to this, so I have a few questions:

1. Should I form an LLC now?
2. Initially, we will begin investing in another state, so if we form an LLC, does it have to be in the state we plan on investing in, or can we form it in the state we live in? I'm pretty sure we can form it here, but just thought I'd ask.
3. Also, if I currently have an LLC setup, can I just change the name on that one and use it, instead of opening a new one?
4. Can we use our accountant here or should I find one in the state we plan on investing in?

Also, would anyone mind sharing some of their experiences with buying tax foreclosed homes? What's the average price you pay, and the average cost of repairs? When flipping, what's the average profit you make? I'm just curious :-)

Thanks!

Katrina

Thanks for your response, Jon. I truly value it.

To comment on a few things you said: Of all the comps I have, I did not only look at the average, I just posted the average to summarize. I think it's a good idea to ask the Agent for ALL comps, though, like you said. I haven't done that yet, but will.

The property was originally listed for $199k - it eventually dwindled down to $169k; that's one of the reasons I feel that it could be worth more than the $169 they're asking. It didn't sell at $199k, you're right, it probably won't sell at $200k. My thing is this...what's wrong with me placing a bid (for between $130-$140), and if it's approved, selling it to an investor for $145k? Are you saying that investors just don't want to pay $145k for a townhome, period? If that's the case, then I can see why you don't think I should even bid. Just like I asked Tracey, am I too high in my price range for wholesaling? Is that an issue?

I will definitely start reading some books, along with the information here on BP. Any recommendations?

Thanks guys!

Okay guys, I just looked a little more closely at the comps the Agent sent me, as well as the comps on redfin.com. ALL of the properties had around the same sqft, as well as the same # of beds/baths, etc., and they were all under 2 miles from the house I'm interested in (based on mapquest's calculation). Here's a rundown of the facts:

# of comps Agent sent me: 8
Average price sold comps from Agent: $214k
# of Active comps and average price from Redfin.com: 10/$231k
# of Sold comps and average price from Redfin.com: 10/$211k

I'm still going to go to the area this wknd, and also go inside the house (the Agent gave me the code) while he's out of the country for a few days. I want to look at the area just to see if all of them are similar, as far as quality of neighborhood, etc.

So here's the deal, I am planning to pursue this one. The Agent is out for a few days, but it gives me enough time to go look at it with my husband, and get my ducks in a row. I have three questions: How reliable is redfin.com, and should I even continue to go to that site for information? And is there anyone here willing to walk me through the process on this one, and of course, split the profit 50/50 if it goes through? I would simply follow your instructions, and I will do all of the work. If the deal goes through, you'll get 50%. Any takers?

ETA: Since the house is in move-in condition, I'm thinking I would make an offer of $140k (70% of $200k). I think that's slightly conservative, yet realistic.

Thanks to all of you for your responses. I truly appreciate it!

He sent me some comps...of course they were the "good" comps...all priced high. He didn't send me the one for $114k that I saw on redfin.com. That was a test for me to see if he would be trustworthy enough to establish a long-term, solid relationship with him, and he failed. Nevertheless, I plan to go to the area to see the proximity of the places he sent me, to the place of interest. I just don't trust that he didn't pull those comps from too large of a radius. So I will check myself. Also, I will begin to look for a Buyer's Agent. I have already been testing the waters with this, just by contacting Agents and seeing how responsive they are...none have passed THAT test with even close to flying colors. So I suspect that will be challenging all in itself. It's okay...I'm up for it.

Tracey, to answer your questions: I don't have a buyer lined up yet. How can I get a buyer without even knowing if I'm going to bid on the property (I know that I can have a list of "go-to" buyers that are investors, interested in good deals, but I will develop that list over time). And I WON'T bid on the property if I cannot determine, with a level of certainty, that it's a good deal, and that I won't have a problem finding a buyer (or several). I've read on here that if it is indeed a good deal, finding a buyer shouldn't be a problem. I believe that. I don't really care how my buyer will pay me for the flip, unless there are stipulations in place (e.g., that it must be an all-cash buyer), which in this case, there aren't; therefore, it could be financing or cash - doesn't really matter. As for the lending guidelines on financing a newly-purchased home, I am still learning. I am aware that different banks and different title companies do things differently. But would you care to share some of your knowledge in this area? Sure, I am aware of what seasoning means, and this is not an FNMA property, so the 90-day seasoning does not apply. Neither is it one of the others that require 30-day seasoning, so no issues there. However, when I come across one that does, I will submit a request to have that restriction removed, and we'll see what happens.

Tracey, I know you previously mentioned that my price ranges were too high. However, I'm still not understanding why you say that? If I can find a good deal, that I won't have a problem flipping, why does it matter how high my price range is? Maybe you (or anyone else) can shed some light on this, and let me know if I'm missing something? Also, I just want to say that it is very obvious that I'm new to investing - I have indicated that in my profile, and in every post that I've made so far. Therefore, I absolutely do NOT know everything there is to know - not even close. That's why I'm here. Everyone has been so gracious to add their two cents when they get a moment (including you), and I can't stop saying how much that is appreciated. However, it seems that your approach is much different than everyone else's. Instead of just giving your advice, based on your experience, you seem to attempt to quiz me, in an effort to point out just how much you think I don't know. It is true that I don't know a lot, but I am reading and educating myself DAILY, and I am determined to be successful in this business. It's funny because I'll admit...before this week, I didn't know what "seasoning" meant, but I do now because of my persistence in my education :-).

Please don't take this the wrong way, All I'm saying is that I'm here to learn (and to eventually share my knowledge)...from you, and everyone else here who is willing to share. But when you respond, can you make an effort to respond with more of a helpful nature instead of quizzing me about what you think I don't know (and maybe I don't), and telling me all the reasons why I may not be successful? I know you didn't say those exact words, but that's how what you say comes across. Again, I appreciate your willingness to even take the time out to respond!

Katrina

Thanks, guys. I appreciate your advice.

Thanks Bill!

I'm definitely not going to rely on him to tell me the comps. But how do I pull comps without having access to MLS? Should I just establish a relationship wth a Buyer's Agent?

Thanks, Jon!

My thoughts are the same. I was thinking of making a "ridiculous" offer of around $90k-$100k (since it's been on the market for so long) and see what happens. Your thoughts?

An agent that I'm working with, told me he has a short sale listed that is a "good deal". Here are some of the specs:

*On the market 91 days
*3 bdrm/2 baths townhome
*Price was reduced from $199k to $175k to $169k
*Agent has not sent me comps yet, but on redfin.com, I'm seeing Nearby similar sales in last six months ranging from $114-$259k (one was sold for $114k, one for $160k and one for $170k; all others were > $200k, which were 7). I'm also seeing currently active similar sales ranging from $214-250k. Without having sent me the comps yet, the Agent "said" that the comps are around $220-$230 in the area. So if he's correct and truthful, there's a profit margin there.
*Property is in move-in condition
*Property is vacant (which is weird, right? Why wouldn't the owner stay rent-free while he figures out what's going to happen w/the property?)

Here are my thoughts:

*Even though I'm inexperienced, I'd like to jump in and get my feet wet, and this may possibly be a good deal.
*I'd like to use transactional funding to flip the property for a small profit - not looking to make a killing, obviously.

So my questions are:

*How should I pursue this property, if at all?
*The Listing Agent said that he sends the offer into the bank and does the negotiations. Although, I've read on here that isn't good. Can anyone tell me why I shouldn't let him do the negotiations?
*Should I just submit an offer through the Agent (since I have no experience under my belt), or tell him I'd like to work this transaction on my own (ensuring him he will still make his commission, of course), dealing directly with the owner, and allowing my negotiator to deal directly with the bank? Of course my issue with this approach is how do I develop the "trust" from him to "hand over" his client to me to work the short sale?

Obviously I need a lot of help and asked a lot of questions. However, please just provide any help possible.

Thanks in advance!
Katrina