All Forum Posts by: Jim Gordon

Call the exterminator to get rid of the mice. Post both your 24hr. notice of entry and demand notice at the same time. Don't put snap traps in the unit or one will close on the tenents finger or toe and they will go to the emergency room because of your actions. Good luck and remember a "self help" eviction or lock will get you into more trouble than you can imagine.

I ran into a pre-preforclosure yesterday at an open house. The people did a refi to consolidate debt. Then they got a divorce. The home is currently on the market with another realtor at to high a price for the condition. The owner approached me on my advise on what to do. The problem is money is tight for him and he has custody his two kids. Currently in a 6.9% ARM 2/6. Adjustment is due in December and he cannot afford to pay the higher rate. I gave him the name of my favorite lender but I don't hold out much hope for him. I didn't want to be all doom and gloom in my conversation but let him know that he needs to carpet and paint the home from feedback that I have gotten. Yes when people do an open house tour they talk about the bad ones. He said that right now he can't afford to carpet the home. In seven or eight months this will be a candidate for a short sale unless something drastic changes.

On someone like this he is not even thinking preforclosure his condition at the moment is ok. When he starts to miss bill he will be in denial and try to work something out until the process gets pretty far under way. That is the type of person that I have been running into lately. To upsidedown to set a price to sell the house quickly but just getting by until something happens. Most of the time when people start to miss payments they don't do anything when they get into trouble. In Ohio with the forclosure laws one person that I talked to had a lawyer tell him just to put his money back and live in the house for free for at least the next 8 months.

To clarify what I think you mean. It is a risk for a realtor to buy a preforclosure from an unlisted seller. A REALTOR® is assumed by the state of Ohio to have superior knowledge. The same could be said of an investor but it would have to proven in court.
The risk comes from the sellers remorse about transfering the property and not getting any money out of the deal. I have recently seen a property that people have an appraisal for 180k and on a good day it might bring 140k. If I list the property and deal with the bank through a short sale process and sell it to a third party I just have my normal liability in a sale. However if I purchase the property myself and negotiate with bank on preforclosure the current owner could think that she got taken and sue.
Short sales and preforclosure is a small part of my bussiness currently but about 18 months out I can see that growing exponentially.

If you consider .70 on a dollar a good price. People that are in the we buy notes line are working under the same premise as RE investors-- buy from a motivated seller. Solve the problem for the owner of the note. Pick up some cash on the way. Thats how they make their money.

There are good deals just like everywhere else. You just have to look at the property. Most REO properties are listed on the MLS. Some sellers are unrealistic about the amount of money that they want for their property and there will always be an agent that will list it just to get exposure. Just look and work on getting smart purchases and don't get the "gotta get a deal going syndrome".

There are different types of listing agreements but the only kind I will agree to is an Exclusive Right. That type is the most common and protects the seller and the sellers realtor in marketing a home. Why in the world am I going to invest time, effort, and money into getting a property sold and have someone come up to the owner and ask them to sell the home with no conpensation to me?
Who would reinburse me? I have to represent my seller but I also have to take care of my family.

Nothing wrong with the analysis the problem is that they are going off the sellers information. I have seen duplexes listed that are at 120k, rental income 900 per month and the owner pays utilities. There is no way with any kind of debt service that you are in a break even on the investment. The owner bought it 12 years ago for 40k and it is most likely paid off. For the current owner it is a cash cow for a new investor the cash only flows one way. If you hear that big sucking sound that is your cash reserves doing the cash flow thing.

The listings agents job is to get the property sold not to do your DD. If "cash cow" gets your attention then it has helped to market the property. Never trust the numbers provided by the listing agent when you are looking at investment properties. Partner up with an agent of your own that can run the numbers for you. You would preferably want an agent that owns rentals also. Not that manages them for other people but has there own hard cash invested in a property and deals with their own tenent issues.

Whatever you have worked out in advance. That is the key have it all in agreement up front and go from there. Investor 2&3 who are putting up hard money might take a fixed return and investor 1 could support all the risk and possibly make a greater return. All the investors could split per contribution percentage and make investor 2&3 share some of the risk of cost overruns and not getting the selling price or timing that they expected.

Run them all and see what comes back. Some people put up a good front and when you run them you find out how bad they are. These are your professional tenents. When you get everything weeded out all you can do is go with your gut but make sure if you have a protected class to lean their way.

It all depends on the state you are in and when the transfer happens. Look into setting up a trust and transfering the property into that. That way you can protect the property that your parents are gifting you. You all need to talk to a good financial planning lawyer both to set up the trust and investigate gift taxes and ways around them.