All Forum Posts by: Ben Skove

George P. You're right about that; however, it puts me at a disadvantage in that I don't know what my rehab costs are prior to my offer. That's addressed by adding an inspection contingency, but if the person who "misplaced" the key makes an offer without that contingency - given that they know what things look like inside - it makes their offer more attractive.

Rob K Great idea about re-using the key! Unfortunately for jimmying the lock, the sorts of neighborhoods I look in typically have enough crime going on that the deadbolt is usually locked. Also, hopefully you give your questioners a bit of squint-eye, as if you're sizing them up for a cell.

The realtor and I did try that angle - unfortunately, the house was well-secured. Good for the house, bad for us. :)

In addition to those already mentioned, I like CrimeReports - lets me see what criminal activity is going around property I'm interested in.

For the second time in a short period of time, the key for a property I was interested in was missing from the lockbox. It happened to be for a particularly good deal, and my realtor said it wasn't unknown for real estate agents to pocket the key to make things more difficult for other buyers.

Adding insult to injury, the property went pending before I could get inside it. (Evidently the listing agent wasn't able to get a new key out the same day.) This was frustrating, and while there's the possibility someone did it on accident, it seems very suspicious.

I imagine there are probably no consequences for unethical behavior like this. Has anyone else run into this sort of thing?

In the process of making a spreadsheet of the properties in close proximity (2 blocks) of my rental, I discovered that one of the properties is a REO that's been transferred from bank to investor to bank since 2007, finally landing last year in the lap of a bank who purchased it as part of a wholesale package. It hasn't been on the MLS or otherwise marketed, to the best of my knowledge.

Initially they stated it was for sale and were going to give me the lockbox code. Then, they realized that the property was still occupied, albeit in the process of eviction. They stated that they'd call me back in two weeks, post eviction, and let me do the walk-through then.

The exterior looks decent. The current occupants give me a little hope that the interior isn't horrible - a little landscaping, hanging plants on the porch, etc. The bank is asking $15K for it, the ARV is only in the neighborhood of $35K, but rent would be $750 - $800.

Obviously, a lot will depend on the interior rehab costs. Assuming that it's a go, what's the best way to approach this? The market here has definitely picked up and I'd like to slip into this deal without dealing with yet another multiple bid situation. I'm just not sure what the bank's strategy is.

My first thought is just to have everything lined up and ready to go so that I can pull the trigger immediately after the interior inspection.

My second thought is to try to make an offer in the next few days (contingent on the eviction) and inspect the interior after the occupants are out but during the contingency period.

Thoughts?

I've only dealt with plaster for years and years - kinda can't wait for a house that's only drywall! I agree, plaster washers are great. Another thing that'll help when the plaster has separated from the lathe is to drill a few holes and reattach the plaster with an adhesive - Big Wally's Plaster Magic is one example. This takes a while and can be pricy, but if you're working in a high-end historic house it can work wonders.

If you're a true glutton for punishment and have a wall that has significant cracking and problems, you can order 3' wide adhesive fiberglass mesh, apply it, and skim coat the whole shebang. There are various youtube videos out there that show how to do it.

Another trick I've used on a wall in need of a great deal of help was to just put up a plain paintable wall paper (sometimes it's called "wall liner"). This won't work if there's significant damage, but it worked very well for myriad cracks and crazed areas.

Good luck!

To pile on with everyone else, it's all about the return. I don't mind a little additional tenant hand-holding when I can recoup my investment in 2 or 3 years, like Nick. As a bonus, I'm hoping that being active in improving the neighborhood will allow for some modest appreciation as well.

I think, though, you need to know your target audience and give them what they want. Be forthright that you want to wholesale properties at a certain price range, then provide something that meets their numbers. Just keep networking!

Plus, though I may be frugal, I'm willing to pay a wholesaler what it's worth for a good deal. If you're creative I'm sure there's some profit to be had in lower-end cash flow properties.

I agree with Shawn and George - search public records on your own as well as using what you get from your screening report.

I've also found Facebook to be a useful screening tool. I find it really remarkable how much some people will share about themselves.

Definitely go belt and suspenders with these things - jack and posts. I also did as another experienced rehabber advised and also strapped the new beam to the joists during the process.

Shims, wide footprint steel plate, and take your time jacking it up (especially if you've got plaster in the house - if you don't give it time to adjust it /will/ crack.)

The WSJ had an interesting article on the front page yesterday on institutional investing in SFHs - it's a good read about their strategy. There isn't much discussion about their exit strategy, other than the claim that most are in it long-term.

As far as a downturn goes, if there's one in the medium-term I see it coming from interest rates. There's still a large shadow inventory out there, while new starts are increasing to meet the current surging demand (in some markets.) If the current surge is primarily driven by investors, increasing interest rates are going to dampen their enthusiasm for SFRs. When that surge ebbs and the market returns to being primarily homeowner driven, there's the possibility of again having a lot of inventory on the market.

So, once interest rates increase, it puts a crimp in housing and generates a negative feedback loop in the economy.

What I think (and hope) is more likely in the short- to medium-term is that the current surge will return to what's been the historical trend line - housing prices following inflation and productivity. Naturally, this depends on the economy continuing its slow, albeit unsteady, recovery. Depends on how you like those odds!

Joffrey Long If you see a downturn looming in the near future, what steps would you take to prepare?