All Forum Posts by: Randal McLeaird

I've talked to many REO agents and it appears they would prefer to rep both sides.

As one put it to me: "paper work is easy to lose".

It's unethical but it happens. If you know this, you're offer is going to be more attractive even if it's less and has their name on both sides of the deal.

I agree - I asked him for the books (exactly how I put it - not sure if it's the right terminology) and he said there are none...so, I'll go back and ask him for the Schedule Es.

I was unclear on the second part - you say based on the info the offer price I suggest is reasonable. Do you mean the $135k or the $425k with decent terms?

Thanks for your reply

Is the current offer $109k? What is the appraised value?

Is he HAFA eligible? If so, you might want to try that route with the current offer because it will avoid the note or cash to close problem and he could receive $3k at closing...

I'd read up on it a bit more but I know that's the direction we're taking all our sellers if we can get them into the HAFA program. Speeds up response times and helps the seller. This seems to be true IF there is already an offer on the property.

Good luck

Good work. Always love hearing a successful flip!

make sure you're putting the flutes in the right direction as well.

If you've got the metal H frames you obviously need to have the flutes going vertical. If you're sticking them on telephone poles, get the horizontal flutes.

I agree with the comment above as well. smaller and preferably lean them against something. if you're staking them in the ground, try to lean them against a stop sign, telephone pole or something else that will shelter them a little and keep them standing...or you could use wood and get a ladder and drill screws through your sign to a telephone pole.

Not that I advise it but I've seen it done in San Antonio. I talked ot code compliance and they told me if they catch the guy he's screwed but they still haven't taken his signs down because they don't have the tools.

CYA if you do that.

Hey guys, wanted to do a follow-up to this post. The occupants ended up having a lease/option or contract for deed the mother of the lady i was dealing with set up with them back in 2000. Term was valid until 2010.

Once I put the eviction notice on the door I got a call the next day from the occupants attorney who sent me the docs showing he had an interest in the property. Turns out, the mom gave the property to the daughter (who I was working with) but the daughter told the mom to keep it rented and keep the cash flow as supplimental income.

Turns out the mom has Alzheimer’s and did the contract with the occupants...without being the record title holder at the time. So she sold something she didn't own and waiting till the end of the term to make a stink.

If the daughter were to challenge the deal she'd put her mom at jeopardy of being sued for fraudulently selling something she didn't own.

On top of that, the attorney for the occupants told me he did some digging and found out the mom/daughter combo had done this before on another property......

I was wondering why the deal was so good..lol.

Anyway, at least now I know what to do in these situations.

All the best.

Hi everyone,

I've been dealing only with resi deals and happened to be on craigslist the other day posting some of my rentals and came across a post. Called the guy and found out he has a a couple multi-family properties within a close proximity of each other.

What I know:
16-unit
9 occupied
Avg rent/unit $450 includes water/elec (per owner) - I've only talked with one of the tenants.

When I work out the NOI I'm taking the Gross potential rent - $86,400 and a 43% vacancy rate (in order to get actual figures) to yield Net rental income of $49k. My NOI on estimated operating expense figures is $16,000.

Seller wants $425k with $25k down and finance the rest.

At that price the cap rate is 3%!!! Absolutely not gonna happen. I don't know all there is about the class of properties but I know enough about the area to know its got to be a C or D. When I plug the numbers in for cap rate at 12% I get a value of $135k.

So, my question is, am I calculating this properly? I've seen multiple times in the forum posts something about a 50% rule...not sure how that works. I've got 3 CRE books on my desk I'm burning through as quickly as possible but I'd like some experienced feedback.

I'd like to get into commercial and probably won't do this deal but I'd like to start getting a better handle on it.

If this deal could make sense another way and be profitable, I'd love to hear suggestions. Obviously getting the other 7 units rented would be key but it still doesn't justify the current asking price. The only way to get even close to his asking price is to do a proforma deal taking into account the hypothetical rent on the remaining 7 units....does anyone in this forum actually do that??

And how do the financing terms play into the attractiveness of this deal. I just ran the numbers and if I can get the other 7 units rented and take a 10% vacancy (accurate or should it be higher?) I should cash flow around $2k/mo on my $25k investment...not the best return but not the worst either. My resi deals don't cash flow me that much for a $25k property. If I don't get any other units rented...then I'm in a troubled spot.

Thanks for all the help and advice.

Guys, thanks for the comments. Scott knows our ss business first hand since he's been helping us with a lot of questions we've had. And smitnlit, Scott has been preaching the exact same thing - qualify them before taking them as a flip. We've been changing our focus and we're moving more in line with that mentality - not fast enough but we're getting there.

Part of my focus has been long term investments. I'm buying little dinker houses with the idea of doing little to no work on them and seller financing them. Like you said Scott, this is a very hot area right now. I happened to buy in the wrong area but bought at the right price so I'm ok with the two most recent purchases. From here on, I'm looking to add a couple rentals/seller finance houses every quarter.

Will, what types of flips are you doing with the REO's? Are you fix and flip or just buying and seller financing or renting? Thats how I bought the two most recent houses and I'm flipping them as RTO and seller financing one. Is there a different approach you're taking?

I've seen some around town that are decent FF properties but I'm not inclined to do any rehabs and tie up more money until more qualified financed buyers hit the market. I could see this being a market if I'm able to get the properties at 50% or less ARV including repairs. There is still a lot of demand for wholesale deals in SA so those are few and far between. When they come up I'm all over them but we're being very selective now.

With the short sales, we're still in the market for them and not going away any time soon. One reason we might have a more difficult time flipping is because most/all our leads are coming from listed properties. Are most of your flips self generated leads?

Terry - A-C is a non flip short sale. Meaning there is no investor in the middle making a profit.

Yeah there are a few. Just got your request and accepted it. We'll have to catch up to discuss.

There is Lifestyles, its a fee based membership program. I don't know much about it.

SAREIA is gone unfortunately.

I went to a meeting last night that I can send you a link for if you send me your email address. Was small and had mainly realtors but at least its a networking group.

While there another investor told me they're grouping with an Austin REI group who I know of and know they do a lot of business. So, that starts next Thursday.

Shoot me an email or PM and request the info and I'll send it over once I get it.

Thanks Hubbard. Always have good info. But, was looking for a different type answer. The overall economic outlook is understood. The fact that we borrowered buyers from the future is being felt in my rehab/flip biz.

However, what I'm really interested in is the type of investment(s) others are finding useful since there is a decline in the ss FLIPS.

Since we recognize the trend there must be a way to capitalize on it and I'm just wondering if others are...and how.