All Forum Posts by: Robert Dobbs

Hi Tod, I have not been too lucky with golf course lots. Usually they are either too expensive, the taxes are too high and/or have monthly HOA fees, as the "value added" benefits of being a "golf course lot", most likely will not work with the "blow-out" pricing I need to resell quickly.

For example, I just bought (on 12/21/11) a nice 1/4 acre vacant lot one block over from "the 4th Fairway" in Citrus Springs, Florida (re: a block away from the El Diablo Golf & Country Club), ...from a bank for an "out the door" price of: $1,175.00.

There is another REO lot owned by another bank that backs-up to the fairway. That other bank has been trying to sell it for around $20,000 since 2007, yikes!

When I made an offer for this "fairway lot", I could not get them to get off "their special assets" and make a deal!

LOL!

Bob
Land Rescue League LLC

I bought 28 properties since the first of the year. 25 were REOs from three different banks, plus three vacant lots from an absentee owner, who inherited them from his deceased parents. I deal mostly in vacant land.

Getting those bank asset managers, "to get off their assets" and make a deal with me "is the real trick"!

I portray myself "...as a land liquidator, who works on thin margins!"

Bob
Land Rescue League LLC

P.S. The original poster Jackeline "hit the nail on the head". Finding good deals on a consistent basis is the challenge!

I would create a well thought-out offer to purchase for your neighbor's adjoining 6 acres!

1. How much are you willing give as a down payment?

2. Are you willing to pay your neighbor's full asking price?

If you feel that offering full price for this adjoining parcel of land, plus a reasonable down payment would create an owner financing possibility;

Try this:

Dear Neighbor,

I own the house in front of your land. I would be willing to pay your full asking price for your 6 acres.

I you are interested, please contact me, as I'd love to discuss buying your land with you, as soon as possible. Feel free to call me or stop by anytime!

Sincerely,

Joel K,
Your Neighbor

Keep your "cards close to your vest" until you talk with the owner. Many times a "warm and fuzzy" direct conversation with your neighboring land owner, can open the door to a great owner financing situation. Especially in our economic environment. Knowing that a homeowner right "next door" wants to by my land (at full price!) would make me very motivated to speak with you! If the landowners live out of the area, get their mailing address from the "county records" and write them a nice letter, introducing yourself as their "neighbor, next door", telling them your situation. (If this parcel is listed with a real estate agent, make sure you let the agent know that you will make sure that they will get the full real estate commission, and it will be paid directly from your down payment. That makes the agent motivated to see the deal get done!!!).

Owner financing deals are fairly common with land. And the fact you own the adjoining house and live there, is a huge plus for you!

Good luck to you!

Bob Dobbs,
Managing-Director
Land Rescue League, LLC

Obtained 15 REO vacant florida lots in January from two different banks. Sold eight right away via ebay, craigslist (sold to buyers in France, South Africa, Azerbaijan Republic, San Tan Valley, Arizona, Broken Arrow, Oklahoma and Wakefield, Rhode Island. My business model? Well let's just say, "thank God for the Internet!" LOL!).

Lots of work, little margins, but hey, that's what I do, ...my "labor of love"!

2012 is off to a good start for me!

Bob
Land Rescue League LLC

An interesting Website for you to look for all kinds of land for sale, anywhere on our planet!

http://www.landwatch.com/

Bob
Land Rescue League LLC

When you say rentals, can you spell

DWELLING FIRE POLICIES

Let's compare: (...with just some made-up, fantasy scenerios!)

1. Paying 50K cash net for a house, and owner financing it out.

or

2. Paying 50K cash net for the same house, and renting it out.

Let's assume the house needs 8K in rehab in order to make it rent-able.

Under the "buy & owner finance" scenario. You may get by, let's say with a smaller rehab tab of 4K (as you could express to the "buyer prospect" that you just did 4k worth of rehab) and leave the other 4K "on the table", as a bargaining chip.

Let's assume the house has an "after repaired appraisal value" of $75,000.

Hold out for a buyer with at least 20% down or at least $15,000 (try to get a little more, like "if the buyer gives you $2000 more down, you will match the 2K and do the extra 4k in rehab work! or just try to get a little more than 20%).

Why this may be important? Well now you may have a solid mortgage and note with almost 23% ($17,000) as a down payment! Will make the note much easier to sell if over 22% down, for sure!

Let's say to do a $58,000 15 year "note & mortgage" at 7.5%, which relates to a $537.67 payment.

Your investment was $50,000 net for a house, plus 6K in rehab, for a total of $56,000.

You have banked $15,000 ($17,000 minus $2,000 of the buyer's down payment, that you used towards the 8K rehab).

Plus, you will receive $537.67, possibly for 180 months or 15 years! ($6,452.04 yearly or a total of $96,780.60 in monthly payments.).

Or how about just selling the note?

Let's say after a few months (let's say 6 months, you sell this note at a $6000 discount.)

Because you collected more than 20% down that has an attractive interest rate (7.5%) for a notebuyer and a 15 year note (that is now "seasoned to", let's say 14 1/2 years to maturity) is also attractive to a notebuyer!

You will collect the following:

$ 52,000.00 cash for the note
$ 03,226.02 cash (6 monthly payments of $537.67)
$ 15,000.00 cash - down payment banked

$ 70,226.02 cash in 6 months.

You invested $56,000 and received just about 29% return (or a $20,226.02) profit in six months! No too shabby!

Or just keep the buyer, for as long as 15 years!

You already have $15,000 of your $56,000 investment back.

So you are collecting $6,452.04 a year on a $41,000 net investment ($50,000 net + $6,000.00 rehab, minus $15,000 down = $ 41,000.00), for 15 years!

Now let's look at renting:

Let's guess that "market rent" for this house is $750.

You got 58K in cash already invested, plus the annual property taxes, insurance and the ongoing possibility of major repairs, future tenant damage, vacancy periods, possible future assessments, future code violations, etc. Plus no guarantee of getting "long term tenants", plus all the other "land lording" issues that can pop up, ...and then a strong possibility of repainting, new carpets and more, every few years or so, until you find that "long-term tenant".

...for $750 per month!

You have a 75K asset that you paid 58K for. So that's good and you have gross rental income of $9,000 per year

Both ways can be rewarding and a as Brian Hancock artfully expressed, "a number of things may happen", which could cloud-up your returns (and your sanity too! lol!)

Me? I really like having that "$15,000 cushion"

Happy New Year to all!

Bob Dobbs
Land Rescue League

Three things to remember.

1. Location
2. Location
3. Location

50 cents on the dollar and a great tenant can't hurt!

LOL!

Bob

P.S. Good luck to you and I'm confident you will succeed!

I would talk to him about what you overheard the builder say to him (i.e., racist remarks).

Tell him that because of that, you would prefer to part company.

Tell him, "I prefer not to make waves with your broker, or with the state real estate commission, so let's mutually agree to cancel our agreement. OK?"

Bob

I rode the countryside, shouting to everyone,

"the British are coming!

Giving Paul Revere some time-off!

Bob