All Forum Posts by: Edward Briley

 Here I am sure throughout the United States you can sell a home legally if you do not allow inspections on a home.  (Unless it is an auction buy).  The only way to get around in doing that is selling the home for land value only.  - And I am not even sure of that.  If you do not allow for the purchaser to be able to get an inspection on a home, before they finalize the contract, you may even open yourself up to law suits.  I know here, and I am sure throughout the United States, that when a contract is signed, and a purchaser agrees to buy a home, they have 24 hours to get out of the contract, and there are longer times on Condos, and Timeshares. 

Basically an offer is a contract. Of course I have to put down an EMD, however, it gives me a way out if I don't like what is found. I have had banks to give me two weeks to have them done, and I have had banks to give me three days. If they do not allow it, I move on. I do not buy homes at auctions. I only buy REO.

The only way I would consider investing with a group of investors is to be a guaranteed amount of money in, and a guaranteed amount of money out within a certain time frame.  I am not a person on "maybe or could be", when it comes to money.  I work hard for my money, and I had rather do flips myself.  The only variable would be is that I get a contractor to give wholesale labor to me and negotiate a split of the profit on the property when it is sold.  And @Derrick Jordan I eyeball and walk every property before I would even consider making an offer.  My offers always include a termite and home inspection at my expense to be performed, and have them completed before placing a contract on the property.   Matter of fact I am driving 150 miles tomorrow to view a property I may be interested in. 

I have never ran a BHPH lot, however, I do know someone that does.   It is like any other business.  Business is Business.  The Profit and Loss sheet, along with tax returns tells the story, even if you have to go back a couple of years.  You don't have to run the lot yourself, it will be easy to find someone that can.  I would suggest a tow truck operator to do so.  Now from what I know, get the cost that you paid for a vehicle if you are selling it to a high risk customer.   You have to base the risk on every customer on their credit rating, length of time at the same job and residence.    Now take this with a grain of salt, because I am just giving you my opinion.    Many people have bought franchises that could not operate them if their life depended on it, and have done well with them.   I am sure the only reason the cars are on the lot is to show you that he does have inventory.  (Otherwise known is curb appeal to a prospected buyer). 

 Well I am glad to see that someone here thinks out of the box.  Timeshares can be a decent investment if they are used correctly.   You use real estate to make a profit, or a deduction,  no matter what kind it is.   The reason people want to sell them is because they cannot see the potential .  Not all real estate is a good investment, however, the correct person can turn most of it into a successful investment.  Hint: If you are a real estate agent and want to sell a difficult high end property for a decent amount of money, that timeshare you own, make the deal that you will give  a weeks vacation there if they buy the home you are trying to sell.  There are thousands of ways you can make money on real estate.  

Three words to tell you all in Baltimore.  INVEST, INVEST, INVEST, just make sure you can get insurance on your properties!!!

Housing prices only increase during a time when interest rates are reasonable.  A zero to .25 percent discount rate by the Federal Reserve is not reasonable.   This hurts the price of housing, and the working people as well.  What this rate is doing is favoring a small group of people and banks.   This causes a lopsided economy in which small banks have a difficult time to operate in and small businesses find it difficult to compete.   This also increases stock values, for the sole reason that people invest money in their 401K and like accounts, and in the stock market to drive stocks above their worth.  Your 401K can be worth millions of dollars on paper, however, until you have made use of it, it has created nothing.   A four percent discount rate will drive the economy, drive up home prices, and believe it or not, more working class people will be able and will want to buy homes.  Real estate is the driving force behind the US economy.  I have made a post earlier today on how a reasonable interest rate helps, rather than hurts the economy.  Gold prices will come and go in any market condition.   How I feel about gold is this:  I cannot buy any amount of gold that I can grow food on, or produce an income from.  However, I can buy a property, and use it to provide income in any market.   I have properties now that create more money within a single month than an ounce of gold is worth. 

I am someone that have flipped several homes in my life, and now I can see where it is time the raise the interest rate at the Fed's Discount window.

By doing this will increase home values, and cause more homes to be sold. Now at this time I can hear all of you fuming – Why does this idiot think this way? The reason is because when I bought my first home it was at a 13.5 percent interest rate. After owning the $52,000 home for 3 years I sold it for a profit, and received a $2000 profit. Someone assumed the loan for the home, and today that home is valued at $220,000. Did low interest rates boost the cost of the home? No, the home increased in value for the opposite reason. Actually the home is decreasing in value now, because of low interest rates. It is simple. The community the home set in (even though an historic area), improved. People bought the surrounding homes using creative financing, and loans from the city etc... to fix up the homes. Even with that being said the low interest loans were no less than 4%.

Now by raising the Fed's discount rate, will create a surge in real estate sales. Working people will have more money, and will upgrade their housing.

• I am really hearing how much of an idiot I am now. Yes, I know I am a stupid prick, only concerned about myself? I can hear, “listen you prick, how can this help a first time home buyer with a low income buy a home?”

First of all I am the opposite. I fully support first time home buyers, and think they should have an advantage in the market. Raising interest rates does a couple of things:

First thing you will see is salaries will rise. Now for all of you real estate agents out there, do you really think people will stop buying homes? No, what will happen? A lot of the population in the country will put a “For Sale” sign in their front yard. The reason is simple, the smart people refinanced their homes to for a low interest rate? Now you have $200,000 or above homes setting for sale, at a 3 to 5 percent interest rate. Total payment of home is around $1200 to $1400 a month.

Now you have someone looking for a home, they will be looking for an assumable mortgage, seeing how being able to buy a home with a low interest mortgage is the prize. They will have sums of money to to put down, rather than a few thousand. This alone drives up the cost of real estate.

Now many of you are going to say “people ain't got no money”. Listen Real Estate agents you will be making bundles, and all this will do is to drive the economy upward, and this means higher wages for everyone.

Now the question "Where are the bundles of money going to come from?" Simple, people have thousands of dollars setting in their savings accounts, money market accounts etc... that are producing close to a zero percent interest rate. Why? Because that money is secured and is FDIC insured.

Now think about this, that first home I had now has a 3.5 percent interest rate on it. The total payment is $1350 per month. The owner may wait for a day or 2 to put it up for sale, but within 90 days I would be willing to bet that same home will sell for $260,000 to $280,000. The owner of the home will most likely take the profit from that home and put down a deposit on a more expensive home, assuming the loan. Now I am going to hear the following – Well the owner has only made $20,000 in profit on the home? How can he do this?

This is a situation maybe most of you real estate agents do not understand. When interest rates increase, what happens to retirement accounts? The interest on this money falls like a rock, that is what happens. Many people have money setting in 401 accounts etc... that are making money hand over fist, sorry to say not many real estate agents do. Now when you could borrow your own money without any penalty at a 5% interest rate, that you are paying yourself, and you could afford to do so, the question is easy, should you? Now the $20,000 comes into play. Remember the discount rate? Now that $20,000 could be easily invested, rather in CD's from banks etc... to cover the interest on that 401K loan. This also gives padding to someone that gets that higher interest rate, or taking over a mortgage, using the 401K loan.

  Basically the buyer can buy a much more expensive home, and make the money back on the rear end.

Now there are many reasons to raise the Fed's Discount rate than what I have mentioned above. Now I expect a lot of feedback from this “Calling me names” etc... However, I survived and bought homes in a high interest rate environment, and prospered from it. Sorry to say, it difficult to do it today, without a lot of effort and risk to do so. I am waiting on your comments. Small business drives the US economy not major corporations.  

Joel you failed to address the second option I have been looking at for awhile now. After I buy the building, and start the renovation on it, I am sure (I know) that this will set the city in motion to do the upgrades in their master city plan. Maybe I am just afraid after seeing millionaires being turned into paupers after the last housing collapse.  I am worried that this will happen in commercial real estate, by me seeing what I am seeing. 

 Joel, let me explain what I am looking at here.  First of all the interstate traffic flow is no less than 50,000 cars a day (much more likely 100,000 or more).  Both directions have about the same amount of traffic flow.   Maybe much more seeing how the destination is to the Outer Banks of NC in the summer.   

One way off the interstate is mainly to a high retail area that is about 4 miles away.  That way is mainly industrial and there are a Wendy's, Hardees, and McDonalds.  No GAS that way until further down - a lot further down.  The place I am looking at is about 3/4 acre.   The building that is setting on the property was last used is some kind of computer data entry center.   The building is 1,400 sqft, and brick, really decent looking.   A gas station and conveint store basically share the intersection it sets beside.  (Other words basically 2 gas stations, one sells diesel, the other does not.  A Private church learning center sets beside this property, and a funeral home sets across the street from it. (They looked into buy it, however, were too concerned about the tanks in the ground).  I know my options with the tanks.   Further down is residential that is in another city.  Like I stated before, I know the property will reap a profit today, but I am not sure how long it will be before it becomes something really worth owning or not.  This is just one option, that is very, very cheap.

Second option, building that is about 9,000 sqft that sits on a major thoroughfare, close to the water.  No flood insurance required.  This building has been vacant for 7 years, and belongs to a family trust.  It is Cement Block Constructed and was used is light industrial.  This building sets beside, and is in one of the better residential areas in the City.  The problem is renovation.  The cost to acquire it is almost too low for anyone to believe.  The problem is renovation.   The land is worth the cost - not the building.  You know these traps, cost more to tear the building down, than what the land is worth.  The building I know can be renovated for less than $100,000 to meet the cities future planning project, that was delayed due to the real estate disaster, however, when this does happen or ever happens the building will be prime real estate.  These are my dilemmas, I don't see anyone else jumping on these properties, even though they seem to me to be very good investments. Again, is it a good time to invest in commercial properties?