All Forum Posts by: Rich Urban

First off..good job for taking action..I'm in Florida on the other coast. My father lives right by Macdill though..:)

Your area is good for wholesale deals. Forget about being a "Bird Dog"..that's pathetic. You're going to get paid nothing..and as far as those guys that need cash back..forget them..it sounds like they want the best of everything and if you so happen to find it they MIGHT TAKE DOWN THE DEAL...they're not serious.

There's a few things that you can do to grab some deals right away:

1. Knock on owners of foreclosures
2. Put bandit signs everywhere
3. Drive for junk properties in lower end neighborhoods

Quit going all over the place and focus on one or two things. Put a system in place and you will be successful. You have the same energy that I had when I started.

Feel free to ask questions!

Richie

Oh ya..you might want to check for Home Owner's Association leins...depending on the HOA and your location, I'm seeing them get paid out down here in South Florida if the winning bid doesn't cover them.

Anyone else have to pay the HOA?

That's a great idea to visit a Sheriff's sale as a practice run to learn.

You must be very careful when purchasing at a Sheriff's Sale for the first time. They're total - "caveat emptor", which means "buyer beware". You get what you get, and you don't get upset..:)

If you don't do your research fully, you could get stuck with a real piece of crap deal. In most areas, if you find out that it's a dud, and you want to back out, you'll forfeit a substantial amount of money & never be able to bid again.

Sheriff's Sales are not for the inexperienced (or the cash poor). They usually expect ten-percent (10%) of the accepted final bid on the spot, with the remaining balance due within 30-45 days. No excuses will be accepted & if you're just playing around, you'll lose your deposit.

When I'm going to a sheriff's sale I pull the comps - DRIVE THE COMPS (literally go out to the houses that I found were comparable) and visit the property in question. Now..I also slide in the back window to inspect the inside of the house. Some people say that it's nuts, but it's a risk that I'm willing to take when my $$ is on the line..:)

I would look at the Clerk's Office and see if there are any Federal Tax Leins against the property, as these are not wiped clean from a Sheriff's sale. I know a guy who found that out the hard way..:) If you want to see if your clerks office is online, PM me (I don't think you're allowed to post links on here).

Other than that...Make sure that you have a ton of business cards made up. Network with everyone there. Get names and email of everyone there and enter them into your buyer's database.

Have fun,

Rich

Well, I believe that most Realtors have an absolutely different mentality from real estate investors...yes, there are the "2 percenter" exceptions...but for the most part, they gravitate towards that commission.

I've tried reprogramming many of them. I've been successful on quite a few..others..not so much..:)

Hey...if they want to play bird dog and bring you whopper deals, that's cool. It's similar to an Employee / Boss Relationship. There are many jobs where an individual works for a company for years to take a pay check but could make much more money if they want out on their own..but they don't. Why? Stupidity? No...I think they're just programmed to be "worker bees". Real Estate investors are hard core entrepeneurs.

As far as my feelings on working with Realtors..Don’t Let Them Waste Your Time!! When you're dealing with a Realtor, 9 times out of 10 they're going to show you nice houses, owned by people that are in no urgent rush to sell. I hardly ever deal with Realtors. I'm not saying to completely alienate yourself from them. That would be foolish. Simply network with them, and let them know that if a killer deal comes along, you can close with cash quickly.

Explain what you're looking for and that's when they will call you. I wouldn't go around looking at houses with them. Most Realtors are not trained to look for the types of deals that we're looking for. Actually, they'll probably tell you that it's NOT POSSIBLE to find the kinds of deals that we do.

Rich

A preforeclosure is a deal where you're buying the property from an individual who is in the early stages of the foreclosure process.

I prefer doing the preforeclosures for two reasons:
1. You're helping someone get cash before losing the house to the bank.
2. They're an easy, readily available source of deals.

You can find them by looking in your clerks office under: "Lis Pendens" & "Final Judgments". The Final Judgments are the best because that's last stage, making the homeowner much more motivated.

As far as "Finding A Mentor", Primo Coach has given really good advice above. Be careful when you choose someone. Make sure that they're not "Too Hungry" to mentor you. I speak from personal experience..it sucks to get ripped off for like $20 grand when you're just starting out.

I'd say continue going to Law School. Not for the income, but for the joy of learning...if that's something that you enjoy.

If you're going to school for a J - O - B...well, don't bother.
A Real Estate Investor usually makes more than an attorney with less time and energy involved.

Rich

Good point Lou...This is where knowing your farm area is CRITICAL! Once you know what things are selling for, finding the ARV is pretty simple.

If you're looking for a free service, you can try Zillow. I wouldn't go by their "Zestimate", it's crap. However, you can click the option that says "View Comparable Properties" and see what has sold recently.

Remember - As close in distance, # of bedrooms and in this market..AS RECENT AS POSSIBLE!

Best of luck,

Rich

Jewin,

I'm in South Florida as well. I live in Jensen Beach & my main market is the Treasure Coast, Palm Beach, Broward.

The deals ARE ABSOLUTELY OUT HERE BETTER THAN EVER! It's become a little more difficult to wholesale, but we're still doing a few of them a month.

Now is a great time to get a good rental portfolio going. You can take over mortgage subject to even and rent them out.

Before we were having difficulty finding houses that would cash flow nicely, NOW YOU CAN LOOK IN THE MLS AND FIND CASH FLOWING PROPERTIES...I'm not sure what you mean about the rent being too cheap? It's cheaper to buy a house in S. Florida right now if you know where to look. What area are you in that rents are too cheap??

Go Grab Some Deals Before I Steal Them From You..:]

Rich

Well..With a private lender, you're going to have quite a bit of flexibility. Everything is negotiable here...If you want him to partner up with you, he can put up the money, you manage the deal..split it 50/50.

If you want him to act as a hard money lender typically a HML will lend up to 70% ARV (after repaired value). This means that a hard money lender can loan you up to 70% of what the home is worth in repaired condition.

So if you find a home worth $45,000 in the condition it's in, and needs $20,000 in repair work, and after it is repaired the current fair market value is worth $100,000, then typically they can lend you up to $70,000, which would cover the cost of the house and the repairs.

Because he's a private guy, you can expect a little higher interest rates. Interest rates vary from 12% - 20% (I'd try to stay closer to the 10 - 12% area if possible). I wouldn't use hard money for more than 4 months.
Typically hard money lenders will charge anywhere from 2-10 points just to use their money.

(One point equals one percent of the mortgage amount. So charging 1 point on a $100,000 loan would be $1000.)

Other things to consider are how quickly funds will be available. You need to make sure that this guy can act fast. I've seen some B.S'ers in my day that talk a good talk, but when it comes time to cutting a check, they want to ANALYZE EVER ASPECT OF THE DEAL and kill it.

Best of luck,

Rich

Ps - Avoid pre-payment penalties.

You've had success with that line? When I started out investing in real estate, that was the line that I used and my conversion rate was crappy because of it. It doesn't really get to the point of why you're there at that particular house. Most sellers that are in denial would say "Not that I know of" and then you have to explain why you're there so you end up looking like a phony or a fake right off the bat and a first impression is the most important one.

If I were starting out door knocking, I'd stick with: "I noticed that you were experiencing a challenge with the bank. Have you been able to get it taken care of?"

Of course, that's just my humble opinion...:)