All Forum Posts by: Anthony E Russell

Don,

Great advice. The scenario you outlined is exactly how Sam Walton and his brother got screwed out of their first pre-Walmart store.

They spent considerable time building up a very profitable business only to have the landlord not renew the lease and hand over a lucrative site to his son who opened what type of business? Take a wild guess.

Will,

I agree with your contention of not writing a bunch of offers. I prefer to ferret out the deals that make sense and call my investors when the numbers add up.

I have relationships with two brokers, so far, who give me access to their list weeks before the properties are scheduled for MLS. However, I find that they still have to "list" the properties -- per their bank directives -- even though I have a list of people who are able to take down the deals, immediately.

With that being said, how many brokers did you build relationships with before their trust in you compelled them to "work" your offers above everyone else?

Brian,

Pray tell -- where are these dumb bunny bankers handing out REO deals?;-)

$150,000 is close to 50% ARV. Are investors typically paying around this or the home wasnt $315K to begin with? Just curious.



I bird dog for an investor who buys primarily on the South side of Los Angeles. All his deals are 50% ARV or close to it.

Matt,

I couldn't agree with you more. I'm looking at a couple of different commercial areas and will put a business plan together, soon.

I find a lot of the listing agents to be morons -- particularly in dual rep situations in SoCal. The agents talk to you like you're a crack head for not wanting to pay retail on a property that obviously needs substantial repairs or is in an area that compels you to impute certain risk ratios.

Using the standard 70% - repairs out here will, in most cases, put you below a bank's asking price by more than $40,000 - $50,000. Listing agents think you're nuts for even thinking about making such an offer.

And while we're talking about listing agents...I sometimes wonder about the wisdom of making offers through them because of the "best and highest"/ "multiple offers" b.s. they spew. Peter Giardini rants about that, today, on his podcast.

A couple of days ago, the assistant of a broker called me with a property -- newly fallen from escrow -- that according to my comps ARVs at $315,000. A purchase price of $150,000 should be in order, here. The assistant tells me that it went into escrow at $254,000 -- I told him not with an investor attached. He concurred that the offer was from a retail buyer -- who couldn't perform, obviously.

The assistant then informs me that the lender -- Aurora Services of CO -- wants offers that are in the same ballpark as the backups that were on the table from investors -- in December! When I tell him that December was a different market he responds that according to his comps -- which include pending sales, by the way -- those December backup offers of $220,000 and higher would suffice. Wow. There is never a dull moment in this business.

I agree with both Will and Matt. Get the properties before listing -- which is happening -- even though banks want you paying retail or find motivated sellers before the bank even enters the picture which is best, in my opinion.

As an aside, I believe the Obama administration not forcing banks to mark their REOs to market, while allowing them to hoard cash that should have been put to use through investors, has created an environment whereby the housing crisis in this country will take years to sort out. Just a thought.

Ted,

You're right about not having an out, with hard money considered. However, Bryan's suggestion should mitigate that problem, well enough.

Thank you both.;-)

Justin and Ted,

Thank you, both. Much appreciated.

Fellow BPer's,

I apologize in advance if this question has already been addressed elsewhere in the forum but I have a burning question...

What is the relevance of agents knowing whether you're financing a REO with cash or hard money?

Thanks.

Earl,

Welcome to BP.