All Forum Posts by: Demetrius Bradley

A-B-C from the first moment you put down that earnest money

Buy a very large white dry erase board with red & black markers

Make sure you have all permits require

If your contractor or whoever is late for anything, fire him no exceptions. You must stress to yourself first then to everyone else that time matters in this business.

Have a solid game plan, and take charge of the project. This property is your business now and you must be able to multi task

Try to use a cookie cutter approach to all your rehabs, at least at first,

Don't be cheap,but,.... be cheap, meaning remember you bought the house at wholesale price and thats how you should buy material and labor.

Don't pay someone to do what you could and should be doing yourself. Learn as much as possible. Also we use a weapon that I don't see too many investors using.....Interns! Seriously call all the trade schools in your area and let them know you have projects that their students can get hours on and they will be there. Just feed them and hook them up with some gas money and they are happy. We use them to do all our general labor and landscaping.

Try to get banks, suppliers, and different community organizers to sponsor your project not finance it. I'm going to be explaining this more when I get back from vacation.

@ Matt , I can't argue with any of that, very good question on how should Realtors should get paid, because once they provide their service they should get paid no matter what happens in the end.

Carla Carla Carla

Im not a real estate agent! You are, and it was East Cleveland, Youngstown, and southern Ohio that got hit and over half were from a refi scam that AMERIQUEST was running, nothing to do with buying and selling. And oh a lot of people went to jail. get it straight. But Arizona is number 2 on the list of highest foreclosures as of today right behind Las Vegas enough said!

Ummm that's kind of what I said you weren't a agent so you don't know, and you still don't you are not a listing agent, you are a buyer agent aka take offer, fax bank offer, tell buyer yay or nay. in which there is nothing wrong with that but stop acting like you do so much for your clients, how many times have you got the decision maker at the bank on the phone and went to bat for your client? How many times have you went and met the BPO at the property and got in his ear to make sure it was priced right? How often do you sit down with your clients and go over every detail about the property, like you would if you were investing in it....answer- never

ummm wrong again, I own and live in the house my parents gave to me no agents involved accept the title agent who prepared the quit claim.and I only use realtors when they have pre approved short sales deals, again i buy-fix-rent because I don't ever plan on working for someone again.

I'm glad to hear that you understand it's just a opinion, I wanted to know why is this so personal for you, then I saw what other people were saying about your profession and it made sense.

sarcasm quote

You are a Realtor and you sale REO's those are wholesales just ask the bank who is supplying the listing, and surely you don't seek out distress buyers to make a profit??? -sarcasm quote

ok you got me I took a jab because you were swinging so hard!

Im sorry what's implied? It's not a law that I have to give a detail summary of my plans, as long as everyone part of the deal knows im a NOO investor seeking to make a profit off the deal and no promises were made upfront to close the deal then I stayed within the law A homeowner is allow to stay in the home throughout the closing, and there is no set time they have to leave. But you know I'm right,

@ Matt, not saying all Realtors are unethical, just saying some pick and choose what details to disclosed to make a sale, and when you are buying something that has that much long term financial commitment and you are paying a professional to assist you in the sale or purchase, all details no matter how big or small should be clearly stated. True people should know more about what's going on before they signed their life away, but if they knew everything the professional knew "Why should anyone use a Realtor" I would agreed with most of what you had to say though, and I think the Glass-Steagall Act should and hopefully be reinstall.

Now this is not the case for all Realtors but,

I also believe there is a huge conflict in interest when real estate company X is the seller listing agent and the same company X can also be the buyer agent as long as it not the same agent handling both sides. The company number 1 goal is to make money so whose interest do they have on the deal? They should be separated if your company list, they can't rep buyers. Again J.Scott buying a house is not the same as buying baseball cards... so please keep up, I'm going to be going through this lesson pretty fast-

And Economics J Scott, explains why markets fail
Information asymmetries arise where one party has more or better information than the other. The existence of information asymmetry gives rise to problems such as moral hazard, and adverse selection, studied in contract theory. The economics of information has relevance in many fields, including finance, insurance, contract law, and decision-making under risk and uncertainty.
Incomplete markets is a term used for a situation where buyers and sellers do not know enough about each other's positions to price goods and services properly. Based on George Akerlof's Market for Lemons article, the paradigm example is of a dodgy second hand car market. Customers without the possibility to know for certain whether they are buying a "lemon" will push the average price down below what a good quality second hand car would be. In this way, prices may not reflect true values.

(just the opposite happen in George Akerlof's Market for Lemons in the real estate market)

And what Freakonomics takes into account is, for example if you needed $40,000 of your own money down on a $200,000 house, how many people could buy that home?
Now let's put in a economic intervention and now for that same house at the same price you only need $6000.00 or zero down, now how many people can buy that home? That's why it was a false market and not a free one and why it fail.

Actually Levitt said, "Sometimes a particular set of incentives is so irresistible that people are driven to attain them through unscrupulous behavior" 7% listing fee on a $300k sale is a great incentive, especially when you are working on commission only and it's your only source of income, and getting 3-5% on the buyer side is not too bad either. And knowing how to get a buyer into a more expensive house is a great sales weapon. You might of seen a trend where Realtors are teaming up with Loan officers who push FHA and use to push subprime crap.

And J Scott is spinning Freakonomics to help his silly argument. This is what the Authors discover :
**********The author also explores the real estate industry and the behavior of real estate agents. By reviewing data about real estate agents typical practices when they are selling their own houses, the author found that they may not always have their clients’ best interests at heart.******

Exactly what I have been saying, but you guys are saying it's because you sale your house for more money then your clients, but once again you are not explaining to the people why.

The why you go lower (which is still base on false numbers) is because you know you only have a short amount of time normally under 180 days to close the deal, and most homeowners want results now and will not wait that long, normally at 60-90 days they are ready to jump ship. and normally that's the time when you start to see the price start to free fall.

Freakonomics also talks about

**** how individuals, organizations, and businesses often exploit their access to information at the expense of others. Entire industries have attained great success and many significant historical events have transpired as the result of an imbalance in the flow of information.*****

Could not say it better, when you apply this to Realtors , they don't give you all the details that may or may not impact your decision on that purchase because that could be the difference of making or breaking a sale.

And I have to use J.Scott out of touch argument that a Realtor commission, and seller incentives are part of the value of a home??? What! If a buyer knew they were paying a additional $20k-$50k on a house just to cover a fee which is not theirs and a incentive they didn't get, they would not agree to pay it. Well maybe J.Scott because he also seems to think buying a house is like buying gas, because he doesn't understand why gas prices go up and down, supply and demand plays a very small part compared to market speculation

BTW market speculation goes right back to Freakonomics how individuals, organizations, and businesses often exploit their access to information at the expense of others.

Again J, if gas rose to $20 a gallon and fell to 20 cents a gallon the next day, you would not have to pay on the $20 for the next 30 years.

Again you don't get it because you don't understand it.

@ Matt I don't mean to paint every realtor with the same brush I know there are a lot of excellent ones, but it gets me when I hear agents say "it's the homeowners fault we were just standing next to them getting paid very well advising and they chose to listen" but you gave a perfect example if someone bought a home today for $250k and 36 months later it's worth $500k. And most agents never asked how is that possible? The problem with that is the guy who sold for $500k and made $250k didn't move back home with mom, he went and bought a more expensive home thinking he could do no wrong because he doesn't know about real estate and his buyer agent didn't explained to him about inflated prices so 18 months later his home is being sold at the court house and his story starts to repeat itself a million times Supply demand, nope cities where giving out building permits like water, if you could build a new home at the same price as a existing one why not? I would say that new homes probably was where the highest demand was. But if buyer agents could of advised their buyers that this is a inflated market, something like, " if you must have this home don't offer more then x of what it sold for 24 hours ago" LOL im just saying. Not too many agents told their clients this is a inflated market and inflated markets are false markets and this is going to crash a lot sooner then later if you don't have to move don't and if you do, buy low and buy somewhere you plan to be for the next 10-15 years, Buyers do tend to listen before making a major purchase,

But I do blame the banks that were giving out FHA loans, the thing is a lot of people pay their mortgage every month and a lot of them did get screwed so.....

Yes that's exactly what you should do, PRE-QUALIFY all sales people do it. If I go to a new BMW car lot looking for a 2010 model, what is the first question that is ask, how is your credit, what do you do for a living, do you own or rent, do you have a trade in, how big is your family ect. If I said I work at the burger joint down the street and i make $10 a hour and my credit isn't all that hot. The salesman would kindly guide me to a cheap used lot somewhere else.

J.scott you are way off now, if you bought something of value for $300k and it lost 60% of value basically over night , you are saying you would go right back to the person who sold you and buy hundred times more? And I need a course in economics?

Good thing I have had many courses in economics so let's talk about the free market....

You do realize that there is a major difference between a free market and a false one right? if not keep up.

within the ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other property rights without the use of physical force, threat of physical force, or fraud, nor are they COERCED BY A THIRD PARTY! (in this example let's just say the 3rd party is the realtors) and they engage in trade simply because they both consent and believe that what they are getting is worth more than or as much as what they give up. Price is the result of buying and selling decisions as described by the theory of supply and demand.

Still with me? Let's break this down
First ,buyers and sellers enter into a agreement without being coerced! you must really have no clue on what listing agents do, do you think they tell sellers to list at whatever price they want other then REO"S? If the seller wants to list too low, the agent pulls out figures to talk them into asking for a higher price, tells them things they can do to the home to sell fast at the higher price, and oh don't forget to add their fees to that asking price and if they want to list way high the realtor tells them the home will sit on the market for a long time and probably not sale, well sale in the time frame that would allow the agent to collect a commission ....but but but wait this is a free market and in a free market 3rd parties can't coerce a seller right? And by the threat that the seller would lose money somehow if they don't raise or lower the price is what???

Still with me? SECOND, A free market is a market without economic intervention and regulation by government!!!!!!!!!!!!!!!!!

OH OH J.SCOTT, WHAT DO YOU CALL A FHA LOAN? The most common use loan in this country. I know this was easy when we were talking about baseball cards but lets continue,

The FHA loan alone would kill any argument you can pretend to have about the real estate market being a free market!

It's a false market which like all false markets they crash and here's one perfect real time example

Let's say the Listing agent list the home at a fair price of $200k. And the buyer comes along with his FHA loan in hand, and with that loan the seller is allowed to contribute 6% toward closing cost. Follow me,

Does the seller pull that $12,000 out of their pocket or do they raise the asking price on the home and refund the difference? Oh same question about HELOC, Take your time................................................

I assume you know the answer so let's say the listing agent is getting a flat 5% fee, is that $10,000 paid upfront by the seller or is it included in the price?

So after the closing is that home recorded as selling for $190,000 or $212,000?

Let's say, to save time it's a fact $212,000. and let's say that happens 10-50 times in one area, will the comps say the average sale price is $212,000 or $190,000? Answer $212,000. Now here's my point I have been making with the over pricing, by that example alone which happens everyday on millions of homes the listing agent just inflated the market, how? They DIDN'T EXPLAIN TO THE SELLER OR THE BUYER WHY THE SIMILAR HOMES SOLD FOR WHAT THEY DID, WHAT WENT INTO THOSE NUMBERS AND ADVISE WHAT THE TRUE VALUE IS FOR THAT HOME, YOUR COMMISSION AND SELLER CONTRIBUTION AND HELOC HAS NOTHING TO DO WITH THE VALUE OF THAT HOUSE. AND OH IF YOU DIDN'T KNOW MOST BANKS USE TO ONLY DO DRIVE BY APPRAISALS WHICH MEANT WHATEVER IT WAS LISTED FOR IS WHAT IT APPRAISED FOR!

So now homes that were selling for $190,000 are being listed at $212,000, because of what the comps say, the the same process happens again now $212,000 turns into 253,956 and so on. And it only balances out when the the area is now too expensive to buy in, or when conventional loans start to out number the FHA loans in that area AND people start to default on loans they should of never had and the banks lose tons of money so the banks stop giving out free money, which means most people can't buy the over price homes, so the prices start to fall like rain, and poor Fred who has lived in his home for 20 years almost has it paid off and did everything right except for the REFI he did (you know when he was told his home had rose by $100k in value) during the madness is now F%$#K!!!! And everyone who bought now owes way more then the home is worth, (you know when home prices drop so does the appraisals)

And throw in the fact banks lost all their money on over price homes now have no money to lend so businesses can't get loans which means people lose jobs.

I forgot J.SCOTT what's a free market again? Because it sounds like a whole lot of economic interventions, and a hell of lot of 3rd parties in the middle between the seller and buyer!

IF IM WRONG PROVE IT, WE CAN DO ECONOMICS ALL DAY. JUST BECAUSE IT'S SUPPOSE TO BE A FREE MARKET DOESN'T MEAN IT IS.

IT'S ALL PUBLIC RECORD GO RUN YOUR OWN AUDIT!!!!

This is why you don't get it, you don't understand it. Please tell me the name of one agent, either listing or buyer that has ever told their client why a similar home sold at a higher price or lower price other then "well I ran some comps and watch a show on HGTV" Can't make a smart choice if you don't know all the details, it's like betting on a horse you never seen race before because some expert said it's a sure thing. But maybe I should stop bashing (which im not bashing) Realtors because I have never been to Real estate school so I don't know what they are taught to do. But I did work at a title agency like I said before which taught me how to follow and audit the real numbers and how to invest in real estate and the one lesson I never forgot was -watch the entire movie, not just the trailer, then you don't have to guess the ending!

And supply & demand??? are you serious? I'm sorry I missed the day when this country or a certain city ran out of houses, maybe apartments, but never houses.

One last thing J.Scott, if you buy a stock and it flops, you don't have to keep paying on that stock for 30 years, not sure how you see the two as the same thing and when you say something was dictated by the market

it was dictated by a false market, which is why it failed. Economics or History should of taught you that on day 2

@ Carla

Nice try Carla maybe you should read my earlier post and you would know I don't violate any bank terms or laws. Here let me give you a copy of it..............

You're right, hold on let me tell you how great you are! You seem to be taking this very personal considering you weren't even a agent when all the crap was going down? And now you work with REO's? So you have nothing to do with going into neighborhoods sitting down with homeowners and earning their trust to get their listings, and you had nothing to do with listings back in 01 02 03 04 05! I also see that you are on a different post where the people there are REALLY taking it to real estate agents a lot harder then I am and you are there trying to defend your fellow agents again there. So I guess I'm not the only investor who sees realtors in a bad light.

Get with it! You said you do rehabs, and Realtors are like Gods as you would have one to think, so question, do you pay 100% or more of the asking price for the properties you are working on, because if that property is listed with a realtor that price must be fair and correct RIGHT?

and I was not bragging about anything I was answering your out of touch remark about me seeking out and making a profit off distress homeowners. I was also explaining what you can do and how fast you can do it as a investor or what any buyer or seller can do without a Realtor. Now once I get to the point where I'm the bank financing every buyer on every property I sell then you might hear some bragging.

And im one of those few who believe Fannie Mae, Freddie Mac should be shut down, and only people with a stable job, decent credit, and 15-20% down or all cash should be allowed to buy homes. Oh and just was wondering you talk about credibility when you are a Realtor in one of the nation's highest foreclosure states why would anyone in their right mind take real estate advice from you or any Realtor in one of those states???? Remember it was your people giving expert advice and telling buyers "this is a wonderful deal" Let's asked some homeowners how that good deal is going! It's not my credibility in question, it's yours. I buy- fix- rent, or wholesale to other investors who know what they are doing when it comes to real estate, yes that's creditable. You were smart to start investing down there you have a endless supply of good deals, and by now after being a investor you should know Realtors are not needed. You also have a horrible governor (but that topic is for another place)

@J Scott you're right, bad product was the wrong way to say it.

But as for the closings their really isn't much you can do, you can't give legal or any other advice all you can do is make sure they understand what they are signing. Now you can give red flags to the bank if the deal looks shady but back then the banks did not care so why should anyone feel sorry for them now because they are losing money on the loans they were warned about.
There were many times when I would asked the buyer 15 20 times do they understand what they are getting into, so much the Realtor would get pissed off! Or I would make little comments like "wow you must really love THIS home" or "do you need more time to think about this, I'm here all day" it would drive their agents crazy!

Yes if the price drop that much 2-3 years later! What would you be saying if you paid $300k for that card and it drop 60% in value 2 years later? Would you go back to that guy who sold you on it and buy again from him or tell all your friends to buy from him????

J, the point you are missing is most people weren't out trying to buy homes like they were some sort of risky stocks.

Sorry Brian for the mis spelling of your name, kind of was typing fast while watching the Cavs

@ Brain, what you can't do is turn around and resale the property back to the homeowner. Also you can't do deals for family, friends, co-workers, or anyone you have a relationship with and you can't make deals or guarantees with the homeowner before the sale. For the short sales I have done so far, first they have all been pre- approved by the bank before I even touch the deals, which means I had nothing to do with the seller or the process in getting it approved. Next I have a contractor or myself if local go look at the property before I close on the deal, and most times the first question a homeowner wants to know is how long do they have before they have to move out, and our answer is "you have time, if we buy the home you will be notify of your options after the closing" , (nothing is being work out or guaranteed by this) my first question for them is did the bank agreed to waive any balance left after the short sale, if not i advised them you can be held liable for that amount. I also advised them that they can be tax for that amount as a forgiven debt. so lets say everything pans out , and I close the deal, I put in EVERY contract and ALL offers that I'm a NOO real estate investor and my sole purpose for doing this transaction is to make a profit. That way no one can come back at me and say they didn't know who, or why I bought the property. CYA! Once I purchase the home and have clear title I can do whatever I want with the home and rent or lease it to whoever I choose. After the close I mail a certified letter to the property and advise the now tenants of their options, 1) 30 days to vacate 2) lease option call for details 3) must choose option 1 if you received any government funds to move.

And I had this process approved by Lerner, Sampson & Rothfuss, and if you don't know who they are, they are the bank's law firm that if they show up at your house with their notices, your issue has just become a subscription!!! and I also got the updated short sale process & rules matrix from my old job at First American Title.

So it's no way unethical because I don't know or have any relationship with the homeowner

I only do pre-approve short sales to avoid all the red tape and games

I'm not flipping the home to anyone! again CYA

And I only offer rental / lease options on the property after I legally own it with a free and clear title.

I even take it a step further, I won't do the deal unless the bank has waived any balance on the home, the homeowner knows about the tax liability, and the home owner clearly understands that im a investor and my sole purpose is to make a profit, of which they are not entitle to any of that profit now or at a later date. That way if the homeowner decides to stay they can't come back on me when they get that huge bill and say they never knew and that somehow they were force into something or be allow to use the equity to pay off whatever they owed. I avoid any future problems- CYA

@J Scott yes I am friends with a lot of people in this industry including realtors, and yes we have the same arguments that me and you have been having, and yes a lot of realtors in this country did mislead their clients and made a lot of money doing it and that's why I say you should not trust them or use them period unless they are independent, those are the ones who tend to really work for you. And at the time there was no laws against what they were clearly doing, I think Florida is the only state that I know of that holds realtors responsible. I don't hate them or wish bad on them I wish they would acknowledge their role in this......the I sold you a bad over price product but im not responsible for the bad product I sold you because I was just the expert getting paid 1000's of your dollars to sale that bad product to you is just WOW! And again its just my opinion. i run my business different, it's a trust thing with me.

Jeff Tumbarello, no not bitter, I waited till the bubble pop then started cleaning up, yes Mike started the company, made a couple of nice commercial deals, got married have some kids cashed out and now he's in the financial business lol he still does a deal here and there ....I do blame realtors but I can go all day on ******* bankers!

Aww J scott, the difference is 20 30 years ago Realtors play a very small part in selling homes, Why, people only bought one house and because back then people bought homes to live in, to raise their families in, to retire in, not as ATM's. Back in the day realtors and most people in general that were conducting business value a mutual trust, they believed in repeat business, not screw you I can get more clients. The realtors who service a neighborhood actually lived in that neighborhood.
what has change is now these new realtors (the last 10 yrs) think they are stock brokers on wall street. Firms pressure if not require their agents to all be million dollar club agents, and whenever you are only working on 100% commission with no other income, not all but most will do anything for a sale or try to make a extra $500 by misleading especially if they are new or need to hit some sales goal.

And last I checked 10% of realtors do 90% of the business, again I was title agent for many years in a major market and always saw the same realtors over and over again and to this day im good friends with most of them and we have this argument all the timeand some agree with me and some don't but it's just my look on it.