All Forum Posts by: Ryan Wilkinson

Motivation stems from one simple question..."WHY?"

You have to know why you are doing what you are doing and stay focused on that. Its different for everybody as evidenced by all the different ideas posted here. Figure out what makes you move. Self awareness, self understanding, and and self acceptance are such an important part of success.

Really try to figure out who you are, strengths, weaknesses, your philosophies, beliefs, values...etc.

Then figure out what it is that truly makes you happy when you do it or when the result happens...that's your "why?" Then go do that in an industry you are passionate about.

If you are focused on doing or seeking the things that make you happy you will stay motivated to continue to achieve them.

This has been widely discussed in SE Michigan as well. Banks are holding onto inventory in an effort to artificially increase prices by lower supply (or so it seems).

Someone told me the Fed is pumping nearly 50 billion/month to prop up HUD & Fannie Mae. Can anyone confirm that? This is after the TARP bailout. For over a year now agents and those in the business have told me another rush of supply is just around the corner. Banks have to release the supply. But do they really? It doesn't seem like they do or is it really just a matter of time?

I'm an investor in SE Michigan. I know the market here in the Metro Detroit area is different than it is in the rest of the country but I'm curious to hear your thoughts as to how exactly is it different and why?

One big reason its different is bank financing is nearly impossible to get even for those people who meet the qualifying criteria themselves. Prospective buyers often find out just prior to their scheduled closing date that the bank has found a reason not to lend on the property. There will be a low appraisal, seasoning issue, insufficient comps to support value...etc. Therefore it has more or less forced our business to be all cash sales or if our clients need financing then we must provide it with private money. Don't get me wrong, this creates an unbelievable opportunity to fill a need but I'm curious how it is for you.

How is it in other states? I hear about people getting loans. I listen to discussions where the entire strategy revolves around some form of bank financing. So please tell me how you are getting deals done. Are banks lending in your area? Are you purchasing all cash? Selling all cash? Using land contracts or lease purchase?

I would love to see another dip so we can keep buying at these ridiculous prices but can anyone confirm the fed stimulus I commented on in my first post in this thread? Do banks have to sell there inventory or can they continue to hold out?

BUY/HOLD? SE Michigan! Metropolitan Detroit was the hardest hit by the avalanche of foreclosures. Add in the demise of the automotive companies who have cut a significant amount of jobs out of the local economy and its a buyers paradise.
3bd brick homes 1000-1500 sqft in the suburbs are selling 20-40k and many don't need much work! If you venture into Detroit the margins are even better.

Move in ready 3 bd Brick rentals in desirable areas (yes there are desirable areas in Detroit believe it or not) sell for 15-30k. You can get them cheaper than that if you venture into other areas of the city.

These homes rent for 650-850/mo depending on where and what condition its in making Detroit, IMO, the best cash on cash returns in the country!

Add in that banks will not lend here it creates a very unique marketplace. Its all cash or seller financing. Very unlikely to get financing here especially as an investor.

Creativity is key. Lease option will help you get a higher price but you have to be able to carry the mortgage which keeps you "in the woods." Do you need cash to move to another home? Is taking a loss an option? Homeowners in transit need to remember that losses taken on their sale can be made up with a good buy on the next purchase, but you have to be capable of sustaining an out of pocket loss. Seems pretty clear it's overpriced but it could be under marketed. Finding that lease to own buyer may require more attention from you. We do a lot of lease options & land contracts and can say 5-6k down is nothing on a 130k home. We get that at a minimum for 40-50k homes in Detroit. If you can't sustain the out of pocket loss that a price cut will result in you have to focus on seller financing or lease option. Or foreclosure.

Great topic. I invest in the Metro Detroit area. As you can imagine our market is dominated more than most with REO's. People around here have been talking about another dip for over a year but it hasn't come and I'm wondering if it will. Conventional wisdom says it has to but there is nothing conventional about this market.
What I've seen happen is banks took the "Bailout Tarp money" and shored up there books. The money was supposed to be made available to lend to consumers but that just hasn't happened...at least not here in Detroit.

Instead banks held that cash which gave them the ability to hold back much of the incoming inventory in order to decrease supply and artificially raise prices. Then all the rules changed about making offers, longer response times, owner occ only for first 14 days...things like that.

And to the bank's credit it seems to have worked, at least in the short run. More homeowners have been able to get steals and investors have been increasingly blocked out. BUT how long can it last? Everyone knows there is a huge back log of houses being held back but when will they have to be released? Do they?

Then somebody told me the Fed is currently pumping about $50billion/mo. to Fannie mae & HUD! Can anyone else confirm this? Maybe they wont have to open up inventory. Maybe that dip wont come. I am interested to hear comments on this thread...what is everyone seeing out there?

Your market is going to determine the best ways to prospect but here are a few ideas.
1. build relationships with REO agents in your area. A good agent who knows what you want and can get you properties straight from the bank can be a huge advantage.
2. cultivate private sellers. There is still an information gap ,usually, with private sellers so you can still buy low enough to create a spread for you to wholesale. Check out the marketing forum for ideas on how to market these people.
If you are going to wholesale you have to get properties at the source. I haven't found any sustainability buying from other wholesalers because they are extracting much of your potential profits when you buy. Not to say you can't find deals that way but its tough to consistently find good deals when you aren't the first one in the chain of sales.

The easiest way is to find the BEST sellers agent in Chicago and sell through them. OR you have to take on the marketing yourself. Check out the real estate marketing forum for more ideas if you need them.
Call your friends & colleagues...if you have that many props in Chicago you must have met others along the way that would be interested in buying them from you.

I think the proper use of an agent is determined by how you have your business set up. A good agent who understands what the investor is trying to accomplish & can truly help the process is obviously an asset to any business because they will free up time & energy for the investor to focus on other parts of the business.

The problem is most agents don't understand and do not help. If you are knowledgeable enough to see a deal through to the end & you have a sales system in place to generate buyers you may not need an agent. However, if you don't fully know how to work a deal through or have a large operation then a good agent may be just what you need. I think it best to have someone who is part of your organization whom you can train yourself.

It's like hiring any other employee...they need to provide value or there is no need to have them. Some people are better than others so find a great one and keep them happy working with you.