All Forum Posts by: Samantha M.

Judging by member feedback on wholesalers in general in threads such as this http://www.biggerpockets.com/forums/93/topics/71654-this-place-is-chock-a-block-with-wannabe-wholesalers-what-is-the-reality

As someone who is looking to get into wholesaling I am trying to educate myself first and foremost. But when it comes to building a buyers list, should I avoid Bandit Signs? What do you personally think when you see a bandit sign?

Bandit Signs, as the name suggests, tends to lend itself to the bad stigma of wholesalers in general , weasel clauses, inflating ARV and underestimating repairs etc.

Perhaps I should forego bandit signs and utilize more conventional methods such as REI expos, online advertisements etc

First off, thanks for your in-depth replies everyone!

As far as Neighborhood amenities concerning schools that I have a question. How do you find out exactly which school a neighborhood will go to?

In the image below its a picture of a subject property in MLS. The school district it belongs to is Cedar Hills ISD. There are numerous individual high schools, elementary schools etc within Cedar Hill ISD. For the given subject property, how do you find out exactly which school within the ISD the property is assigned to?

You refer to NGB multiple times throughout your post, does that stand for Neighborhood Governance Board? Thats the only neighborhood related acronym I could find on google.

Anyways, so lets say the subject property is located in Rolling Hills Addition1. If I am understanding you right, even if Rolling Hills Addition 2 or 3 is across the road, you can go ahead and pull comps from the other additions for your subject property.

Thanks, yes I make sure the comps used for sold ARV price are retail, fixed properties. I exclude sold "as is" and REO's. Again making sure the comps for the ARV price are renovated and retail condition.

Thanks everyone keep the feedback coming!

Thank you for the indepth reply Mellissa, I really appreciate it. I had some additional questions as well if that’s ok.

Since I will be buying the houses with cash, then the difference between Insured and Insured with Escrow makes no difference to me because I won’t need a loan.

My understanding is once I property exceeds $5,000 in repairs to inhabitable the house becomes uninsured and does not qualify for FHA financing.

In other words what that means to me as a wholesaler, is when I am looking at these properties. If the property is Insured or Insured with escrow, there are probably no MAJOR structural issues in the house. For instance needing major foundation or roof repair correct?

There are two categories of insured HUD homes.

1) Insured
2) Insured with Escrow

Both of which qualify for FHA financing once the repairs have been made correct? Whats the difference exactly between "insured" and "insured with escrow"

Thanks!

Thanks again Jscott!

As far as bidding as an individual or corporate buyer. If you do not have a LLC I assume you can still purchase the property under a DBA yah?

Let me begin by saying I am new to wholealing I try to pull comps as conservatively as possible, as if every house depends on a hard money loan. Here is a general guideline I use, I would love to have some feedback.

1. Try and only go back 6 months if possible to get sold comps in determining ARV. If 6 months back does not get enough solid comps, then do 8 months, then 9 months, then maybe 10 at max. If you have to go further back then that ditch subject property not enough solid comps to show ARV.

2. Need at least 3 solid sold comps

3. Within +/- 20% Sq Footage of subject property at MAX. I prefer within +/- 10% if possible.

4. Within +/- 10 years

5. Same number of bed/bath/garage for comps as subject property if possible. e.g. Subject property is 3/2/2 comps need to be 3/2/2 or 4/2/2. Try and keep same exterior as subject property in comps as well ie. if subj property is frame ext, pick frame comps.

6. Geographic area for pulling comps, stay within confines of major roads as illustrated below.

7. Once have solid Sold comps, get the median $ per sq ft price and multiply it by the subject properties sq ft. For instance lets say the sold comps based on the above criteria ( 10 years, 20% sq ft etc) show a average price of $63.00 per sq ft and your subject property is 1500 sq ft. You take 1500 x 63.00 to get an estimated ARV of $94,500

Thanks for your feedback!

Thanks for the quick reply on my HUD listing period question. I had some additional questions as well.

1. If you are an active realtor does that help you when bidding on properties. From my understanding if an investor is not a realtor they will have to find one, and have them make the offers on their behalf. Thus making the bid higher because it includes buyers agent commission. If the investor himself is an agent they just put in $0.00 for the commission, and thus can put in a better offer on the HUD. Is that correct?

2. Also I heard through the grapevine that HUD requires you to own an LLC to bid on houses. Is that correct?

Thanks for your time I appreciate it.

Investors can only bid on properties once a property has moved to the extended period listing. Below is an example from HUD homestore to make sure I have a good understanding of how this works.

1. Example property has an Bid Open Date on 4/29/2012 when the asset manager will begin reviewing bids.

2. The property will move from Exclusive Listing to Extended Listing 30 days later from the Bid Open Date on 5/29/2012

3. On 5/29/2012 the example property will now go to open listing where investors can now bid.

Is the above correct? You have to wait a whole month watching on a property to move from exclusive to extended so you can bid on it? Also does moving from exclusive to extended normally result in a price drop?