All Forum Posts by: Scott Schultz

Even if we see a recessionary period, I dont expect to see big change in real estate, many markets are super heated, BUT a recession will probably only moderate the market. I Flipped and sold foreclosures all the way through the last downturn, the difference this time is lending is not predatory not everyone has ARMs. and more people have a lot of equity. Currently most markets in the US is short on Inventory, so lets say we see a market slowdown, so days on market increase and maybe a slight downturn in prices, and I mean slight if any, the reason prices dipped last recession is because the sellers (banks) could discount to get properties sold, setting lower comps. and many homes were abandoned and blighted. now there are not many blighted homes compared to then, yea in a down turn a few people will lose there homes, but we will probably never see in our lifetime another 5.5% foreclosure rate like at the worst point of the great recession. I hate to burst your bubble Newbies, that ship has sailed, get comfortable with making deals work today, or wait till your old and its too late for you.

Even if we see a recessionary period, I dont expect to see  big change in real estate, many markets are super heated, BUT a recession will probably only moderate the market. I Flipped and sold foreclosures all the way through the last downturn, the difference this time is lending is not predatory not everyone has ARMs.  and more people have a lot of equity. Currently most markets in the US is short on Inventory, so lets say we see a market slowdown, so days on market increase and maybe a slight downturn in prices, and I mean slight if any, the reason prices dipped last recession is because the sellers (banks) could discount to get properties sold, setting lower comps. and many homes were abandoned and blighted. now there are not many blighted homes compared to then, yea in a down turn a few people will lose there homes, but we will probably never see in our lifetime another 5.5% foreclosure rate like at the worst point of the great recession. I hate to burst your bubble Newbies, that ship has sailed, get comfortable with making deals work today, or wait till your old and its too late for you. 

I don’t think we are going to see a down turn anytime soon,  at least not a significant one, this is why I have move to the new construction game for now, I’m proving concept and budget right now (I’m in the drywall phase) I will live in the one I’m building and have 2 more lots for specs, the new home game is more fixed cost but has less potential upside from a great deal, land deals are the only “discount” I will continue to buy if deals come my way, but I’m getting picky. Focusing on debt repayment so I have plenty of equity and “dry powder” when we do see a pull back, the lack of inventory is the big issue, and by building I’m trying to help that, but cost to build is high compared to incomes, so it’s a difficult spot right now, but I think it will be changing in the coming years. And Forget everything I said if this COVID-19 thing gets to a pandemic level. 

Saturated and over priced in most markets, there are still deals to be had for cash buyers, but we tend to be taking on bigger rehabs and tougher situation, that we use to, also, SO MANY NEWBIES that will get crushed in this market. especially with all the predatory HML's and PML's giving these newbies false sense of hope. I much prefer Rural Tiny towns as long as I have a Rock Star Manager in the area.

Is there a reason you need Hard Money Vs working with a small local Bank? you will have skin in the game either way and banks are usually cheaper interest and closing costs. for investment and needing rehabs Commercial loans are the way to go, 3-5 year ARMS usually Prime + something depending on your income and credit history and the deals DSCR. Hard Money is expensive. My Opinion is, if you cant borrow from a bank, you need to work on getting your personal finance house in order before you jump in to Real Estate Investing, it takes a lot of money to stay afloat in this business. things can happen that will break you. but it can be the best investment of your life, just be prepared.

I’m glad you got out of the deal, all I’m saying is I know people who have not gotten out of their deal, and ether lost Ernest money or ended up in court with a seller, I would bet if it was 2010 they would not have backed down so easy, . I have purchased on mos of the online platforms and represented buyers on them as well. All I can say is here is the potential to lose money in Real Estate, I have, that’s just how it goes. Best of luck on your next deals. Hope they go better, this current market is getting crazy, and I’m seeing more properties in worse condition and more complicated title issues, money can always be made but some problems are just harder to solve. Good luck out there!

@Kenneth Garrett Right, that’s what I’m saying, it’s important to do your due diligence up front on auctions I’ve never had to invoke the FOIA. In 14 years, but I suppose if you get any pushback. Honestly I have never needed to even submit a written request, the title company does sometimes for their special assessment letter, but even that is often just an email. I have found a simple Phone calk is all it takes and the people at the municipality are eager to help.

Kenneth, understand this was an Auction.com deal, "under contract" does not mean the same thing, when you are winning bidder you dont have a due diligence period, its yours, you bought it. this homework needs to be done upfront, in general a quick call to the inspectors office will reveal what you want to know. in most places a formal request is not needed, unless in a big metro. 

Originally posted by @Kenneth Garrett:

@Account Closed

I’m glad you were able to get out of the contract, but this what I do on every property as part of my due diligence and can also be used as a bargaining tool.  Once you are under contract submit a FOIA (Freedom of Information Request) request to the city/county or whatever jurisdiction your under.  First of all it’s free.  Request any outstanding liens, fines,   bills or ongoing litigation on the property.  Are there any current or previous code violations on the property.  A history of all permits issued on the property active and closed and all inspection reports.  Any zoning violations on the property, etc. You will be surprised in some cases what you learn.

A property that has been condemned does not mean it’s slated for demolition, but that could be the end result.  It means it’s unfit for occupancy.  There is not necessarily a lien on the property and will not show up on a title search.  A city can hold the amount of fines owed by waiting till you request the water/sewer being transferred to you or turned on.  There is no lien.  It’s unnecessary because there waiting for next owner or individual to come in.  There could be a $1000 outstanding water bill waiting for you.  I had a situation where there was a $4000 fine waiting for next buyer for the city cutting the grass from years ago, no lien filed.

All this should be done as part of your due diligence.  I’m glad in this case it worked out.

OMG So many of these responses are CLUELESS! A Bank sell in the case of Auction.com (for PNC in this case) is sell an interest in real estate, they are not insuring anything, you are just buying their interest regardless of defects. A title search would not reveal a Raze or Repair Order, In WI it would be unusual for them to be recorded. Often notices are on the property but not always. the sellers title company generally does not check with the inspections department to see if there are any work orders or a raze order. They do get a "special assessment letter" but thats just things like back water bills, bills for noxious weed cutting, or snow removal the city did because the owner did not. Discovering this should have been part of YOUR due diligence process, you signed away your rights to back out for any reason when you signed that long contract in Docusign that you probably didnt read. I would bet there is language that covers this situation. Here are your options, dont close, and plead for your ernest money back (you wont get it) or close and see what it takes to get the order lifted. Buying Auction properties is not for everyone, its for the big boys and girls that know what they are doing, I buy at online, as well as sheriff and in person auctions, BUT I have also been party to over 800 transactions with 95% of them being in the Default world of real estate. I have been a broker since 2006 that specialized in REO I have seen this situation play out many times. at the end of the day. BUYER BEWARE.

the current tenant must meet the screening standards you want. my concern is if the tenant trashed the carpet, is this the kind of tenant you want? its fin if thats ok to you, but to me its not. not sure if it dirty, or heavy wear, but if its dirty, they attracts pests, and can cause problems with other tenants and neighbors. you need to ask yourself what kind of landlord do i want to be. just my $0.02