All Forum Posts by: Serge S.

I'm looking for a seasoned property manager in Pinal County, AZ. Any good leads would be greatly appreciated.

Thanks everyone - all great replies.

I agree that this is a risky endeavor. Last owner had a $1.2M note in 2005 and obviously could not make it work (not that it matters). Agreed on all fronts that further DD is necessary but I wanted to get to a ballpark offer to see if it would even work. Looks like the owner is into it for $350k so maybe there is not much room to make something happen here.

This is a one factory type town but it is adjacent to a very fast growing city with business and infrastructure coming in.

I say oversupplied units because the town was way overbuilt with 4plex and duplex units 2000-2005. From considering buying one of these type of foreclosures it looks like its not the easiest to find qualified tenants and keep them there. The advantage this complex has is that it has a pool and in AZ this is important. My competition would not have these amenities.

The building was built in 1972. Units actually look OK. I'd love to offer and buy for $150k but will not happen. Multifamily has recovered in Arizona and 1950s tear down in war zones are selling for $100k+.

My take from initial discussions with the seller is that he may be willing to take a loss but anything under $300k would not happen. My initial thoughts were to be all in at $500k with a target $75-$90k NOI. A decent cash flow play with some built in equity. Clearly the expenses are the key estimate and needs to be dug further into.

Hearing all of your thought process is very helpful.

I'm looking at an off market 40 unit. It was purchased by an investor at trustee sale and nothing has been done since. Its empty at the moment.

40 units - 1 and 2 bedroom
$400 average rent = $16k gross potential
Factor a high vacancy as the city is overbuilt with multifamily
$200k in renovation ($5k per unit, pool, roof, landscaping)

Owner is open to financing with large down, I can go cash or combo with owner financing or other investors. Multi cap rates are 8%-10% in this area on retail deals.

Would love to hear what kind of offer you guys would make.

Interested to hear the typical deal you guys have closed in the past 60 days in your respective market.

I spoke to the listing agent and HOA. Its occupied by the owner and a tenant. Sounds like a scam to get the new owner to honor the lease. The listing agent was made responsible to work with the owner post foreclosure. He said he went there 10 times and nobody answered the door. Maybe not home, most likely playing games. The bank did not initiate proceedings. They foreclosed a few months ago, listed on the MLS and then put it straight to an REDC auction online for a cash only deal. i was the winning bidder and what was a seeming good deal ...

I estimate non distressed ARV conservatively at $185k remodeled. I can't pin down a good estimate of rehab since I can't inspect but I can gut the entire home for $20k if necessary but unlikely so I'm estimating $10k rehab. Obviously a lot of room for error here.

Thanks Joel. Thats just one of my concerns. Typically I would just rent back to the tenant and sell in a year and a day. I really don't like this strategy here since the HOA is a killer and forces one year leases, lease registration fees and the almighty special assessments. This would all cut into my return and suck up unleveraged cash for an unknown time period.

Just locked an interesting one into contract. Would love to hear the experts advice on this deal, exit strategy is to flip it.

High end condo in up scale neighborhood in Phoenix (off the 51 and Northern for you locals). Locked into contract at $101k cash. REO that is still occupied by the owner, I have made no contact with occupant and bank states no inspection period or contact with the owner is allowed until COE. Built in 1997 and interior condition is unknown but HOA takes care of exterior, roof, etc. Two recent comps:

Comp 1: Same model w same sq footage and floorplan sold 10-22-11 for $139k cash short sale via MLS. 43 days on market. Looks to be in decent condition with no serious upgrades from MLS listing.

Comp 2: Same model w same sq footage and floorplan sold 3-25-11 for $150k cash short sale via MLS. 127 days on market. Looks to be in good condition with some kitchen and flooring upgrades.

No recent non distressed sales. Nearly all past sales don't stay on the market very long.

All other comps are over a year old and are from $185k (8-2000) to 398k (6-2007) at peak.

HOA is $240 monthly with special assessments of $5k last year and $3.5k the year before. HOA monthly fee has doubled in last 5 years. Overall HOA fee is reasonable for upscale condos in PHX.

I'm typically a buy and hold investor and only flip if for whatever reason the home doesn't fit my long term ROI criteria after purchase. This one would not be a hold for me as I can't stomach the HOA and I can find better returns.

Finally, keep in mind PHX is VERY low in inventory, homes at trustee sale are selling for retail and there is literally very little buy and hold or flip prospects out there so don't compare this to a deal from two years ago. Its a different market right now.

Any and all advice is well appreciated .... J. Scott and the experts give it to me straight!

I would pass on any deal from Altisource. They do their sellers a disservice. Beware of the title co they use called Premium Title. They are an affiliated Altisource company and not independent so you will have little sway in a dispute over earnest funds or anything else. They say in the bidding stage that seller will pay for title if you use their title co but they still charge you. There is nobody that will pick up the phone so you cannot dispute anything. If you do reach someone odds are they will not speak english. I'm shocked that this third rate company has not been shut down by NAR or the any of the other regulatory agencies. I understand outsourcing but how much more expensive is it to hire Indians that can speak english? I'm very shocked that sellers have not been fed up by now and moved inventory away from these guys. No idea how they are still getting listings.

Absolutely terrible experience. They list through a local agent proxy and use their own title company. Throughout the process they lose documents, don't answer questions, etc. My opinion is that this is an illegal operation. They don't use licensed agents or title officers anywhere in the transaction. At the end of the day there is no benefit to the buyer other than a massive headache. My lender said they would not fund a transaction through this company again.