All Forum Posts by: Simon Campbell

Usually capital reserves do not exceed 5% of the gross income. That is unless the property is in very poor condition or one that has not had these large ticket items replaced since construction. 

Your real estate agent should not be getting any sort of kickbacks from the broker - so they shouldn't care who you get your loan from. In fact, if you can get a cheaper mortgage payment, it would seem that they would be happy for you. A mortgage is too long-term and too expensive to make choices based on friendship.

Your figures on vacancy and repairs are typical estimates but there is no formula that supersedes actual figures. What is the vacancy rate for your area? Check with property managers, multi-family real estate agents and appraisers.

Then get profit and loss statements from the original owner. Find out what work has been done on the units. If they are upgraded with recent floor coverings, kitchen upgrades, new windows etc. Then the repair estimate could be a little lower for a 10 unit or above.

Here is an option. Is the property in a state that has a redemption period? If so, perhaps the property is still in it. If that is the case, if you can track down the owner or trustee, you can offer to redeem the property for them in exchange for title and a little extra cash for their effort. Gets you the house and the original owner is thrilled to have $500.

It really comes down to cash flow, profit margin and time. Create a simple spreadsheet and compare them side by side. Include any renovation or cost of repairs, market rent, vacancy, utilities, mortgage, down payment etc. Then look at the bottom line - your net income at the end of every month - if it is a buy and hold.

If you intend to flip it, factor in AVR, holding costs, days on market and closing costs. 

Whichever one makes you more money is the one to move on.

I wonder if there are any statistics out there that show if crimes against real estate agents are any greater than crimes against other professions. What are the odds that an agent would get attacked in a life-time of work?

I am not saying that we shouldn't be cautious but that should be general practice throughout life regardless of what we are doing or in what profession we are in.

@Account Closed  Things are even getting better. National statistics reveal that foreclosures fell by one percent year-over-year in April 2014, which is almost four years in a row that foreclosure activity has fallen. Banks and other lenders are initiating fewer notices of default against homeowners, and the rate – currently around 115,000 homes beginning the foreclosure process each month – is nearing the 2006 rate of approximately 85,000 per month.  This indicates a much more stable real estate environment. 

That is true. Paralysis by analysis. When looking at all of the trees, it is easy to forget about the forest. That simply means that we start with the easy analysis (50% and 1% rules) and then and only then do we advance onto more details such as expense and rental rate verification. 

The only thing @Joshua Jensen is that in many markets the 1% rule doesn't apply. Take NYC for example. Purchase prices are extremely high and the rents do not reflect 1%. But, like the 50% rule, the 1% rule can be a quick decider when looking over a slew of available properties. It is just best to first check and see what are the area norms.

From what I understand, you cannot work directly with Chase on obtaining foreclosure properties. Once they are listed, then you can purchase them as a REO but as long as they are in the foreclosure limbo (otherwise known as zombie foreclosures), they are untouchable.

Making contact with Chase, however, could dust off the file that they probably forgot about and get the process active again. But I highly doubt if they will sell direct. Let us all know if they do!