All Forum Posts by: Tom C

You know it wouldn't be such a big deal if this fool hadn't been going around for years telling everyone else how to live their lives.

You know it wouldn't be such a big deal if this fool hadn't been going around for years telling everyone else how to live their lives.

Same as Scott.. I have never got a counter offer back from HUD.

David,

I did not. I was going to on the one house that I had problems with, but after it was treated 2 yrs ago, I haven't seen any signs since then. I can't see spending 80 bucks for someone to come out and tell me what I already know.

No!!! We have a major issue with Pit Bulls in my town. By law the owners are required to register them with the city. Not one owner has registered and no one enforces the law. My tenants have black labs and cannot even walk their dogs up the street due to being attacked by Pit Bulls. They called me the last time it happened and I told them to to stop screwing around and call the police. They refused saying that the kid that owns this one is really nice and the dog just get out the door sometimes. Mean while they cannot walk up that part of the street with their dogs. Most Pit are friendly to people, it's other animals they have issues with.

Not that this really has anything to do with this topic, but the other night I was coming back from collecting rent and I just got a Crackberry, well I have all my music loaded in it and a connector that hooks up to my radio, so I can listen to it in my car.. Well I decided that I was tired of listening to Kid Rock and was screwing around with it trying to find BuckCherry, I looked up and there was a mailbox right in front of me.

Needless to say, I took out my neighbors mailbox and took off my passenger side mirror on my Mazda 6. So $100 bucks and an hours worth of time replacing a mailbox and $200 to replace my mirror, I learned It's not a good idea to be screwing around with a Crackberry when driving down the road. Thank God it was a mailbox and not a person.

Jon,

It would depend on exactly where the land is. In my town, property goes for around $3K an acre and if you put a $65K home on the property and your septic has been upgraded, it would sell for maybe $200K.

That same property in the town where I grew up which is around 20 miles north and all low lying swamp land, would go for $120- $150K. As far as farming value, not really. We have plenty of over grown pastures that can leased very cheaply. Actually, there would be more value leasing it for hunting purposes.

The reason you could rent it so cheaply is because most people who are willing to pay $700 + in rent, can go out and buy a cheap home for a lot less.

As an example, I bought my home which is a 3bd / 2 bath on 5 1/2 acres for $92k, 7 years ago. At the time, the area was the place to be due to our GM plant going full steam and it's near a main freeway. Not many renters see the value in living on 25 acres, so it would be much harder to rent, then let's say 1 acre and a house.

The house right next to me is a 4 bd / 2 bath on 10 acres and it's rented out for $450 a month. The renters are renters, they have no desire to farm the land or raise any kind of live stock, they just wanted to be in the country and have their kids go to a good school system.

Yes, I was told that AMCs and lenders are now requiring comps no older then 90 days and I am still pulling the loan, it just reduces the amount that I can pull and I will have to change my game plan of buying a few REO's to most likely one.

I guess the good thing about it is that it keeps that payment lower.

Eddie,

The REO's and HUD's in my area would never qualify bank funding and certainly would never go FHA which is what most younger people use.

Not only are they not even close to be able to pass a basic FHA inspection, but they are missing, copper, furnaces, water heaters, fixtures and even when you get all that stuff put back in, then you are looking at the operational conditions of a home that has been sitting empty for 2 years or more.

My last REO had so much clogged black pipe it took me weeks to get the water runing to the shut off's. Then up here in the north, we always find one or two broken water lines in the worst possible place.

This leave these type of homes to either be bought by investors or though a community block grant program where the city pays for the rehab. I understand what you are saying, but you or an appraiser really can't compare a REO purchase to a retail purchase.

I may have only had $3K in materials in my this rehab, but I had many many hours of my time invested into making it functional and livable again.

Jeffrey,

To answer your question, no we have not experinced the deflation of housing values like many parts of the country, because we never saw the bubble that the rest of the country experinced. My area has been in a depression since the mid 80's when we lost our steel mills.

Our unemployement rate has been a steady 12 to 14% over the past 20+ years. I was figuring in the lost of possible 5 to $8K due to market conditions. By biggest issue with this appraisal is the fact that he went across town into some of the worse places and pulled comps, when there were plenty of comps on my side of town and he factored in my purchase price, when in fact he never should have taken that into consideration, because the purchase was well over 1 yr.

Eddie,

You are right and this is where the competent appraiser comes into play. Anyone who is familar with REO's and HUD's knows that you cannot use that purchase price as a comp, you have to market value.