All Forum Posts by: Tom C

There you go..

Since you are thinking about investing out of your area and you want to purchase property, pick up a 30K house and try managing it from a distance.

If need help locating and managing one, let me know. I can help you out there.

IBM,

An example of the homes that I purchase for rentals are no more then 35K that will take a couple thousand to make rentalable or I buy HUDs in the low teens to low 20's and put up to 8K in them and rent them out. The best rents I can get in my area are $650 per month and the worst are $300. So knowing that the max I can get 650 per month and the worse case is 300 per month, each home has to be evaluated based what you can get per month on that individual home. For 650 a month rent I would not pay over 40K for a home. Then again, there are many homes in my area that fall into this bracket. Also finiancing comes into play. I look at each deal as if I am paying on a 20 yr loan at 7% for that home.

It depends on who the firm is. Some will list the wining bid that night, others wait until the next day. If you want the property and have already looked at it, make sure your broker has your check for the DP and your proof of funds. So as soon as the bidding opens, they can bid and submit the paperwork. HUD has to get your paperwork with the set time period. Find out who list HUDs in your state and you can go out and get their requirements and you can watch the site to see if you won. Don't get greedy either. I just lost out to the perfect HUD simply because I waited too long.

I hope you have walked through the house already.

Lisa,

In order to save up 300K in savings you have to be pretty good with numbers. How can $2600 a month in rents pay for your total PITI. I assuming that your property tax rate has to above 1%. As you can see you will not make enough in rents to even pay your mort. insurance and taxes and as you know putting down a huge down payment still isn't making this a deal. There are people who are fine with paying a little toward the mort each month and taking the write off, but that seems like a foolish thing to me when you can be actually earning something on that money elsewhere. Those rents seem awful low to me for CA. Isn't a $650 a month renter considered low rent in CA?

I wouldn't do it either. I have walked away for at least 3 deals on 25K duplex's over the past 6 months simply because the cost of converting them was too high and there was too much risk by leaving them when the tenants are only paying $400 bucks a month rent. Most of these homes have been owned for well over 10 years by their current owners and how these people were able to survive that long I'll never know. Must have had some pretty deep pockets.

Nate,

I am assuming that you are putting down at least $500 bucks and showing proof of funds on your REO's in order to get them under contract? I haven't found a bank yet that doesn't require this.

Thanks

King,

Let me tell you about 2 properties I looked at this week. On the outside they were perfect for a buy, rehab for 5K and hold for rental. This first property is almost perfect on the outside, newer vinyl and nice garage with a fenced in yard. Tax accessed at 70K, area comp's 68 to 112 all on the same road.

Went inside and it needs perhaps 8K in rehab. Asking price is 21 after ARV will be a firm 75K. The second property listed 16K nice outside, ARV 50K, will need a new roof in a few years. Opened the door and mold everywhere. Went to walk down into the basement and major mold everywhere. Went in the basement and raw sewage still a little wet all over the place. Water lines on the walls show at one point 3'. This rehab just went from being a deal to a total failure. Both properties are HUD's and HUD has this great policy of shutting off the electricity, thereby shutting down the sump pump.

My point is that I can't tell you how many homes I have looked at from the outside and as soon as you walk in the door everything changes. Good luck on Monday and let us know.

TC

Many sales including my own has no sales price listed on our county auditor web site. I have no idea why this is and some day I will make a phone call. When this happens I then look at the tax assessed value and you can pretty much figure out that the accessed value is always about 10 to 15K less then the real value of the home.

Also you as far as your heating goes, you can go to Lowes or Home Depot and buy baseboard electric heaters. So when you do decide to turn the electric over to the renters, they will be responsible for their own heat.

I wouldn't jump into it. I have a neighbor that decided to walk through his flooded basement of raw sewage and he is still fighting a staff infection in his privates years later. You never know what kind of nasty's are just waiting to creep into your body through whatever orifice they can find.