All Forum Posts by: Trent Woods

So those of you that do REOs and forclosure investing...how do you handle trashouts and clean up? Do you hire a contractor? Do it yourself? How much do you pay? Thanks.

Now is a great time to purchase properties in Arizona, but be careful! Prices are so unstable though generally going down, rents are going down, and vacancies are going up. That means there are great deals out there, but you will have to have the capital to hold most things for awhile...longer than you would guess or like. I am young too (28) and have done very well on some investments (RE, stock, bonds, etc..), and lost my butt on a few too. Be very careful to weigh all the risks you can possibly think of, including about plan D, if A, B, and C should fail. You have to always protect yourself, despite the lure of fast money. In fact, at your age and experience level, moveing too fast will undoubtedly get you into trouble. Nothing coud be worse than you losing all your capital, and destroying your credit at your age now. Long story short...there are lots of great buys out there for the long run, just be super careful and dont let greed get the best of you.

There are several issues at hand with regards to an indoor pool. First, liability, which has been discussed. An empty pool is a bigger liability than a filled one! If someone falls in an empty pool, your butt is on the hook. It doesn't matter if it was covered, fenced, signed, and the person was on crack...at a minimum you will spend a fortune in legal fees. If the pool is filled, you still face tremendous liability with potential drownings. Talk to your insurer and make sure you get a good GL insurance policy which covers it. You made need an excess policy too. If you fill it, I would certainly provide a professional cleaning service and make sure your rent is enough to cover it. The other big issue is moisture. Indoor pools require a way to handle the moisture and evaporation. In the grand scheme, it is ideal if there is a powered exhaust fan that turns on when moisture levels reach a certain per cent. Surely that is not already in the home, unless it is an extremely high end home, which is doubtful if you are getting it for that great of a price. So you need to consider the possibility of future mold, or even a current mold problem depending on the age of the home. Mold can develop extremely quickly given the right elements...moisture and food being the two most important...which an indoor poor is a perfect combination. A thought would be to demolish and fill in the pool? Anyway you look at it...you have costs a risk.

I am in the Phoenix area and the rental market is defintely suffering, however I cant say how much is due to illegals. Quite frankly, 1 in 10 dollars in Arizona was attributed to construction, so since the construction market has crumbled, it has had tremendous impact on the rest of the economy. As such, there are very few jobs for anyone, much less illegals. Throw in the employer sanctions law (allows the government to revoke a firms business license if caught knowingly employing illegals), and there are very few jobs for illegals. Truth be told, the illegals that I happen to know personally, are all still here and in their houses, either owned or rented. I know FAR more average legal residents that have walked away from their houses than those that are illegal. Anyways, given the overal downturn here, the rental industry is certainly hurting. Rents are going down as vacancies are going up. Commercial vacancies are increasing now too.

So what are the the average dollar amounts that the bank allows? Is it based upon square footage? A flat rate? Or what? Thanks.

My firm is a 56 year old contracting company that has done business all over the southwest US, although we are only operating in Arizona at the time. We are primarily commercial contractors, with a residential branch. We are seriously considering starting a division to handle REO/foreclosure trashouts and clean ups (getting rid of all the junk homeowners have left in the home), but are a little unsure how to break into the business line. Due to our current business lines, we have all the necessary tools, equipment, personel, insurances, and licenses, so it is just a question of getting in contact with the right people at banks, asset managers, and private investors. Also, if desired by the clients, we can handle any necessary repairs (such as flooring, drywall, electrical, etc...), as well as grass painting, and pool draining. I am sure that we could be very competetive in this business line and provide excellent service to our customers. For now, we would only be interested in Arizona REO's. How do we get in touch with the right people to start doing that type of work? Are any of you directly related to this type of work? Thanks.