All Forum Posts by: Calvin N.

Tiese, Did you use a realtor to make this purchase? If so, ask them to see what can be done to delay without the per diem charge.

You said you have until tomorrow to acccept or reject the offer...does that mean the seller made you a counter offer? If so, just counter their offer with the later closing date. If you have not signed an accepted offer you should be able to make that change in the closing date. Keep us posted.

Douglas, I had a discussion about this today with a guy I work with. The issue I have with the idea that you can buy properties at 50% ARV is that the market determines the value. A house is only worth what someone is willing to pay for it.

Sure, you can buy properties well below what an appraiser, realtor or investor says it is worth. However, can you sell it for that amount? If you base the price on what the property was worth two years ago then getting it at 50% is not surprising. If you hold it for 2-3 years you may be able to sell it for an amount close to the 2006 prices.

As investors we like talking about ARV and how we can buy properties well below it. Unfortunately, if no one would buy it at the ARV then the ARV really doesn't mean anything.

Hassan, I have read many posts on other boards from Realtors complaining of the same thing about REOs. From what I have experienced the banks don't want the properties but most of them have so many levels of approval before they can sell that the process is overwhelming.

It has taken years but HUD appears to be the one organization that understands that you must lower the prices to get them sold. There are HUD homes in my area selling for half of the listed price.

Maybe one day most banks will realize the same thing. There are many ways they could simplify the buying process. Fortunately, I do see some banks responding to bids quicker and requiring less paperwork for the initial bid. Fannie Mae is getting better on their bidding system, also.

Keep us posted on your deals.

Paul, Others will give a more detailed response but here are the way I see the numbers:

Purchase price: 250K
Repairs: 30K
Closing costs: 7500
Total: 287,500
Monthly payment: $1912.75 @ 7% for 30 yrs
Monthly Income: $4800
50% rule: $2400 - 1912.75 = 487.25
Cash flow = 487/3 units = $162 per unit

That is good.

The other questions:
1. No, it never makes sense to claim a property is OO (owner occupied) unless the owner is occupying the property! That is fraud.
2. Section 8 will certainly have a problem with an apartment that is not "legal," technically or not.

Best of luck. The numbers appear good. Others may dissect them in more detail and give you more to go with.

How long do you have to find the money? The Pemco site says the offer was made in mid December. When do you have to close?

Thanks again for the great info.

" I haven't made any offers yet and have a few more properties to look at before I do; a step I'll complete later this week."

Hassan, You confused me on this. Earlier in this post you said you have 2852 QUINBERY DRIVE SNELLVILLE, GA 30039 under contract. What is the status of that offer?

Thanks for the informative post.

I agree with Steve. Each person has to make the decision if the project is profitable for them, based on their needs. Now, you may have investors that require a detailed financial statement before they will loan you money and, if so, then you can provide that.

Great job, Hassan. The mls didn't show it under contract but the Pemco site does. It is great for investors that can get properties at these low prices but it is killing the values of non REO homes. Oh well, time to go find some more great deals! Keep us posted.

Heather, It sounds like a great idea. Maybe you can convince them to do it.

See, if you had only been an irresponsible adult and not paid your bills on time like you agreed to when you signed the mortgage papers you could get a lower rate! One day the banks may realize that giving lower rates to better customers is the best way to go. Have a great day!

Hassan, Thanks for the report. I look forward to reading more. I am a realtor and have access to the GAMLS so I looked up some of the properties you mentioned. One not on your list (you may have already eliminated it) is 3842 Holland Dr. It is currently listed at $48,300. It needs carpet, paint and other repairs that may exceed your 15K budget. However, it is closer to your target purchase price.

In that subdivision there have not been many homes sold recently. You are planning on a 6-12 month marketing time which is right for that area. Keep us posted.

Getting the 2852 Quinbery Ct. property for your price will be a challenge. That is a steep drop from the listing price. Best of luck!