All Forum Posts by: Account Closed

Personally I would be SUPER conservative when considering adding new property to my portfolio if I was in the USA right now.

Appreciation is the LAST thing you will be experiencing in the next 1-3 years for sure, real estate values are set to drop off another cliff once the banks release their shadow inventory onto the markets and another round of homeowners start defaulting.

I wouldn't pay anywhere close to retail on any property with the current economic conditions. Too risky.

That's just my opinion though and you probably know more about your local market than I do. Always be careful.

The WePay site doesn't allow us to select a Canadian billing address. Do you think this will prevent the charge from going through on my credit card?

Bigger Pockets has been infinitely valuable to me so far and I hope it continues to thrive and bring people and ideas together in the future. Rich's incentive is generous and I definitely want to help push this to the 1200 mark so it doesn't go to waste!!

Have any other users from Canada successfully donated via WePay without entering a valid billing address? Is there another way I can donate without sending a cheque?

Just make sure the comps are truly comparable properties and not too different from the property in question here. Make sure they are in the same area, same sq ft, same quality of materials, same features, roughly.

Asking this agent for comps will probably give you the best idea of values in the area with the smallest effort.

When you say the son wants to transfer the deed to you, are you implying that you will be taking over her existing loan? Keep in mind there is such a thing as a "due-on-sale" clause that as far as I know gives banks the ability to call the entire loan due. Search the forums here on bigger pockets if you want more information about this clause.

Aside from that, though, it may in fact be wise to take the house with the existing loan assuming the bank is okay with this happening, assuming you can afford to support it, and that the loan to equity ratio is low enough. You could get lucky and grab a slab of instant equity and get the house for basically free :D

Find out what she owes and we'll know the next step to take.

When I referred to recreational property I meant secondary property people own and only visit on occasion. Also known as vacation property. Not a primary residence.

It sounds like these places are in fact primary residences. In that case you don't need to be EXTRA cautious about buying it as an investment, but you still need to be really cautious.

Step 1. Find out what the woman owes on the property (if possible without intruding or being rude)

Step 2. Make a crazy low offer, like 30-50% ARV. If you need to, talk to her lender about doing a short sale and begin negotiations with them.

How long have these other properties been sitting on the market for? If they have been for over 45 days they are likely overpriced, so factor that into your ARV. They could very well be WAY over priced. In reality it could be possible that you'd only get 70-90k out of the property you are looking at as a flip after repairs. Possibly lower if the economy continues to drop out. I can't stress the importance of finding out a true value for this property before making an offer.

My understanding is that you would only consider this transaction a "short sale" if you offered LESS than your neighbors mother owed on the property. If she only owes 67k then you may not have to do a short sale, which may mean you don't need to negotiate with the lender at all.

The thing you really need to be careful with for this to be a deal is the ARV. Make sure you absolutely have a solid ARV. If you are looking at scooping this thing for cheap and selling it after a short period of time for profits, essentially a flip, then you need to make sure you are BUYING at a low enough price. Lots of people are speculating that the market will drop further, and I haven't heard of any that are thinking it's going up any time soon.

The real estate market in your country is shaky shaky business and I would be extremely cautious planning to buy and hold anything new for the next year or so unless it was rentable and could support itself or I was getting it for crazy under market value. If you got it for crazy under market value that would give you a buffer for any drops in the market until you sell it.

Also, could this property be considered recreational property, being that it's on a golf course? Or is it really just residential? Keep in mind that in tough times recreational property is going to drop hardest and fastest and stagnate on the market.

Be careful! If you really can get it for 50% ARV and the ARV is solid, then I might go for it. I would definitely plan to flip it for profits sooner rather than later though. (don't wait a year.)

Just my thoughts, good luck sir!

you know what, I've thought about this a little more today, and I think I see where the problem is with this deal.

It's in the fundamentals. First, the property I want to buy isn't a great deal, it's market value. This is bad. You make your money going in. Secondly, I hadn't planned to profit off of the business I built on the land, rather, the appreciation that I would gain over 5 years of holding it. This is speculation, also bad. I had my heart set on it because I had the OPPORTUNITY to potentially buy it below market value a few months ago based on my knowledge of the sellers situation, but that time has come and gone.

Whew. I think I learned some lessons here:

1) Don't buy at market value. Too hard to make money.
2) Don't get your heart set on a property
3) Don't speculate. Invest based on the fundamentals.

Have a good day everyone.

Good suggestion, Jon. I'll go crunch some numbers...I'm not confident there is enough of a market in my city to support the kind of business I'd need to run to support my loans, but I'll look into the numbers for sure before discounting the idea. Thank you.

Any other suggestions?

So here is the scoop: there is a little piece of property that I know of. About 20 years ago, it was just a little lonely farm house sitting on 9.9 acres about 15 minutes outside town. Since then, the town has grown, and this piece of land has found itself right on the outskirts of all the new commercial and residential developments. My mom found out from a friend that the little old lady that owned it was recently ill and put in the hospital. Immediately my mind went, cha chinggg. I should have stopped by, offered them 700k for it cash and walked away grinning. But I just wasn't ready yet, I'm still young and learning, and it seems I may have missed the real good deal I could have made. Fast forward a month or two, and I see a realtors face psoted on the front lawn. DAMMIT. She WAS ready to sell!!! I call him up, now they are asking 3.9M.

No problem though. After chatting with him, and knowing fully what their personal situation is and the reason for selling, I am confident I could chip that down significantly. In about 5 years time, the value of this property is going to be MUCH higher, as it will be smack dab in the center of a bunch of high end residential, commercial, and literally 800 meters from the main arterial road of the city.

Here is the question: What can I build on this property that would be able to sustain the, lets say 2 million dollar loan plus development costs, for enough time until the rest of the development catches up and swallows it, allowing me to sell and cash out a few mil profit?

I'm thinking a car lot...potentially cheap, all you need is a building and a bunch of pavement, and then that way when you sell, there isn't much to demolish to make way for new stuff, just a car lot. But are car lots making any money these days?

What else could I develop on this property that would sustain itself for 5 ish years? The land is to be zoned C4. This is in Alberta, Canada.

I would plan on working with private lenders to fund this.

Any input? Big opportunity here. Just need to figure out how to make it work and I'm a millionaire!

Josh, if you want to move this to commercial, go ahead. I wasn't sure where it fit best. :)

I do, however, disagree that grouping people based on their chosen career (a conscious choice) is the same as grouping people by something they have no control over, such as race, or debatably, religion. I don't think anyone is going to say that any group of professionals is inherently evil in any way, merely that they may be good or bad at certain aspects of their careers...

anyways, peace to all! :D

What funding did you use to run these deals? Private money, hard money, your own cash in from the bank?