All Forum Posts by: Account Closed

I am not sure if this has been brought to the board before, though I have been successful with a new strategy I have used for searching for REOs and I would like to share it.

Instead of looking for lis pendens in the news paper, looking up county records online one by one.... I actually got an entire list of the vacant and foreclosed buildings with dates last noted as vacant, and some bank information.

What I did was, I filed a Freedom of Information Act request with the the Clerk of the town I have found myself working alot these days, requesting: "a list of all vacant and foreclosed properties in the Village." I got a very detailed list in about 1.5 weeks and I had my intern spend the afternoon looking up banking info. From there you can act as you will towards the bank as if you found their info a different way. The good thing about this is often there are foreclosed buildings from a longtime ago but have not been listed for sale. In these circumstances, a list like this has been useful to find not as easily found properties. SOme places have a person who specifically goes and looks and takes care of vacant homes.

I met a guy at one of my newly purchased places and while I had met his boss at the City Hall (not Chicago, but a Burb), this guy actually went from vacant house to vacant house to remove sticks from the lawn and make it look decent. He notes the buildings' status, and I think he might actually mow lawns but I am not sure. He asked me to remove the no trespassing signs the bank put up, since its now no longer bank owned, he can actually tell someone that cares that its unsightly. I didn't fully acquiesce to his request, however - the bank has some really stick labels on a window - and like a sign in the window is really going to avert any trespassers. Actually this guy is the one who told me to FIA the request for all vacant and foreclosed homes in the town. While I had used the FIA before, it was not for this specific purpose.

I am wondering if anyone has also successfully used this technique, and whether you have found the Freedom of Information Act useful for other purposes?

I have found the FIA useful in working with the Chicago buildings dept. They don't seem to take a lot of things seriously, but FIA's have a decent turn around time (sometimes - at least a couple times my FIA requests have not received responses). To my dismay, my FIA info request on whether I had an FBI file came back negative.

Look at similar properties that sold in your neighborhood. Note same number of bedrooms, bathrooms, quality of finishes, heating type (central air?) or other modern upgrades, yard space, basement, etc.

Personally I am really paranoid about resale price because its hard to sleep ESPECIALLY when you're just starting out and you are scared of failure. Find a good real estate agent and send you all the listings in your neighborhood, both active and closed. You can browse and look for comparable homes. Tell him/her to send you active listings and go view comparable and those actually on the same street to see the competition. See lots of houses. Look at ones that are cheaper and nearby - if they are as good as your finished product you should reconsider and reanalyze.

In this market your house needs to be both the cheapest and nicest on the block.

I am dubious when an owner says his building is worth more than it is, because it's my opinion that all my properties are worth more than they are worth to the market. My opinion is not worth anything. Be very dubious and have confidence, but triple check everything!

If this place only needs paint, appliances and landscaping, why doesn't the current owner do it? He might not be telling you everything - could be more renovations than you think. I would hire a good inspector especially since your end buyer will definitely get an inspection, and if something costs 750,000 nowadays, it had better be pretty beautiful place.

For cash deals What I do is I have many bank accts at the same place. I do a funds transfer between the accts and ask the banker to print a balance statement. I use the funds transfer to put the exact amount of $ that I want to show the bank I have (and because it is intrabank it is instant and has no holding period).

I then write in the earnest money amount in the contract to be deposited with either the sellers agent, attorney or title co, but I never create the official check or money order until the offer is accepted. I clearly write in my cover letter that the funds will be delivered by courier upon acceptance, but I attach my bank statement to the first offer.

Also really handy is those Internet fax things like fax. I don't use fax but another service that incorporates phone. My office doesn't have a scanner but it does have a fax, which basically substitutes as a scanner. It has saved my butt in a crunch several times.

Usually the title company handling the closing will require your operating agreement, basically your llc's bylaws. You draft them yourself with an attorney. Your status as members or managers should be clearly delineated. Furthermore, when you organized your LLC, you should have stipulated whether your LLC is member managed or manager managed. This distinction can allow a manager to have full control as opposed to it's owners. If it is member managed, then technically any member can act on behalf of the firm in any legal capacity. USUALLY your operating agreement will clearly lay out your firms decision making process and stipulate who are authorized to make offers and things. At least it should. I noticed the original poster is working with family. With my brother we just are both members but it's sometimes a hassle for us to have us both sign offers (new bank accts are always difficult since he's so busy with grad school).

Usually what we do with documents including offers, sworn owners statements, etc, we do lots of scanning and emailing.

I think Bank of NY Mellon has a huge inventory in their dead CDO portfolio.

Another one of a different class:

Closed Dec 2009 in Southside Chicago
Deutsche Bank
List price 66,000 (down from 99,000)
Days on market - around 80 days or so

1st offer: 60,000 cash
The agent came back to me and said there was an offer for 75000 but had a financing contingency
2nd offer: Resent the offer but scratched out the original offer price and just wrote it there with a pen and my brother and I signed the correction. I was trying to be deliberate to show the bank we were serious buyers. Offered 68000 cash and it was accepted.

Who knows if the other agent was being truthful maybe there was no other offer.

I put in 60k for the rehab and under contract in 1 week. It finally closed in June 2010 for 220,000. I was my own agent on both transactions so I made money there too.

The cool thing is that since I found the property on the MLS and sold it on the MLS, the end buyers (normal retail buyers, not investors) were fully aware that the house was a flip. The loved the work and was happy to move in.

Here's one:

Closed May 2010 in Chicago, West Burbs
Bank of New York Mellon
List Price: 150,000 (lowered from 170,000)
1st offer: 132,000
2nd offer accepted: 135,000 - cash
ARV: 300,000


This was found on the MLS. The agent is one of those new breed that only does REOs and lists lots and lots of properties. After first offer the bank wanted the "best and final." The house had already been listed for over 100 days and I knew they were not getting any offers. This is the type of area where there are a lot of retail buyers and not many investors. Also, it is in pretty bad shape. I knew their best and final was ******** and I kindof scolded the agent. I added 2500 to my offer. They took it.


The rehab will be quite expensive though about 80k, selling at 300,000 is my minimum goal. Should not be difficult, cheapest house on the block for sale right now is 315,000 and a good post-rehab comp sold in June 2010 for 377,000 - just across the street and 5 houses down.

I read your previous post and I understand you may not like to learn by reading or studying, though if you just look at the top three posts of this "Real Estate Deal Analysis" forum, there are three "sticky" posts that will answer all of your questions. Good luck dude.

There are lots of ways to analyze it. But you haven't told us what you wan tot do with it. Do you want to resell it? Rent it out?

How do you know it is valued at $750,000? You should find that out for sure by finding the values of recent sales of comparable properties. Recent sales are not other active listing - they must have closed!!!! If its a "Realtor" telling you its worth that much, or if it says it in the listing, I would second guess it and perform your own due due diligence.

These forums have all the information you will need. Work hard! Its not as easy as it looks!