All Forum Posts by: Wendell De Guzman

Taylor Jennings, to find out the stage of the foreclosure, google "[county][state] court docket". Then when you are at the county court docket website, click on "Chancery" (cases) then look for the seller's name under "Defendant".

Taylor Jennings,

Depending on how quick the foreclosure is (meaning at what stage in the foreclosure process, the house is at), you can formulate the right solution accordingly.

1. If the house still has some equity (30% or more), you can say to the seller, "I can buy your house cash before it gets foreclosed on."

2. If the house does not have 30% equity or does not have any equity, AND there is NO SUMMARY JUDGMENT yet (stage of foreclosure), you can tell the seller, "I will negotiate a shortsale - offer cash to the bank and get you out of your situation."

3. If however, there is already a SUMMARY JUDGMENT or worse, the foreclosure sale is already SET, you need to hire an attorney to buy you more time while you negotiate a shortsale.

The above three solutions assume the seller does not want to stay in his/her home.

Which county is this in Indiana? I might be able to research this for you to find out what stage the foreclosure is in. Let me know.

Giovanni Garcia, where did the rent of $3,450 come from? I thought the rent is only $1900/month? If that was a typo or came from a previous deal, your CCR is NOT 60%.

$1900/mo rent less operating expenses of $746.50 less $765.51 of mortgage payment equals $387.99 a month cashflow.

Multiply that by 12 and divide by cash invested of $35,650 results in a CCR of only 13%.

Also, your $35,650 - that is just the downpayment to get the investment. What about REPAIRS or renovation? You have to add that to your downpayment to get your total cash invested.

We allow pets but require a $500 pet deposit - $300 of which is non refundable cleaning fee...

Adam Demchik is right on.

I have the same experience: sending letters 4-5 times to the same list is better. The follow up letters put you on top of the seller's mind and you gain more credibility. Hence, people will likely call you vs. other amateurs who only send 1 letter.

Giovanni Garcia, how did you come up with 60% CCR for this?
Have you factored in expenses in operating the building, like vacancy factor, repairs, replacement reserves, taxes, insurance, property management, trash removal, etc?

The link you sent was not working...so maybe it was there.
If you are not familiar or you don't live in the area I wouldn't do the deal. I did a deal once in a war zone because the numbers are phenomenal. It turned out to be my WORST investment ever because I bought into an area that I am not familiar with.

Ned Carey, you are right on.

Ru Monsell, in addition to what Ned said, I don't like bidding on auctions because I always feel I don't have the time to do all the due diligence I needed to do. For example, in some states you can't even see the inside of the property - just the outside. What if the property has foundation issues or structural issues?

If this is your first real estate acquisition, I will stay away from bidding at auctions right now. Do REOs first. At least you can inspect the property first and generally, the title is clear of any liens.

Don't buy in Chicago, it's not an emerging market...we don't want CA money to increase prices here (joking only).

Seriously, Chicago is getting hotter indeed and finding a good deal is becoming more difficult. But as always, within a market, there are submarkets. For example, Dupage county is HOT but watchout though: within Dupage county, there are cities you should NOT buy in.

If you want to know what these submarkets are, contact a real estate investor local in that area.

John P.,

I agree. It's a bad deal.
I don't care even if you pay down the loan over time.
I don't care even if it appreciates like crazy.
You can't eat equity.
You can't live off on appreciation until you cash it (if you cash it).

With $70K downpayment, you can leverage that to buy a multi-family apartment building (not in CA though) which will generate at least 10% CCR if not more.

As early as 2005, I pointed out to my CA-based "investors" (they were really speculators) the folly of investing for appreciation. They just shrugged their shoulders and they told me that prices will not go down and the money from appreciation is really good.

Well...they are all bankrupt now.
Learn from history...and those who don't learn from history are bound to repeat its mistakes.

Karen Margrave, thank you for pointing this out: "status of the project with the City Building and Planning Depts., State agencies, etc." - this is definitely going to be part of my due diligence.