Jeff Pasquino
Footballguy
Pre-selling 3 of the units would be a MAJOR plus to any bank.You get one, sell another 2 before you're done..... sell final 2 later.
Win/Win....
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*** Official Real Estate Forum *** (1 Viewer)
- Thread starter jeff_eaglz
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Win/Win....
Norman Einstein
Footballguy
Mike, how is this house? mls#2603863
Battles
Footballguy
$50K. LOWEST you could humanly get HUD to take is High 30's. Really, in a slow market, they are going to want mid 40's.One thing about HUD, you will have to use a Realtor, there is no other way. I once got beat on a HUD property where I had the Highest bid, but another bidder got their Agent to slash their fee to almost nothing, and the Net to HUD was better than my Net. HUD only looks at Net. Just a little piece of knowledge that I thought I would pass along. That's why a Realtor has a greater shot at a HUD house. HUD won't pay a buying Realtor a commission, but they can reduce their price by the commission they would have received, and still beat you with a greater Net offer. Just something to know.
Let's say $45K. Now, if you are in a Sellers market, you could very likely have to over bid the $50K asking price. I have Paid more than asking on HUD properties in the past, but it is no longer really the case in my market.
Another thing with HUD, no seller concessions. If you have a rehab, look into:
Section 203(k)
I have never used the program, but I have researched it. I would LOVE anyone who has walked this path to post some info.
So lets say $45K, and you do $15K in rehab out of your pocket. I am just winging it here, as I don't know your credit score, or what rate you could get. I'll assume good (you are a FBG afterall), and that you put down 10% at say 8% interest as an investment property??? On a 30 year fixed (That's what I use, ProNinja and maybe Jeff might call that insane, and provide better alternatives?) you are looking at 297 a month.
I've got your taxes at 150 a month, and FIRE insurance at say 50 a month (Probably lower in the $30's, but lets play it safe).
That's 497.00
Now, you have to rent it, there are expenses, the works.
Take the $850 a month in rent and take it out 11 months (11 months because you can assume one down month a year to re-rent and clean, fix, etc.) Really, you are going to have times where the rental is out of commission for 3 months, but I am off setting that with the fact that SFHs attract longer term renters. Anyway, 11 Months.
That's $9,350 a year. Assume that you will get a good deposit, and with the longer term renters, maybe you have $200 a year over the say $800 deposit you will charge. That knocks you down to $8,600 a year.
Now, lets take out a Major repair a year at say $300.00 (It will OFTEN almost ALWAYS be alot lower than this, certainly if you put in $15K up front to rehab), but let's play it safe again. Let's lose another $200 a year to advertise. Drops you down to $8K a year.
Take that back out over 12 months. That's $720 a month. Take the $497 away, and you are looking at $224 a month.
I would carry a $40.5K Mortgage for $224 a month. Absolutely. And remember that we beat this up pretty good, and the return will likely be greater.
Looks like your Market in TX works for rentals. Take $20-25K off the purchase price, and that EXACT home (In style and everything) is available all day long in Rural IN. Only you'd be lucky to rent it out for $475 a month.
Side-note: Here is the COOLEST thing about buying a HUD property: Once you buy it, you will have the Keys to the Property given to you at the closing table. Take the key to the local Locksmith, and tell them you want a "Master" to the key that you have. They Will cut you a Master override key for every key in the series of the key you received/gave them to cut. What you end up with is a MASTER HUD key for every HUD home in your market. Don't get caught, or at least have a great cover story worked up like you are the structural engineer looking at the place, or something if you are caught on any given property, but you will get a Master key that will open any HUD house in your market. Even if you don't buy a HUD house, find someone who has, and ask them for/Buy the Locks and key off the HUD house they just got (They will be changing the key anyway, and they won't have a clue how valuable it it). Anyway, if you can get a key from any HUD house, you can get a master created that will get you in any HUD house in your market where you can come and go as you please. If anyone asks, you heard this from some guy named BassNBrew.
Great info Mike. I appreciate that. I'm headed over to the property after lunch to do a walk through.What is the negotiating process like on a HUD? Do you lowball? My first impression is that it won't stay on the markey very long. There are a couple investors/flippers active in town and if it's in decent shape it will probably go fast. I'd like to get it for around 43.5k, but could see having to pay 45k+
Also, what is the status of your Hispanic area investments? Has gentrification started? There are plenty of run down properties on the other side of the tracks, but I don't see the property value ever rising. I honestly would probably be uncomfortable investing in that area, but I can see the money being made on places that are dumps.
Battles, I'm confused, do you live in Taylor or Austin?$50K. LOWEST you could humanly get HUD to take is High 30's. Really, in a slow market, they are going to want mid 40's.One thing about HUD, you will have to use a Realtor, there is no other way. I once got beat on a HUD property where I had the Highest bid, but another bidder got their Agent to slash their fee to almost nothing, and the Net to HUD was better than my Net. HUD only looks at Net. Just a little piece of knowledge that I thought I would pass along. That's why a Realtor has a greater shot at a HUD house. HUD won't pay a buying Realtor a commission, but they can reduce their price by the commission they would have received, and still beat you with a greater Net offer. Just something to know.
Let's say $45K. Now, if you are in a Sellers market, you could very likely have to over bid the $50K asking price. I have Paid more than asking on HUD properties in the past, but it is no longer really the case in my market.
Another thing with HUD, no seller concessions. If you have a rehab, look into:
Section 203(k)
I have never used the program, but I have researched it. I would LOVE anyone who has walked this path to post some info.
So lets say $45K, and you do $15K in rehab out of your pocket. I am just winging it here, as I don't know your credit score, or what rate you could get. I'll assume good (you are a FBG afterall), and that you put down 10% at say 8% interest as an investment property??? On a 30 year fixed (That's what I use, ProNinja and maybe Jeff might call that insane, and provide better alternatives?) you are looking at 297 a month.
I've got your taxes at 150 a month, and FIRE insurance at say 50 a month (Probably lower in the $30's, but lets play it safe).
That's 497.00
Now, you have to rent it, there are expenses, the works.
Take the $850 a month in rent and take it out 11 months (11 months because you can assume one down month a year to re-rent and clean, fix, etc.) Really, you are going to have times where the rental is out of commission for 3 months, but I am off setting that with the fact that SFHs attract longer term renters. Anyway, 11 Months.
That's $9,350 a year. Assume that you will get a good deposit, and with the longer term renters, maybe you have $200 a year over the say $800 deposit you will charge. That knocks you down to $8,600 a year.
Now, lets take out a Major repair a year at say $300.00 (It will OFTEN almost ALWAYS be alot lower than this, certainly if you put in $15K up front to rehab), but let's play it safe again. Let's lose another $200 a year to advertise. Drops you down to $8K a year.
Take that back out over 12 months. That's $720 a month. Take the $497 away, and you are looking at $224 a month.
I would carry a $40.5K Mortgage for $224 a month. Absolutely. And remember that we beat this up pretty good, and the return will likely be greater.
Looks like your Market in TX works for rentals. Take $20-25K off the purchase price, and that EXACT home (In style and everything) is available all day long in Rural IN. Only you'd be lucky to rent it out for $475 a month.
Side-note: Here is the COOLEST thing about buying a HUD property: Once you buy it, you will have the Keys to the Property given to you at the closing table. Take the key to the local Locksmith, and tell them you want a "Master" to the key that you have. They Will cut you a Master override key for every key in the series of the key you received/gave them to cut. What you end up with is a MASTER HUD key for every HUD home in your market. Don't get caught, or at least have a great cover story worked up like you are the structural engineer looking at the place, or something if you are caught on any given property, but you will get a Master key that will open any HUD house in your market. Even if you don't buy a HUD house, find someone who has, and ask them for/Buy the Locks and key off the HUD house they just got (They will be changing the key anyway, and they won't have a clue how valuable it it). Anyway, if you can get a key from any HUD house, you can get a master created that will get you in any HUD house in your market where you can come and go as you please. If anyone asks, you heard this from some guy named BassNBrew.
What is the negotiating process like on a HUD? Do you lowball? My first impression is that it won't stay on the markey very long. There are a couple investors/flippers active in town and if it's in decent shape it will probably go fast. I'd like to get it for around 43.5k, but could see having to pay 45k+
Also, what is the status of your Hispanic area investments? Has gentrification started? There are plenty of run down properties on the other side of the tracks, but I don't see the property value ever rising. I honestly would probably be uncomfortable investing in that area, but I can see the money being made on places that are dumps.
Homer J Simpson
I don't push
Mike, it'd be great to look at some properties with you. Let me know the next time you're going to be in town and maybe we can set it up. I'll have my license at the end of July/early August and won't be buying anything until then (except maybe that brick double) but it'd still be great to pick your brain a bit.And you're so right about the old neighborhoods...there's amazing potential for rehabs, rentals, flipping...anything you want to do. It seems like it's all about finding the right deals, which is where you'd be a great resource.
Jeff Pasquino
Footballguy
This is why I keep coming back here.Good stuff Mike. Love that "blame it on BnB"....Side-note: Here is the COOLEST thing about buying a HUD property: Once you buy it, you will have the Keys to the Property given to you at the closing table. Take the key to the local Locksmith, and tell them you want a "Master" to the key that you have. They Will cut you a Master override key for every key in the series of the key you received/gave them to cut. What you end up with is a MASTER HUD key for every HUD home in your market. Don't get caught, or at least have a great cover story worked up like you are the structural engineer looking at the place, or something if you are caught on any given property, but you will get a Master key that will open any HUD house in your market. Even if you don't buy a HUD house, find someone who has, and ask them for/Buy the Locks and key off the HUD house they just got (They will be changing the key anyway, and they won't have a clue how valuable it it). Anyway, if you can get a key from any HUD house, you can get a master created that will get you in any HUD house in your market where you can come and go as you please. If anyone asks, you heard this from some guy named BassNBrew.
Battles
Footballguy
Looks like I'll be making an offer on the HUD home. (I'll have to get the wife's approval tomorrow afternoon 
) I've got the loan lined up so I'm ready to go with that.
Link
All hardwood floors, original claw foot tube in good condition, good woodwork, and overall it has good bones. It will need re-wiring, some leveling, some a/c work, some plumbing, sheetrocking, and new cabinets. I'm doing everything but the a/c work on my home, so I can save some labor money on this if necessary.
The property is held by Southwest Alliance of Asset Managers. What I understand there web site to be saying is that there is a 30 day initial listing period. During this period are they just collecting bids and the high bid at the end of 30days gets it? Does anyone have any experience they would like to pass on? Do I need to make a one time best offer?
Buying Process
I would say it needs 15k of work to be flipped or around 10k to be rented. The agent that walked me through confirmed that $800 rental or around 80k flipped were very realistic numbers.
You guys seem to come up with knowlegable info on everything, so I'd like to hear any thoughts and pointers you guys have now
) I've got the loan lined up so I'm ready to go with that.Link
All hardwood floors, original claw foot tube in good condition, good woodwork, and overall it has good bones. It will need re-wiring, some leveling, some a/c work, some plumbing, sheetrocking, and new cabinets. I'm doing everything but the a/c work on my home, so I can save some labor money on this if necessary.
The property is held by Southwest Alliance of Asset Managers. What I understand there web site to be saying is that there is a 30 day initial listing period. During this period are they just collecting bids and the high bid at the end of 30days gets it? Does anyone have any experience they would like to pass on? Do I need to make a one time best offer?
Buying Process
I would say it needs 15k of work to be flipped or around 10k to be rented. The agent that walked me through confirmed that $800 rental or around 80k flipped were very realistic numbers.
You guys seem to come up with knowlegable info on everything, so I'd like to hear any thoughts and pointers you guys have now
Homer J Simpson
I don't push
Where can one find the HUD listings?
Battles
Footballguy
Work. I left the architecture job in Austin to take a project management job that is located in Taylor. Bought a house here because of the low cost. I'm in the .0001% of FBG's that aren't millionares.
I'll actually be doing this next house on a tight budget, but I think it's going to be well worth it.
Jeff Pasquino
Footballguy
Call
and tell him that the place needs X repairs and it's only worth it to you if you can make 10% on the house, otherwise why buy?Tell him it is worth $110-125K, and you are conservative as this is business for you.$110 x .9 = 99K, and it needs 15K of work and you will have 6 months of mortgages and taxes while you own it. Plus closing costs when you sell.
Work up the spreadsheet and say take 75K or we're on to the next property.
Final offer will be 79K if they pay all closing costs.
Numbers don't lie.
Random
Footballguy
He is claiming the net to HUD has to be 90% of the list which is 84,000. That works out to be 75,600 net to HUD. My realtor already told me she'd do 4% instead of 5% so I figure I need to offer 79,580 to get it (HUD agent gets 1%).Here's the kicker on this property. Realtor.com and the mls have it listed at 105,000. My realtor said if it were listed at 84,000 it would be gone. I'm still thinking I could do pretty well if I bought at 79,580. Close to 20k pretax if I can get 120,000 out of it.Call
$110 x .9 = 99K, and it needs 15K of work and you will have 6 months of mortgages and taxes while you own it. Plus closing costs when you sell.
Work up the spreadsheet and say take 75K or we're on to the next property.
Final offer will be 79K if they pay all closing costs.
Numbers don't lie.
I may be wrong, but I dont think the HUD guy can do much on the price right now.
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This is why I keep coming back here.Good stuff Mike. Love that "blame it on BnB"....Side-note: Here is the COOLEST thing about buying a HUD property: Once you buy it, you will have the Keys to the Property given to you at the closing table. Take the key to the local Locksmith, and tell them you want a "Master" to the key that you have. They Will cut you a Master override key for every key in the series of the key you received/gave them to cut. What you end up with is a MASTER HUD key for every HUD home in your market. Don't get caught, or at least have a great cover story worked up like you are the structural engineer looking at the place, or something if you are caught on any given property, but you will get a Master key that will open any HUD house in your market. Even if you don't buy a HUD house, find someone who has, and ask them for/Buy the Locks and key off the HUD house they just got (They will be changing the key anyway, and they won't have a clue how valuable it it). Anyway, if you can get a key from any HUD house, you can get a master created that will get you in any HUD house in your market where you can come and go as you please. If anyone asks, you heard this from some guy named BassNBrew.
Did I mention that I have friends in the IRS and FBI? Mike Anderson and Jeff Pasquino is a much bigger head start than Drugrunner and JeffEaglz
Jeff Pasquino
Footballguy
Wasn't me - it was him.This is why I keep coming back here.Good stuff Mike. Love that "blame it on BnB"....Side-note: Here is the COOLEST thing about buying a HUD property: Once you buy it, you will have the Keys to the Property given to you at the closing table. Take the key to the local Locksmith, and tell them you want a "Master" to the key that you have. They Will cut you a Master override key for every key in the series of the key you received/gave them to cut. What you end up with is a MASTER HUD key for every HUD home in your market. Don't get caught, or at least have a great cover story worked up like you are the structural engineer looking at the place, or something if you are caught on any given property, but you will get a Master key that will open any HUD house in your market. Even if you don't buy a HUD house, find someone who has, and ask them for/Buy the Locks and key off the HUD house they just got (They will be changing the key anyway, and they won't have a clue how valuable it it). Anyway, if you can get a key from any HUD house, you can get a master created that will get you in any HUD house in your market where you can come and go as you please. If anyone asks, you heard this from some guy named BassNBrew.
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Homer J Simpson
I don't push
Slacker.
Mike Anderson
Footballguy
Both. They are both wildly successful in my market. I am building, and not flipping.However I good friend of mine bought a place in this market (That I FOOLISHLY passed on because I saw the major problem that he missed. Turns out it wasn't an issue at all) for $32K. Did a Rehab, and it was extensive, I don't know the bottom Dollar amount, then sold it within 6 months of purchase for $140K.
I've bought a number of properties in the $30-45K range, put less than $10K in them, and then had appraisals at $90-110K.
There might be 30 of these deals in my market right now. There might be 100 in Homer's Market.
I firmly believe that Downtown Historic Properties are where some of the VERY best money can be made. It also carries the greatest risk, and produces more headaches for you. Nature of the beast type of thing.
Mike Anderson
Footballguy
No Clue, was hoping ProNinja would answer?I get tons of mail to refi with National lenders based out of state though.
Mike Anderson
Footballguy
Norm,Are you sure that's the correct MSL#?
I am pulling nothing in your state with that number.
Funny though, that EXACT MLS# in my area is a House EXACTLY two blocks away from my personal residence.
902 West Washington Blvd
Recheck your number and repost for me.
JerseyToughGuys
Tough Guy
just realized you are from Fort Wayne. Grew up in LaPorte. Went to school with a bunch from FW.
Mike Anderson
Footballguy
FIRST, let me say that HUD can and is a real pain in the ###. If I can find equal deals, I won't deal with HUD. Unfortunately, there are SOME great deals with HUD. Please don't think that buying all HUD homes is the path to success. They are really more of an obstacle to over come from time to time.That said, the Process on HUD is all about windows of opportunity. Most likely, they will open the bidding for the first X number of days to Owner Oc only. MANY sleazy RE investors work in groups, and buy them as Owner Oc, when they will never live there. You can buy a new Owner Oc HUD house every two years. Work with a couple of guys, and you can buy and flip them illegally much faster. It is illegal, and a Federal crime, although I have never even heard of anyone getting in trouble for it. Not that I don't know of anyone, but that I have never even Heard of it.Looks like I'll be making an offer on the HUD home. (I'll have to get the wife's approval tomorrow afternoon
Link
All hardwood floors, original claw foot tube in good condition, good woodwork, and overall it has good bones. It will need re-wiring, some leveling, some a/c work, some plumbing, sheetrocking, and new cabinets. I'm doing everything but the a/c work on my home, so I can save some labor money on this if necessary.
The property is held by Southwest Alliance of Asset Managers. What I understand there web site to be saying is that there is a 30 day initial listing period. During this period are they just collecting bids and the high bid at the end of 30days gets it? Does anyone have any experience they would like to pass on? Do I need to make a one time best offer?
Buying Process
I would say it needs 15k of work to be flipped or around 10k to be rented. The agent that walked me through confirmed that $800 rental or around 80k flipped were very realistic numbers.
You guys seem to come up with knowlegable info on everything, so I'd like to hear any thoughts and pointers you guys have now
It happens more than you think, and you WILL miss out on some deals because of investors that cheat the system for the sweetheart deal. At the end of the day, HUD wants to sell to Owner Oc. Even outside of the Owner Oc Window, you might bid a few grand higher but HUD gives it to the Owner Oc that bid less. Their first mission is to sell to Owner Ocs.
After the first window, you start looking at weekly windows. They run for 7 days, and take every bid. They DO NOT Counter, Ever. They either accept one, or move on. When I have seen them accept true low balls is when 3 or more investors have all low balled them, and they must feel that they are over priced. Doesn't happen often.
Lets assume that they don't accept your offer. You can either go back in the next window with a higher bid, or wait them out.
HUD will Continue to drop the price about every month on a property that doesn't sell. They will get down to $100.00 if that's what it takes to sell it. It is against the law, and the Charter of HUD for them to own property. They can only control property in a concerted effort to move it. It has to do with Anti-trust/Dust-bowl laws. Banks cannot own Keep property they repossess either, they are required by law to move the property.
Anyway, go back up, and assume that you are the one they select to sell it to:
THIS IS THE CASE where you NEED an experienced RE Agent. You will have to fill out about 11 pages of Material PERFECTLY, PERFECTLY. I knew a guy (Acquaintance) who was bidding against me for a Property. This was the guy that negotiated his agent to lower her commission to rock bottom (And I couldn't understand how he kept beating me
)Anyway, this guy beat me in the first open Window, but Failed to get his middle name or something correct on one of the pages, and they bounced his deal, and reopened the window. The second time he beat me again, but failed to initial one of the pages, they called his Agent, and gave him 3 hours to re-fax with the initial. Since HUD is on the West coast, it was after hours, he didn't respond in time, they bounced it to the next window. The third week in a row that his new bid beat mine, HUD found out that he had bought an Owner Oc just a little while ago, and the bounced it back to a new window. The 4th week his new bid beat my new bid, he was able to prove that the last Owner Oc was exactly 2 years and 10 days ago, outside of the two year window (But remember that we were still in the two years when we started bidding). Even though we were in the Open Window, he was bidding as an Owner Oc to have greater leverage.
Sure, I should have bid more and not be moaing about it now, the timing wasn't great for me at the time.
Anyway, he finally beat me, bought a 4 plex worth $180K fixed up, RIGHT in the heart of where I operate. He bought it for $46K, promptly re-plumbed it (Shoddy incomplete job, just patched broken supply lines in the basement), dropped in 3 new Hot water heaters, did a TERRIBLE wall repair where the problem was squirrels were tearing the wall part from their nest on the outside where a Hole was, that the Squirrels have since torn open again. He put it back on the market at $120K within 3 weeks of closing, and it has sat there exactly like that for the past 13 months.
Empty, Abandoned, and certainly not an Owner Oc.
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Mike Anderson
Footballguy
Not buying HUD Advantages - All of themBuying HUD advantages - Sometimes you get a great deal and only have to put up with a small mountain of unrealistic bureaucracy.
HUD doesn't care, they don't need to turn a profit, they are already paid by your tax dollars. They are a Pain to deal with.
Nice to have FHA and HUD loans for first time and low income Owner Oc buyers. The more home owners in America, the better for all of us in Property Value if nothing else.
However, once these risks that HUD guarantees, that couldn't get a loan from a bank or broker fail, HUD is a pain to deal with to get the property back out on the market.
HUD makes higher risk loans, that no lending institution wants to touch, funded by the Tax payers. They are not fun to deal with. However, every once in awhile, they have some silly killer deals. I would not use them as my only path to success.
NOW, if you are a First time Home buyer that will live there? Then you should absolutely check out HUD. HUD as programs for School teachers, Cops and other groups where they can get a HUD House at half listing price if not better.
Teacher Next Door
There are a number of Programs that greatly help what the Social side of our Government would like to see happen.
Mike Anderson
Footballguy
Jeff and I had a talk about this maybe some 10 pages ago or so (Not sure where?)I would almost NEVER show an unfinished home. As I pointed out before, even when I challenge prospectives that they might not have the Vision to see an Unfinished home, well over half the time, they respond with, "I'll just wait until it's finished"
The Woman makes 90% minimum of the "buying" decision, she wants to see a finished home. You will lose out time and time again showing too early.
Jeff may respond more, but this was beat up a ton back in the thread.
Mike Anderson
Footballguy
I've got a little time to kill, someone throw up a link to an investment property for me to analyze. I actually get a great enjoyment from dissecting deals, it's fun for me. I'm here for a little bit, would love to dig into a deal or maybe two.
Throw up a link to a property you have been thinking about.
Actually, even when I am not here, I like doing it, and would be happy to not be OVERWHELMED with a ton of them left in the thread, but happy to look at some if you are getting serious.
I am MUCH better at Multi-Families (2-4).
Throw up a link to a property you have been thinking about.
Actually, even when I am not here, I like doing it, and would be happy to not be OVERWHELMED with a ton of them left in the thread, but happy to look at some if you are getting serious.
I am MUCH better at Multi-Families (2-4).
Norman Einstein
Footballguy
no, it's suppose to be the ft wayne one...a guy on another board said he went to ft wayne to do some looking for investment and picked out this house. just wondered what your take on it was.
Mike Anderson
Footballguy
I am re-reading this thread from the beginning trying to find something.WOW, what a MONSTER thread this is, there is so much jam packed in this thread, it is mind boggling!
I wish I had this thread when I was starting out. For the last few years, when a nuts and bolts RE thread in the FFA came along, Bass would post for sure (He Always does, he's passionate about RE), flyingv would post (That guy has game, but doesn't seem to get in here much, anyway, he knows his stuff), Maybe I would post, and then a whole bunch of posters that NEVER owned more then their own home would post with some story about what their Uncle or Cousin did. That's about it.
I didn't follow the Finance threads at all, as that is not my area, but maybe ProNinja would post in those (And most likely Bass, remember, Passionate)
Then Jeff built this monster, and a MONSTER it is! Really, I am Energized like you wouldn't believe re-reading this thread. Outstanding.
I am spending all day tomorrow taking away a HUGE tree I had cut down for $200.00 to the city Yard waste dump for maybe $10.00, and then getting an 8x4x3 trailer loaded with the Mulch the Parks department uses for $5.00 to put out at rentals. It will be a killer hard day.
That said, I want to go and buy another home. This is an energizing thread.
Excellent work Jeff_eaglz!
OK, that said, it's my nature, and I would have to research it, but if I lived in the area, and could be there on a regular basis, I might very well take on this Hagerstown property. It's my Nature, and my radar is absolutely up.
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Mike Anderson
Footballguy
WOW, That took a good while to track down, but this is a GREAT thread, and re-reading a bunch of it was INVIGORATING! Stuff from a month ago is absolutely killer stuff!
Page 11, My main post on the subject is #508, and Jeff has great comments at post #521. Anyway, read around page 11 and 12 for comments on your question, great stuff there.
Mike Anderson
Footballguy
Norm, You could have told me my own market instead of having me try and dig through the MLS some 5 states over.
For you??? AS AN INVESTMENT, Seriously, this is a Dog. It's owned by Jane, a Friend of Mine who runs the Local Food Harvest bank that provides food for lower income families.
I've bought two houses from her (The wrong direction) within a half block of this property, and they are both winners. The Triplex over the SFH.
From time to time I have posted about the MAJOR CRACK HOUSE that I have no end of problems with that I am closer and closer to all the time of personally leading the mission to get torn down. Following the thread, you have to know about my troubles with this crack house.
Anyway, DEAD, DEAD, RIGHT, DEAD, 35 yards AWAY, DEAD, RIGHT across the street.
That is entirely the reason this property is on the market.
Now, if you are going to move to the Mecca of all Civilization, and live in Fort Wayne, IN, and make this property your home, I would answer this question very differently, as I know what kind of deal it COULD be, and it COULD be a killer deal.
It is zoned R-3, where you can take on a renter in the 3rd floor and basement (Where those used to be Stand alone units) and you could take the middle two floors, live like a King in one of the best cost of living cities in the nation, do RE in a great market, and live close to Mortgage free.
I know this property like the back of my hand, and could draw out the floor plan on a bar napkin. There are some serious advantages with it, but really only if you live like a King in it.
If you just want to invest in Fort Wayne, there are places with FAR better return. I am looking at a place right now within in the very same neighborhood (Remember, I live here as well) where I am currently over extending myself at $32.5K then a $5K rehab looking at $900.00 a month gross. Slam dunk? You bet ya, just overextending myself to pull it off at the moment with 7 units of rehabs currently working, and 3 that I haven't even thought about.
I have my eye on a 2 bedroom BRICK home with Oak Hardwood floors throughout just outside the official Historic District, less than a Block from 2 I already own, for 15K that with say $3K in rehab, I could rent for $550-600.00 a month.
This is my Market. You want to live in that house, raise your Family, Help fight the Crack house, go for it, you will make Thousands and Thousands before it's over living in one of the VERY best cost of living cities in the nation. You want to use it as an Investment, then DEAR GOD, TURN IT OVER TO ME, and seriously, I am not exactly sure I could make it work, but I would try. I really am not sure I could turn a profit on that place. I would be up for the challenge, but I personally live two blocks away, and own 24 properties in the district. I am not sure I could make that property work, I'm not even taking into account what I would take to manage it, just could I even get it to turn a profit. Not sure I could, and I am at ground zero.
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Mike Anderson
Footballguy
Norm, I know it's hard to know on the Internet, but if you and I felt that this "guy" would do the right things to help the VERY Neighborhood I lived in, I would be somewhat happy to turn him on to better deals that this one could ever be.
Outside of being a killer LL, and doing killer improvements, I am certainly not willing to give away good deals in my own personal neighborhood.
Obviously, it's extremely important to me. There are MONSTROUS deals in my Neighborhood where I just need to finish a few rehabs before I can take them (I' like 9 rehabs back). I might be enticed to let something go if I KNEW, KNEW, KNEW it would be for the best.
I just took on my first owner as a PM about 4 days ago, and he is already driving me nuts with his stupidity. Four units, a three Bedroom SFH, 2 one bedrooms, and an Eff. Seriously, driving me nuts in 4 days. However they are within three blocks of my own home, so I wanted them, and this owner was a TRAIN WRECK in what he was doing!!! I just need to train him right.
Mike Anderson
Footballguy
Really, nevermind. Where I might help Norman Einstein in my own market, I'm not interested in some random guy on a MB.Norm, I know it's hard to know on the Internet, but if you and I felt that this "guy" would do the right things to help the VERY Neighborhood I lived in, I would be somewhat happy to turn him on to better deals that this one could ever be.
Outside of being a killer LL, and doing killer improvements, I am certainly not willing to give away good deals in my own personal neighborhood.
Obviously, it's extremely important to me. There are MONSTROUS deals in my Neighborhood where I just need to finish a few rehabs before I can take them (I' like 9 rehabs back). I might be enticed to let something go if I KNEW, KNEW, KNEW it would be for the best.
I just took on my first owner as a PM about 4 days ago, and he is already driving me nuts with his stupidity. Four units, a three Bedroom SFH, 2 one bedrooms, and an Eff. Seriously, driving me nuts in 4 days. However they are within three blocks of my own home, so I wanted them, and this owner was a TRAIN WRECK in what he was doing!!! I just need to train him right.
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Mike Anderson
Footballguy
Huh? No one.
I've been driving around two neighborhoods just about every day that I want to buy a rehab/fixer upper house without luck so far. Only been a few weeks so I'm patient but someone I've come to know who is living in one of the hoods (fixing it up but going to move in with his family but he also rehabs houses for a living) and he said something the other day that has stuck with me. He said he may one day down the line get to know some of his neighbors and would love to see if he could buy their house. He was very casual and said this would only happen if he got to know someone.
Here's my thing:
Why not simply write up a great letter and send it to the people's homes that I feel like I could offer a fair deal, needs a good amount of fixing up? Win-win situation!
In my place in NY, I get stuff all the time from realtors about "We will sell your house" blah blah blah but I'm talking about a personalized letter explaining that I'm new to Austin and love their neighborhood and would like to talk to them if they are interested in selling their house. If they don't call me then I'll move on, but if not I may get a nice piece of property.
My cousin is a lawyer and wrote letters to ALL people who still had a registered old Porsche and ended up buying 5 of them. He really didn't think anyone would call but sure enough, some did. Even his friends told him he was nuts, now he's sitting pretty.
Thoughts?
Oh and this plan of mine I don't think is really done around here, I think it's considered sleezy or too aggressive but again, just sending them a nice letter, commenting on their nice street and house and the balls in their court if they want to take it further. Will state I will offer a fair price.
Here's my thing:
Why not simply write up a great letter and send it to the people's homes that I feel like I could offer a fair deal, needs a good amount of fixing up? Win-win situation!
In my place in NY, I get stuff all the time from realtors about "We will sell your house" blah blah blah but I'm talking about a personalized letter explaining that I'm new to Austin and love their neighborhood and would like to talk to them if they are interested in selling their house. If they don't call me then I'll move on, but if not I may get a nice piece of property.
My cousin is a lawyer and wrote letters to ALL people who still had a registered old Porsche and ended up buying 5 of them. He really didn't think anyone would call but sure enough, some did. Even his friends told him he was nuts, now he's sitting pretty.
Thoughts?
Oh and this plan of mine I don't think is really done around here, I think it's considered sleezy or too aggressive but again, just sending them a nice letter, commenting on their nice street and house and the balls in their court if they want to take it further. Will state I will offer a fair price.
Mike Anderson
Footballguy
Since I just re-read this thread tonight, I will say that there are multiple conversations on this subject before page 10. Most likely before page 8, it was one of the early topics.Only thing I would say is STAND OUT, you yourself said you got countless postcards in NY. I am in Northern Indiana, and I throw away 10 postcards a week.
Certainly if you send out enough, you will get responses.
And EXACTLY how many of those did you ever respond to?
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Norman Einstein
Footballguy
correct. it was just some random guy on another board. i have no idea who he is, but he mentioned the mls # and saw it was near you, so I just wondered if you knew anything about it.Really, nevermind. Where I might help Norman Einstein in my own market, I'm not interested in some random guy on a MB.Norm, I know it's hard to know on the Internet, but if you and I felt that this "guy" would do the right things to help the VERY Neighborhood I lived in, I would be somewhat happy to turn him on to better deals that this one could ever be.
Outside of being a killer LL, and doing killer improvements, I am certainly not willing to give away good deals in my own personal neighborhood.
Obviously, it's extremely important to me. There are MONSTROUS deals in my Neighborhood where I just need to finish a few rehabs before I can take them (I' like 9 rehabs back). I might be enticed to let something go if I KNEW, KNEW, KNEW it would be for the best.
I just took on my first owner as a PM about 4 days ago, and he is already driving me nuts with his stupidity. Four units, a three Bedroom SFH, 2 one bedrooms, and an Eff. Seriously, driving me nuts in 4 days. However they are within three blocks of my own home, so I wanted them, and this owner was a TRAIN WRECK in what he was doing!!! I just need to train him right.
JerseyToughGuys
Tough Guy
The nearby foreclosure I mentioned last week has my juices flowin'. I called the tax assessor today and found out there isn't really much in the way of back taxes (only owe Q1 and Q2). Still trying to get more info on the foreclosure.
I am bored and browsing some other local properties:
MLS #2249864 (residential) I believe this is a pretty nice area, a cheapest house in an expensive neighborhood type place.
MLS #2281543 (commerical) - presently a gas station. I believe this lot is on a somewhat major intersection in the largest city (county seat). Near major highway (287).
MLS #2269562 (commerical) -
MLS #2253861 (commerical) - Presently a diner.
MLS #2226672 (commercial) - Looks like a decent space. Good parking situation, presently a gym?
I may check these out over the weekend.
I am bored and browsing some other local properties:
MLS #2249864 (residential) I believe this is a pretty nice area, a cheapest house in an expensive neighborhood type place.
MLS #2281543 (commerical) - presently a gas station. I believe this lot is on a somewhat major intersection in the largest city (county seat). Near major highway (287).
MLS #2269562 (commerical) -
MLS #2253861 (commerical) - Presently a diner.
MLS #2226672 (commercial) - Looks like a decent space. Good parking situation, presently a gym?
I may check these out over the weekend.
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I never replied to one only because RE in NY area is insane. Not much of it and there are TONS of buyers out there so why sell it?Now, in a lower income area in Austin and someone has lived there a long time and thinking about leaving? Better shot.
Draw back to my cousin's deal, half the cars he ended of getting, the owner's had similar reactions "never thought about selling my car but I've had it x years and I need y so why not?"
Battles
Footballguy
FIRST, let me say that HUD can and is a real pain in the ###. If I can find equal deals, I won't deal with HUD. Unfortunately, there are SOME great deals with HUD. Please don't think that buying all HUD homes is the path to success. They are really more of an obstacle to over come from time to time.That said, the Process on HUD is all about windows of opportunity. Most likely, they will open the bidding for the first X number of days to Owner Oc only. MANY sleazy RE investors work in groups, and buy them as Owner Oc, when they will never live there. You can buy a new Owner Oc HUD house every two years. Work with a couple of guys, and you can buy and flip them illegally much faster. It is illegal, and a Federal crime, although I have never even heard of anyone getting in trouble for it. Not that I don't know of anyone, but that I have never even Heard of it.Looks like I'll be making an offer on the HUD home. (I'll have to get the wife's approval tomorrow afternoon
Link
All hardwood floors, original claw foot tube in good condition, good woodwork, and overall it has good bones. It will need re-wiring, some leveling, some a/c work, some plumbing, sheetrocking, and new cabinets. I'm doing everything but the a/c work on my home, so I can save some labor money on this if necessary.
The property is held by Southwest Alliance of Asset Managers. What I understand there web site to be saying is that there is a 30 day initial listing period. During this period are they just collecting bids and the high bid at the end of 30days gets it? Does anyone have any experience they would like to pass on? Do I need to make a one time best offer?
Buying Process
I would say it needs 15k of work to be flipped or around 10k to be rented. The agent that walked me through confirmed that $800 rental or around 80k flipped were very realistic numbers.
You guys seem to come up with knowlegable info on everything, so I'd like to hear any thoughts and pointers you guys have now
It happens more than you think, and you WILL miss out on some deals because of investors that cheat the system for the sweetheart deal. At the end of the day, HUD wants to sell to Owner Oc. Even outside of the Owner Oc Window, you might bid a few grand higher but HUD gives it to the Owner Oc that bid less. Their first mission is to sell to Owner Ocs.
After the first window, you start looking at weekly windows. They run for 7 days, and take every bid. They DO NOT Counter, Ever. They either accept one, or move on. When I have seen them accept true low balls is when 3 or more investors have all low balled them, and they must feel that they are over priced. Doesn't happen often.
Lets assume that they don't accept your offer. You can either go back in the next window with a higher bid, or wait them out.
HUD will Continue to drop the price about every month on a property that doesn't sell. They will get down to $100.00 if that's what it takes to sell it. It is against the law, and the Charter of HUD for them to own property. They can only control property in a concerted effort to move it. It has to do with Anti-trust/Dust-bowl laws. Banks cannot own Keep property they repossess either, they are required by law to move the property.
Anyway, go back up, and assume that you are the one they select to sell it to:
THIS IS THE CASE where you NEED an experienced RE Agent. You will have to fill out about 11 pages of Material PERFECTLY, PERFECTLY. I knew a guy (Acquaintance) who was bidding against me for a Property. This was the guy that negotiated his agent to lower her commission to rock bottom (And I couldn't understand how he kept beating me
Anyway, this guy beat me in the first open Window, but Failed to get his middle name or something correct on one of the pages, and they bounced his deal, and reopened the window. The second time he beat me again, but failed to initial one of the pages, they called his Agent, and gave him 3 hours to re-fax with the initial. Since HUD is on the West coast, it was after hours, he didn't respond in time, they bounced it to the next window. The third week in a row that his new bid beat mine, HUD found out that he had bought an Owner Oc just a little while ago, and the bounced it back to a new window. The 4th week his new bid beat my new bid, he was able to prove that the last Owner Oc was exactly 2 years and 10 days ago, outside of the two year window (But remember that we were still in the two years when we started bidding). Even though we were in the Open Window, he was bidding as an Owner Oc to have greater leverage.
Sure, I should have bid more and not be moaing about it now, the timing wasn't great for me at the time.
Anyway, he finally beat me, bought a 4 plex worth $180K fixed up, RIGHT in the heart of where I operate. He bought it for $46K, promptly re-plumbed it (Shoddy incomplete job, just patched broken supply lines in the basement), dropped in 3 new Hot water heaters, did a TERRIBLE wall repair where the problem was squirrels were tearing the wall part from their nest on the outside where a Hole was, that the Squirrels have since torn open again. He put it back on the market at $120K within 3 weeks of closing, and it has sat there exactly like that for the past 13 months.
Empty, Abandoned, and certainly not an Owner Oc.
Thanks again Mike.My bid is getting bumped to next week due to the owner occupancy only period.I'm going into this with a lot of caution, so my bid is going to reflect that. If I get it great. If I don't, I can relax a little after getting my own house done.
I do think it's funny when people try to flip a place with poor workmanship. There are probably 10 of those in my town that have been on the market for over 6 months.
