Investing in Small Town America

This is the view from my office window, which could explain why we see life differently.

We live and work surrounded by cornfields. Its an hours drive to Home Depot/Lowes/Starbucks. We don't have a realtor on every corner and if you want to see 3 houses in a day, gas up the truck, pack a good lunch and don't forget a great flashlight because you'll have to see the first one or the third one, in the dark!

A laid back, country life-style is great, as long as you don't need to pursue a hot deal before next week, the 'mobile closer' can find you on GPS, and you won't flood for lack of a 39 cent part!

 Internet is iffy, cell calls never get dropped because they never connect and the two best forms of social media are STILL telegraph and tell a neighbor. If your truck breaks down half way to town word of your demise will get there long before you do!

In spite of (or because of) these drawbacks I've recently viewed SFR's listed between 3 and 15k. A LOT of them! We closed the latest project less than a week ago and my new dilemma is having to choose a replacement (or two). Since I do ALL the leg work and actual labor, my investors' only concern is where to stash the 20%+ profit.

Enough about me, enjoy the blog!

First time dealing with Fannie Mae

-Offer submitted: Monday, the 13th - $20,100 on a $19,900 ask. There IS another offer from a separate investor. waiting to hear from Fannie Mae...
Its almost noon, Tuesday. Nineteen nervous hours since the offer was submitted. Heart is pounding, breathing is labored. Checking email every three minutes, staring at my phone begging it to ring...
-Well, the phone rang and it was a bitter pill to swallow...although we offered MORE than the ask, we didn't offer enough! By law the realtor couldn't tell us what the price was, only that WE LOST. It was a free lesson, yet it cost us the house. It will alter the strategy for future offers. For one, we'll never 'pre arrange' a signing and tip our hand. We saw it on Friday and signed on Monday, giving the agent a heads up and time to 'arrange' another offer. On foreclosure deals, jump immediately and bring your highest/best offer. (When the closing became 'public records' we learned we were outbid by a couple hundred bucks.)

                                                                  ***

. Found another prospect. Called the realtor and asked for a viewing. Its NOT convenient for him to show it TODAY...said he'd call me tomorrow. 

The realtor called about noon, but the house went under contract, LAST NIGHT! Never got a chance to write an offer! 

Note to self-don't use a 'part time' realtor!

 ANOTHER lesson learned...

                                                                  ***

Drove all over two counties and saw about thirty properties. Most were 25k or less. The majority of phone calls went unanswered. Sometimes I'd get voice mail and they'd go unanswered as well...now granted, its winter in Illinois, but do ALL realtors take off until Spring? 

I may have made a startling discovery - Realtors almost always returned my calls if I would reference a high dollar listing of THEIRS. Once they'd call back I'd spring the low end stuff on them, as I had a 'captive audience'. Its almost as though each office has one throw away listing they use as a loss leader. YOU call about the great bargain and get a two second spiel on it, followed by twenty minutes of up sell to properties five times over your point price. Its almost like they get paid a commission.  ;)   So I used that to my advantage.

First I gave up on Fannie/Freddie deals and started looking toward bank REO's. While they can be a good deal there seems to be more value in buying one that CAN'T go fha and turn it into one that can...

My next post will begin a case in point.