You can no longer get any sort of deal on the MLS Period!! I have been at it for 3mo and have used the basic investor formulas for offer 65-70% of ARV minus repairs, and Nothing, Nadda!! The Banks are INSANE on their BPO valuations. I live in west central Florida, "Foreclosure Central", these houses have been destroyed, Vacant for years, everyone needs a roof, roofs are leaking, cielings are falling in, Pools are wrecked , Kitchens are soooo outdated and these jackbutt Banks are listing them priced move in ready!!! I am Sick of it!!! I know what I need to do, Spend $$$$ on off market stuff, but that is not going to happen due to $$$$ not in my pocket to spend on that.. I need to do some deals ..........What are your thoughts on this????? Why are the banks pricing these things so high, they got their Bailout for goodness sakes!!!
I wouldn't call it dead. It just varies with how dumb other people are buying...I bought two last year out of MLS. Both full price offers the day they hit. The year before I probably made 150 offers and got laughed at on just about every one and didnt get a single one because the hedge funds were paying retail less repairs for everything in sight. In 2012 you could buy them at 65% less repairs out of the MLS all day long here in Atlanta. The gurus are coming back strong and the TV shows dont use real numbers and make people think this stuff is easy so people are going to agents and buying at numbers that dont work and getting expensive lessons.
I'm curious how many offers you've made in that 3 month period? I haven't been trying hard lately, but when I was it would take 40-50 at my numbers to get one that had the correct motivation to even counter. Not sure what they do in Florida, but around here the banks usually price it high and reduce it so much at a time until they get a buyer. Every once in a while they'll throw one out at the right price to move it fast and it goes fast with multiple bids. Keep in mind, just because a bank owns it doesn't mean they're a motivated seller. They'll dump them when they sit on the books too long, but if its early, they are just going through the motions. Sometimes they dont realize what they had and misprice it, though. The last one I bought had an apartment built on the back and a garage converted to living space so they priced it about 800 sq/ft smaller than it was/is.
So what's your angle? You dont have money to market so you are you trying to wholesale by making offers through MLS? That may work once in a while, but thats not what wholesaling really is. If you bring me a house in my county that was on MLS and needed work, I will have already seen it and probably made an offer...
its a new day.. someone is paying more and working on smaller margins..
Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222
@FRANK DARIENZO It is not 2010. In a seller's market, sit on the sidelines or do some serious work. Don't *****. And the banks paid back 7 years ago.
I believe, and please anyone correct me if I'm wrong, but the banks can show they own a 200k asset on their books, for example, making their numbers look better. But if they sell it for 100k, they would then have to show a loss. Multiply that loss by the number of REOs they have and they have problems!!
GAAP now allows them to no longer use "mark to market" thereby hiding losses.
Welcome anyone with a better or different understanding to chime right in!!
People who buy on the MLS are not dumb. They are retail buyers made up of homeowners. And the MLS is one of the biggest places to market property for sale, if you are a broker. True, you won't find deals at 30% off. Sounds like you need to start knocking on doors to find motivated sellers. Banks are not clearing their books like in 2010. Those days are over.
@Eva Salas The "problems" were 5-8 years ago. Read the Fannie Mae 10-K and realize this whole thread/topic is very outdated. Fannie is profitable and paid back it's bailout with interest and the people still own warrants. The "new book" of business is strong and the large writeoffs were on problem loans about a decade old now.
I got a property under contract yesterday that was on MLS. My contract is only 21.4% below list. I guess that doesn't count.
Frank, you need yo adjust your formula. I've done over 20 deals off the MLS here in Orlando in 2015 alone and have 4 set to close next month. If you use the 65%-70% minus repairs rule you'll never find any deals in Central Florida. Learn your market and you'll find the deals.
Did you look in the 30% off section of the mls(kidding). The mls is one tool to find properties and it gives a ton of information as mentioned before you might have to make 40-50-100 offers to get one . Direct marketing ,craig list , bandit signs,driving for dollars, sights like https://www.propertyradar.com/ etc are just some of the ways that go into finding a deal . If it was easy ,altogether now" Everyone will be doing it"
Guys, I get it The MLS is only one area to find properties. My issue is whoever these banks, Fannie, Freddie etc.. are sending over to the properties to get a valuation are smoking crack!!! Look avg 3 bed 2ba 1500sq ft house sells for 115k on the best day right now in my market..... These homes THAT ARE PRICED 10% under full market need 15-25k in updates and repairs. They are not taking into account the property condition, and a family don't want it, and an investor sure as hell won't pay 95k for a 115k house that needs 20k in help!!! SOOO BACK TO MY HEADLINE "THE MLS IS DEAD"!!!!
Who was smoking crack when these homes sold for double the price with multiple offers? Fanny and freddie sell millions of homes thru bulk sales and the few that filter down to the mls are retail priced in a tight market with low inventory and high demand Homes under 150k are very competitive because the mortgage payments are cheaper then most people rents .
Christian so you are doing volume.
How much margin are you averaging per deal for 2015??
You are reselling to a long term rental investor or keeping yourself??
It is harder to find deals not only on the MLS but from private sellers as well. As you noticed the price of foreclosures on the MLS are grossly overvalued and they are in no condition to be financed. The only buyer is the cash buyer so why won't the banks unload these homes to investors? I stopped trying to figure that out and increased my marketing. I am having relatively good results so far. My suggestion would be to still keep an eye on the MLS (it is not dead, you were a bit emotional) but shift your focus to direct marketing. We all have to work a little harder. But the profits are still there...
The banks are marking them up because the public is buying them. Most of the REI community is not diversified so they can't jump to another vehicle when the market shifts. Overpaying for assets and then losing money is how natural selection reduces the size of the pool of real estate investors at the top of the market cycle.
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