Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
If memory serves me correct, this is not the first "shady appearance" from you. The last was you doing a short sale for a family member and then selling back to them if I am not mistaken.
There are tons of ways to make money in RE investing, no need to push the envelope into shady regions.
Just my opinion.
Real Estate Investor · Longmont, CO · Member since 2009 · 208 posts · 109 votes
16y
Before, people were flipping because of the crazy appreciation in the market, and nearly anyone could do it, selling at market price shortly after buying and doing some upgrades.
Now, people are flipping because of the crazy deals available in the market, and those that know what they are doing can still be extremely successful with a flipping strategy. They are buying very low and selling still below market after their rehab, in order to move the finished product. Rehab $ is much more carefully spent these days out of necessity.
My current rehab project was purchased with conventional fixed financing from a bank. No problems there.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
It's been tremendously easy to sell during the recent uptick in the market (tax credit, perceived improvement in the economy, etc). We've actually sold our entire inventory, and the last two properties sold for full price to the first buyers that walked through them.
As for buying, I focus on REOs, and it's been a bit tougher the past few months to get great deals. There has been a good amount of competition in my area from other investors and owner-occupants.
That said, the past week or two I've seen things get better. We already put two REOs under contract this week to flip, and will probably get at least 1 or 2 more before the end of the week.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
Impossible to answer that question with such little info.
What are your fees on the back end and front end transaction? How are you flipping (double close with transactional funding, adding buyer to contract, substitution of buyer, etc). These make a big difference in costs and therefore your bottom line.
From the numbers presented, $325 would leave little to no money for you. $300k may even be tight if you have to pay RE commissions. Did you find your own buyer? Is there any agents involved with a hand in the pot?
Like others have mentioned, banks just are not coming down from their BPO's right now, unless the DOM is at least 30 days.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
To answer the original question: Yes, deals are getting done every week for those who have been doing this for a living. The market environment has changed and made it harder but those who know the ropes still get it done.
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
16y
Hmann-
Will is right, there is too little info to answer your question. It really just depends.
If I do counter the bank I usually counter at 80% of their counter to me, as long as the spread will work at that counter. But I have accepted deals with their initial counter because it gave me a spread.
For example, the bank stated they would do an internal BPO if I countered, and to be honest I thought the internal BPO would come in higher than the external. Whomever did the external BPO did me a real favor, not too many deals come back with a spread automatically. So I took it and ran with it. I got lucky so to speak.
On the other instance, I have been going back and forth on a WF deal numberous times. I have even let the package expire and started from scratch again. My end buyers offer wasn't even high enough or I would have moved it. The bank had a ridiculous BPO so I wanted to restart.
I received approval today on a property that I'm just getting a negotiation fee. Lots of work, but I turned a dollar-less deal into a few thousand.
So, it just depends. Know your options and adapt to them.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
If memory serves me correct, this is not the first "shady appearance" from you. The last was you doing a short sale for a family member and then selling back to them if I am not mistaken.
There are tons of ways to make money in RE investing, no need to push the envelope into shady regions.
Just my opinion.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
Originally posted by G. F.:
Does the bank know that the offer they have received is from your cousin?
I don't know if short sales have a special stipulation, but in general, selling to a cousin would be considered an arms-length transaction. In fact, you could sell property to your brother/sister and not have to disclose.
Non-arms-length transactions are generally defined in real estate as transactions being spouses or being two people in the same lineage (father/son, grandfather/granddaughter, etc).
Again, perhaps short sales have different disclosure requirements that I don't know about, but in a typical transaction, what's outlined below is not anything that would need to be disclosed or put the deal at risk of not being an arms-length transaction.
The biggest question I would have is the dual agency agreement between listing agent and selling agent if they're both with the same brokerage. Make sure your broker is okay with the way the buyer and seller are being represented by "partners"...
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
16y
What I'm reading is that he is trying to flip the property AND act as the listing agent for the homeowner. This creates a conflict of interest in my mind. That is why I asked for an explantion to see what his intentions are with the property.
Collecting a listing commission is one thing.
Being a listing agent for a property with the intentions of only selling it to your cousin, who is represented by a business partner, so he can flip it and collect a larger profit is another thing.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
Originally posted by Justin S.:
Being a listing agent for a property with the intentions of only selling it to your cousin, who is represented by a business partner, so he can flip it and collect a larger profit is another thing.
If you replace "cousin" with "investor" and "partner" with "another licensed agent," it sounds like you wouldn't have an issue with this transaction.
And from the perspective of most real estate professionals (NAR, lenders, brokers, etc), the relationships here are inconsequential...as they all constitute arms-length transactions.
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
16y
Though this thread is a little of subject, I feel it is of importance to provide this information. If you have a partnership or formal business arrangement whereby your compensation is derived from or increased through profits, then read below:
I have been told at least three attorneys from three separate states, Florida, California, and Arizona that if your an agent representing an dependent party such as a buyer or seller, you cannot represent yourself too. This counters the fiduciary mission your sworn to uphold. You are in violation of the ethical standards upheld by your association.
You should not represent yourself (through a partnership or other formal business relationship) and a seller or buyer. If caught, the very least that might happen is you lose your license.
As for being related to the seller, if buyer is related to the seller, you need to check closely the term of the approval letter..
"The approved buyer(s) is/are non-relative.....
The above was pulled directly from an approval letter I received recently. Upon closing, you may be required by the title company to sign an affidavit attesting to the terms in the approval letter.
So, if your a buyer related to the seller, you may in fact be required to disclose this to the lender.
Real Estate Investor · NorCal, CA · Member since 2009 · 273 posts · 43 votes
16y
Originally posted by J Scott:
Originally posted by G. F.:
Does the bank know that the offer they have received is from your cousin?
I don't know if short sales have a special stipulation, but in general, selling to a cousin would be considered an arms-length transaction. In fact, you could sell property to your brother/sister and not have to disclose.
Non-arms-length transactions are generally defined in real estate as transactions being spouses or being two people in the same lineage (father/son, grandfather/granddaughter, etc).
Again, perhaps short sales have different disclosure requirements that I don't know about, but in a typical transaction, what's outlined below is not anything that would need to be disclosed or put the deal at risk of not being an arms-length transaction.
The biggest question I would have is the dual agency agreement between listing agent and selling agent if they're both with the same brokerage. Make sure your broker is okay with the way the buyer and seller are being represented by "partners"...
I'm not understanding why we're talking about "arms-length" in here. I'm not the homeowner, I'm the listing agent.