How are you making $$$ today?

General Real Estate Investing
16yFollow

How are you making $$$ today?

Chris Dunn
Member since 2010 · 4 posts · 0 votes

I think it would be cool for everyone who's actively
investing to talk about what their doing in this market and
what's wording today...

I'll start...

I've found the pre-foreclosure market to be a waste of
time. Every short-sale I've attempted in the past couple
years has gone to the wayside thanks to the lenders not
wanting to deal...

So, I'm curious if anyone is actually making money with
pre-foreclosures, auction sales, or REO's. Just like every
other "make-money" market, there seems to be a lot of hype
built around foreclosures, but I really haven't seen many
examples of people making a killing with them right now
(unless one has millions of liquid capital).

I've done a couple of wholesale deals this year, but it
seems like the people with equity in a house are few and
far between. Anyone have a different or similar
perspective on that?

For me, the most money this year has been in creating
extremely creative stuff with sellers, but the market has
become flooded with seller financing deals and it's getting
harder to find good buyers for even a "below market value
seller financing" offer...

I'd love to hear your opinions...

0Reply
79 views

Most Popular Reply

Vikram C.
Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes
16y

Chris, real estate is like anny other business. In order to succeed, you need one of more of the following:

1. Expertise / smarts
2. Willingness to work extremely hard
3. Lots of capital
4. Luck

I think any one of the above is good enough to make money in RE. If you have two or more, even better.

I come under category 3 and am making a reasonable return on my investment buying foreclosures. But if I had a lot less capital, I may be doing something else.

7Reply
See this reply in the discussion

37 Replies

Jump to latestLatest
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    I'm buying properties to hold long term. Currently looking primarily at distressed multi-family residential properties.

    3Reply
  • Chris Dunn
    OP
    Member since 2010 · 4 posts · 0 votes
    16y
    Originally posted by Charles Perkins:
    I'm buying properties to hold long term. Currently looking primarily at distressed multi-family residential properties.

    Sounds like a good strategy for this market... about how many units will you go for? Any reason why you like multi-family over SFR?

    0Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    I'm looking at 50 units this year and the same next year.

    0Reply
  • Vikram C.
    Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes
    16y

    Chris, real estate is like anny other business. In order to succeed, you need one of more of the following:

    1. Expertise / smarts
    2. Willingness to work extremely hard
    3. Lots of capital
    4. Luck

    I think any one of the above is good enough to make money in RE. If you have two or more, even better.

    I come under category 3 and am making a reasonable return on my investment buying foreclosures. But if I had a lot less capital, I may be doing something else.

    7Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    Vikram, I would agree with this assessment.

    I also believe that there are a number of investing skills that can help an investor employ several different strategies.

    A good understanding of the market
    Know how to find a deal
    Know a deal when you find it
    Have at least one exit strategy
    Have a team to assist where you lack skills or resources

    1Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    16y

    Chris,
    I think your observations are right in line with mine here in Indiana.

    I was just having this conversation Saturday with a new couple out our local REI meeting.
    One quick example: I put an offer in on a short sale SFH that was for sale at 43.9K. I offered a market rate of 22K which was actually a generous offer but reasonable considering the condition of the home. The bank countered at 42.9K. I did not even bother to counter. The house sold 9 months later as an REO for 18K.

    Here in Ft Wayne, the best deals are the REO's. With REO's so abundant and cheap, there is very little reason to spend time with other ventures like short sales. I see various investors buying REO's and then trying to wholesale them on craigslist. I am not sure why someone would pay the premium on craigslist when they can buy them cheaper as an REO.

    We have predominately bought REO's, rehabbed them, and held for rentals.

    We successfully completed one rehab and resell to an end user and are making an offer today on potential rehab #2. #1 went well but the key to rehabbing is buying the right house, at the right price, in the right location. There is definitely competition here for homes that can be purchased, rehabbed, and sold for a profit. We are offering 5K earnest, no contingencies, and a 5 day cash close to see if we can get the price we need. We'll see how the bank responds.

    I have not done this yet but there is a market for people wanting to buy homes on land contract or with seller financing. One downside is that you tie up a lot of cash to do this since banks are not interested in providing loans for low end rentals.

    Chris, what area of the country are you working?

    Chris Luithly-Fort Wayne

    2Reply
  • Vikram C.
    Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes
    16y

    Charles, I agree with you. In fact, those are the things I referred to in my "expertise" category.

    Chris, I comp over a thousand properties a month as part of my business. I see tons of SS having sold for extremely low prices - the kind of prices that I simply cannot get at the auctions. So somebody is making money on them, just not me or you or the OP. It may be like finding needles in haystacks but the opportunity does seem to be there.

    I do agree that REOs are probably the easier and quicker way to get a good deal.

    1Reply
  • Mark Yuschak
    Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
    16y

    In this market I've been using a two-part strategy.

    -- Acquiring more buy-and-hold properties for my rental portfolio.

    -- Continuing to purchase rehab flip properties.

    The mixed approach seems to be a real happy medium for me. 90% of my deals are REOs and a handful are private sellers looking to liquidate. The rehabs are generating the extra cash to acquire the buy-and-holds.

    In the past 30 days I've purchased a small six unit apartment building, two SFHs, and a rehab flip.

    Like everyone else, I have not had any luck with short sales. But, to be fair, I haven't given them much of a chance since I grow too impatient waiting for the banks to approve offers. Since I'm not working with a ton of capital, I tend to go after properties which have a quicker response rate.

    2Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    16y

    Mark,
    Sounds like you have had a very productive last 30 days!
    Keep up the great work.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    "How are you making $$$ today?"
    I am spending far less time on teh computer here and more in the field, hence my absence from BP. I specialize in retail flipping REO properties I acquire most often before they ever hit the MLS. In my experience, REO purchases are by far the way to go here in SO CAL as short pays take too long, have smaller chances of success, and the time and energy (and expense) you must put into them is often wasted by the bank's unwillingness to play ball. This is for many reasons which include (but not limited to) PMI insurance - why take a loss with a short if they can collect insurance, lack of proper systems - letting short pays not get pushed through and end up taking far less via REO (God only knows why this occurrs), and sometimes taking a loss via REO is more beneficial to the lender (note holder) than approving a short pay.

    My goal was to flip 25 properties this year and so far, I have done 12 with several more in the pipeline. I may fall short of my goal, but it was set in the clouds so I am happy with my results. In most cases, I make a net profit (before taxes) of $50k here in CA and my average acquisition prices are between $200k and $350k, with some slightly below and some above.

    I have my own cash which is a huge advantage but I also use a ton of private funds which puts me over the top of my competition. I can lock up contracts for multiple homes at one time and show POF's to close.

    This strategy is certainly not hype but real, the only question is, does the individual have what it takes to succeeed which was laid out above in another post (although I would not agree to have "luck" as one of the possible options - save that for Vegas) I make money with knowledge, experience, know-how, a great team, money (that of my own and others) and the willigness and ability to work my tail off.

    Not sure about all states, but certainly here in CA you can make a killing if you know what you are doing.

    Best wishes to all for a prosperous investment(s).

    Will Barnard

    Podcast Guest on Show #130
    1Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    16y

    Haven't been active here much lately because it's been a busy summer. I'm doing nothing but buying dirt cheap rental properties, making them bomb proof (figuratively speaking), then renting them out as some of the lowest cost rentals on the market. I can't buy enough property to keep up with the demand.

    People are watching pennies and there's money to be made in saving them 25-50 bucks a month. Throw out the old ideas of raising rents. Cheapen your acquisitions instead.

    2Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    Thats good advice Tim. Beat your competition in rental price but buying smarter!

    Still considering a move to my backyard?

    Podcast Guest on Show #130
    0Reply
  • Nick J.
    Residential Real Estate Broker · Payson, AZ · Member since 2009 · 3k+ posts · 1k+ votes
    16y

    HOLY COW!!!!

    Welcome back brutha from anutha mutha

    0Reply
  • Mike McKinzie
    Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
    16y

    Right now it is just rental income. Demand is high as good, middle class folks who lost their homes to foreclosure still want to live in a middle class neighborhood. I have bought more properties this year, bring my rental total to 30 units. Personally, I don't like the cheap purchase/cheap rent market, my average rent on the five I bought this year is about $1,400 a month. My gross scheduled rent on the 30 units is $26,000 a month. My 10 units in the Fresno area average $700 a month, so I do own a few lower middle class rentals (which I hate due to tenant damage, higher vacancy rates and poor neighborhoods).

    Having a full time job as a Finance Director doesn't give me the time to flip but I am "retiring" October 1, 2010 so I may explore doing that next year. I will be moving back to Orange County and will be working the Orange and Riverside County markets as I have a LOT of Realtor Contacts in that area.

    3Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y
    Originally posted by motiv8td:
    HOLY COW!!!!

    Welcome back brutha from anutha mutha
    Thank you, wish I had more time to keep it consistant like I was before.

    Hey Mike M, out of curiosity, for your $1400 gross rental income units, what is your PITI (approx)? I still don't see the value here in CA for buy and hold, so I would like to see your side as an experienced buy and holder here in CA.

    Thanks in advance,

    Will

    Podcast Guest on Show #130
    0Reply
  • Mike McKinzie
    Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
    16y

    Will
    My five I bought this year are not in California, they are in Texas, Arizona and Oklahoma. Also, I paid all cash for them, so there is no PITI. Here are the numbers:
    Property A: Rent $1,600
    Property B: Rent $1,500
    Property C: Rent $1,100
    Property D: Rent $1,295
    Property E: Rent $1,195
    Currently, the average is $1,338 but 3 of the leases are up at the end of the year and the average will be about $1,400.

    I paid exactly, and I do mean EXACTLY $700,000 for all five. My return is not any where near what others achieve here on BP, but all five of these houses are less than 5 years old, are in booming areas and are houses that I would personally live in and be happy. How does that MasterCard commercial go? Sleeping soundly while owning rental Real Estate - PRICELESS! Some things money (or returns) can't buy!!

    0Reply
  • Jackie Patterson
    Real Estate Investor · Kalamazoo, MI · Member since 2010 · 681 posts · 241 votes
    16y
    Originally posted by Vikram C.:
    I see tons of SS having sold for extremely low prices - the kind of prices that I simply cannot get at the auctions. So somebody is making money on them, just not me or you or the OP. It may be like finding needles in haystacks but the opportunity does seem to be there.

    We're making money on short sales....all over the nation. I see several posters saying they have no success with short sales, or that it takes too long. The secret is having several going at one time, and continuing to put them into the pipeline so that they keep coming out the other side! You also need a GREAT negotiator that knows how to negotiate the low prices, get line item #10 removed, etc. Anyone that is interested, we will be happy to take short sales you run across and pay you a percent of our profit! Don't waste an opportunity to add to your income!

    1Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    16y
    Originally posted by nationwidepi:
    Thats good advice Tim. Beat your competition in rental price but buying smarter!

    Still considering a move to my backyard?


    Wow, this thread has become the resurrection thread.....lol.

    Gotta be honest. After some serious thought I figured out I was thinking with my lower brain rather than my upper brain so I refocused. Since then I got a scholarship offer to law school so I'm going to knock that out over the next couple years then set up shop in Nevada. The plan is to focus on real estate and helping clients be invisible and hide money.
    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    16y

    Thats great Tim, good for you.
    You always have the option of the visits for the eye candy and you happen to have a friend over here.

    Will

    Podcast Guest on Show #130
    0Reply
  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    16y

    Same to you Will. In 3 years when I'm done with school and moved out there, it's an open invitation to hang in Vegas anytime.

    0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    16y

    I invest my money and my clients' money in short term high yield mortgage notes and both income producing commercial properties yielding 12 cap with appreciation potential or land purchased at 25% of previous sale value.

    I basically am doing the same thing as I have been doing the last 10 years except that my criteria has become a lot stricter.

    The rare buy that results in a quick large resale profit remain an elusive animal for me. I seem to be able to put these types together about once evey 3-5 years. Working on a couple now but whether they come to fruition is anyones guess. I place these in a seperate category "Not probable, but if they hit potentially very profitable". Nothing that you want to count on to pay the rent!

    Private Mortgage Financing Partners, LLC
    WebsiteView Page
    0Reply
  • Bryan Hancock
    Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
    16y

    We have done several flips this year and are finding it very hard to move property. i decided to take a job building unmanned aerial vehicle drones for the time being.

    I am also raising money for distressed asset opportunities via Bullseye Capital's Distressed Fund I with Joel Block and a handful of other successful investors across The States. The fund will focus on buying and selling quickly instead of a more typical 5-yearish syndication arrangement.

    0Reply
  • Matthew Underwood
    Foreclosure Specialist · Lansing, MI · Member since 2010 · 13 posts · 4 votes
    16y

    In this market fix and flipping is a diificult business, but deffinatley still do able. I use a few different strategies.

    1. Buy small bulk- 5-10 homes at a time from a wholesaler or investment group. Always do extremely thorough due dillingence and set a strict per home budget. For example I average $2500 in repairs per home on a general 10 home purchase. You want to make these homes livable and thats it. Post multiple craigslist ads offering the home with a low $1000-$3000 down payment depending on the area. Always have a payment of less than $499 dollars per month on a 15-30 year land contract. My general interest rate is around 9%. You're not only making a huge profit over time but your also allowing people to purchase a home cheaper than they could rent one. Why would they default?

    2. If you need to cash out on every deal I suggest multi-families. If they are distressed and need work you can buy them for pennies. Do the work, register them as a rental with the local jurisdiction(if required), and sell them as a cash flowing property. I'm closing a deal September 15th on a 2 unit that I paid 18k for had 9k in renovations and produces $1300 per month. The contracted price after 2 months on the market is $64,900, the best part being that the rent has taken care of my taxes and insurance and actually put a little extra spending money in my pocket.

    Right now cash/conventional sales on fix/flip SFR's is hard to do. Last one I approached this way took 9 months to sell. Worth the 30k profit, NO, because I could have tripled that if I would have had the capitol available.

    Also focus on niche markets. Ex: popular rural areas, areas with government funded re-development and propeties near colleges, prisons, government offices...anything that would have a positive economic effect in the area.

    Always hire your own staff, why pay the owner of a company to employ staff for you? and with the way the economy is experienced construction related help is cheap. I pay my plumber $14 per hour and my 2 "handymen" $8 and believe me, work being as scarce as it is they are more than happy to work at that rate.

    This is my strategy and it seems to work but to each his own.

    Good Luck, Matt

    0Reply
  • Mark Yuschak
    Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
    16y

    The comments about this being a difficult market to flip in are interesting. I'm finding exactly the opposite in my flipping business. I have very specific criteria (one of which buying houses which are desireable for an end buyer) before even buying a property. Making the improvements which are desired for buyers in my market greatly help. Finally, pricing them right is the key.

    IMO, pricing is everything. The rest is icing on the cake.

    For example, my last flip I had sold in 3 days. After we had a contract, I had 2 backup offers for over asking price.

    I believe any market can be good for flipping. There will be distressed properties in any economy with motivated sellers. And there will be retail buyers in any economy.

    5Reply
  • Account Closed
    Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
    16y

    hey mark, it sounds like you've been busy!! in the last month i've closed on a SFR that was rehabbed in 2 weeks and rented out the first weekend it was available, taken 2 other SFR rentals subject to from a burnt out landlord, closed on a 10 unit building where we are about halfway done with the rehab (it's mostly rehabbing tenants and getting rid of property manager--not so much painting, etc) and just got a flip SFR under contract this week. I also changed insurance companies for everything (hey that's a lot of paperwork!)

    As to what I'm doing today to make money, I'm currenlty networking as much as possible to meet hardmoney/private lenders as I see some good potential rehabs on the market and I'd like to eventually have a few flips going on at once. Also, the 1st is coming up soon, so I look forward to my rent checks :D

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free