All Forum Posts by: Scott Hubbard

As much as I'd to apply the 50% rule, it is just not practical in my market. Therefore, I look for properties that have CoC of more than 6%. I also look in the middle class neighborhoods for properties. Slumlords have to apply agressive parameters because the market forces them too.

I can find homes with newer appliances, AC's, water heaters, and flooring at 30 - 40% below FMV. I put 0 - 10% down and lease option them for 10 -20% above fair market rental rates.

My goals are different from many of you. I do not wish to be a professional landlord. Rather, I look for opportunites in the short sale and foreclosure markets and assign deals to other landlords or flippers. I keep the best deals for myself.

My belief is, with all the people losing their homes, your average bread and butter rental in a good neighborhood with good schools will be in higher demand for the forseeable future.

Originally posted by dmj4:

We are the seller (hopefully). The property has dropped in value. Recently, one sold furnished for $190K and the one before that sold empty for $177K. I think there has been another offer on one for $205K.
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Our loan has been picked up by Chase from WAMU. We had called WAMU before the take-over about a Short Sale. We called WAMU/Chase again the other day and they told us to put it on the market. They are still in a transition phase.

My advice, find an investor (preferably through the REIA network) with short sale negotiation experience. Have him/her provide you with actual working files or closed files showing the actual proposal submitted. That way, you know they will be effective based on past success.

Personally, I locate homeowners who are looking to do a short sale, I draw up a sales contract with a short sale addendum directly with the homeowner, then put a proposal together. Within the proposal should be a hardship letter, financial statement, area comps, any negative market and neighborhood data, pictures of any house issues, and the proposed sale price. I also include a release of information form which permits me to negotiate directly with the lender. That way, I can speed up the process myself (when necessary).

Most of the time, the lender will require the home be listed. In this case, I have the homeowner use my agent and list the property for FMV. Eventually through negotiations, the lender will arrive at a bottomline price. Since I try to negotiate the lowest price possible, I have the lender agree to a deficiency judgement waiver against the homeowner.

If the price is too high for my investment strategy, the homeowner still benefits because they now know the price to list the home for.

Lenders are business people, so you need to be one too. Good Luck!!

I disagree greatly with this statement.

For one, short sales will continue in great numbers because property values will continue to fall well into 2010. Remember 5 year arms? Well, you will remember them when they are set to adjust again in March.

Second, the premise behind loan modifications are that people can afford a lower payment. Well Mr. or Ms. Politician, many homeowners will not choose to pay for a home that is worth less than 40% of what they owe. Loan mods are just that, modifications, they do not address the core problem. Devaluation!!

Third, the economy will likely become much worse. Earnings will disapoint Wall Street which will call for more layoffs over the next two or three quarters.

Fourth, 401k's, pensions, stock portfolios have taken major hits of 30% or more in recent weks. Baby boomers are too close to retirement to gamble whats left of their next eggs. Second homes will no longer be practical. They may choose to stay instead of retiring to Florida, Arizona, or California.

Finally, one of the priorities of the Federal Reserve is to stabilize housing. Empty and abandoned homes are a drain on the system and I know in my community that we have a surplus of homes in limbo. Taxes are not being paid and rents are not being collected. Lenders have been dragging their feet and we have yet to see the full effect of all the foreclosed and pre-foreclosed homes hit the market. I expect inventory in my city to grow or stay flat.

As long as inventory stays high and prices continue to fall, short sales will continue to give investors opportunites.

I have a short sale offer where the lender is PMAC out of Chino Hills California. I am looking for anyone who has had an offer into them. Please leave any feedback.

Wholesalers-

If you come across leads with no equity in Arizona and the seller is motivated, I am willing to work something out with you!

Thanks

If your wholesaling with an assignment contract, your end-buyer should have to also give earnest money. In my contracts I always ask for more earnest money than I put in myself, that way, it covers some of your carrying costs and due diligence related costs.

What works for me, is using my real estate investment group for buyers, craigslist, and talk with RE agents in your area.

For the most part, yes! Of course it varies depending on the FMV of the property.

Buy and hold investors will focus in on properties with at least a 20% discount. Flippers are usually 35% or more.

I have been able to get an absentee owner short sale approved and can help.

If this property is listed, you can get a letter from the listing agent noting that the owner is not cooperative.

If the property is not listed, then your going to need the seller to sign a listing agreement and at the same time explain the he or she will need a hardship letter. I would have one you typed yourself and just have the seller sign it.

Make it generic with the main point being that he or she cannot afford to make payments and is having personal health issues.

I find banks are flexible with w2's and pay stubs if the hardship letter is dramatic enough.

dmj4- I run into a lot of investors who are in your position. I belong to an investment club and am asked to buy them out. Now, with short sales, I can get 30 to 40 percent off of FMV, so after I tell them my offer, they usually cringe and say no way.

Caitlyn is right, your better off selling short and live to fight another day. There is an opportunity of a lifetime in real esate today. It is doubtful that any of us will ever get this chance again to buy real estate at such discounts. The other day I bought a 2 year old home for 68 dollars a square foot!! That is 25% below replacement value.

I tell you this because you should be thinking about particpating in making new money not trying to count lost money!!