All Forum Posts by: Account Closed

Most conventional banks won't lend on foreclosures (none that I know of). In my experience, you have to use all cash or hard money lender (same as cash). Don't be afraid of hard money lenders, there are some good ones. Yes, you will pay a higher int rate for 6-12 mos, but then refi into conventional. They are a great resource. I use Sherman Bridge but Lima One, etc. are all reputable.

@Keith Perkins it's possible for a few of the houses, but not all of them. I've bid on probably over 30 houses this year and they've gone for well above any number that makes investing sense. Feeling like the platform is getting too crowded.

Does it feel like auction.com has now become a platform for inexperienced buyers/investors?  I've used the site successfully the last 3 years, but noticed something changed this year.  Bidders are submitting bids immediately when house comes onto auction, even though there are three days left.  Bidders are actually driving the price way above any number that would make sense for a buy and hold investor, or even to flip. These are becoming very skinny deals that aren't worth it.  Is anyone else noticing it, especially this year (2019)?  I purchased 3 houses last year from auction.com (fantastic deals), and this year have bid on many, but have yet to win one.  Feels like it is now crowded with people who don't understand the process (hint: wait until last 15 minutes or even 3 minutes before auction ends to bid) and are driving prices up, which is what auction.com and banks want.

Hard money lenders don't need to be in your state. They can be located anywhere--you just need to confirm they will loan on property in your state.

@Kerry Baird I use Hurst and they do not do HELOCS on rentals.  Only cash out refi's and it takes months.

I use it as well doing initial research, but also use realtor.com, redfin.com, etc. to see if there are recent or active rental comps near the address I'm researching. Rentometer varies widely, but does give you an idea what has rented the past year and if you're asking rent is in range. I also ask my prop mgr or realtor to pull MLS rental comps if I'm serious about buying the property.

@Ben Dean a conventional lender won't lend on an auction property, or 'distress' property at least in my experience. HMLs go into this deal knowing the property needs some updates (cosmetic or more) to achieve that ARV and are expecting it. A conventional lender won't care.

For taxes it matters where your primary residence is (where you file taxes), not the LLCs. I used to live in SF and have all my rentals in TX, but paid CA taxes on any rental income even though property (and LLC) was in TX. Could not wait to get out of California.

@Jay Hinrichs great points as always.  Agreed on the reserves and leverage. I'm testing different areas of Houston and as mentioned, the Willis house was a gamble to buy as a rental.  It's potentially too far north however a developing area on Lake Conroe w/easy commute to the Woodlands, but it's not a rental market yet (for SFRs).

The problem with the other house is as you stated, it's priced right but the neighborhood had way to many SFR rentals that were once owner occupied. Great school district, nice area in Tomball, but saturated with SFR rentals. And that's why it's lingering on the market. I bought the house in early 2016 and it rented within a week...go figure.

@Jay Hinrichs @Jordan Decuir I was referring to the area of the market report that mentioned rental activity, not rental prices (although those are down by 4%):

Activity among lease properties was down sharply in September. Single-family home rentals fell 35.4 percent while leases of townhomes and condominiums dropped 44.5 percent. With the decline in volume came a decline in rents. The average rent for single-family homes slid 4.0 percent to $1,812 while the average rent for townhomes and condominiums dipped 1.0 percent to $1,584.

I had 5 single family homes on the market for rent at the same time that sat...and sat. Finally one rented in Sept and two others rented last month. I still have two vacant--one has been listed for 5 months competitively priced at $1500/mo (have been decreasing asking rent each month). The other house in Willis has been listed for rent for 90 days, no takers. We just listed it for sale or rent last week, and buyer activity increased--we may have an offer this week. I just purchased this house in July at auction and  didn't think I'd be in the flipping game again, but it's a decent option at this point.  I'm still pro Houston but this year was tough.