Originally posted by David Betz:
So myself and a friend are looking at buying homes from the trustee sales here in OC and LA county. We have met quite a few people who would be glad to use our money and split the deals 50/50. We don't want to do that.
Here is the good news:
From what I could gather from a gentlemen who buys about 10 properties a month, he is ending up with about $30000 (gross) after he rehabs/sells them. His target is SFR with an ARV 400K give or take. This seems reasonable. Buy for 300K, rehab for $10-25K, and expect 10% to go to commission/closing costs/etc.. These are nice looking homes in decent areas.
I can see the reports on ForeclosureRadar listing what has sold each day at each auction, and we have been standing around watching and writing down the daily history as well. We have driven by many of the sold properties, and done comps on them (no, not on zillow). The deals are there. Period.
Here is the bad news:
Everyone I talk to tells me, "I am going to lose my shirt. I am inexperienced and over my head. Or I am wasting my time trying to find a needle in a haystack (yes, I know almost every one gets cancelled or postponed.) There are no deals or too much competition. There will be some hidden lien that will wipe us out because we are noobs. REO's are a better way to go."
There is a piece or two of the puzzle we've yet to figure out. How do we accurately review title on the MASSIVE # of homes we have to inspect and keep in our database? There are plenty of sites where you can get basic title info, but we are obviously nervous about missing something. There just isn't time to go to the county and look up records on all these places. And there certainly isn't money there to pay title companies for the job. There are just too many properties!
OR
Do we need to get smarter about this and just pony up the dough for title research on a select number of houses, after calling the trustee just before (or on the morning of) the sale date? In the hopes, of course, of having a higher ratio of houses we can bid on? In other words, do all the driving, inspection, and comp work on tons of homes, but only pay for title research on a select few that are more likely to be sold that day.
The fact of the matter is that the same people are at the sales every day, and they aren't there if they are losing money. The answers are out there, we just don't have them all quite yet. Any input is appreciated, even if I file it under the "bad news" column.
Thank you,
David
David, have you bought at a trustee sale yet? What's your opinion on it because the chaos? I know in OC, there's an investor who has a group of investors and purchase almost 10 every time he's there!
