All Forum Posts by: Brian Burke

You should have an attorney review the lawsuit and advise you on how the allegations in the case would effect you. It might be that there is a Lis Pendens now but the title company will clear it prior to closing. Or, it might be that the title company is going to list the Lis Pendens as an exception to the title policy and the defense of the suit will become your problem. Don't take a risk on this one, have it thoroughly reviewed by counsel so you can make an educated decision.

As an example, I have one of these right now, and it's been almost two years and over $30K in legal fees and we don't even have a trial date yet. We'll still make money on it but as it turns out its a bigger distraction than I really need right now.

Happy to help, Nadine, but I can't take any credit. Steven's answer was much better than mine! It's great to see an actual tax guy on the forums answering questions. This site never ceases to amaze me!

Dale, correct me if you see something I don't see. The way I read this aligns with what I see here in CA as actual practice: you don't have to belong to the Association of Realtors to have MLS access, but you still have to hold an active real estate license (or be an unlicensed assistant employed by a licensee, or a licensed appraiser).

You assume correctly that ARV and assessed value aren't the same thing. You need to see SOLD prices on similar units within the same complex. Comps from within the same complex are important because differences in dues structure and the stability of the HOA can cause similar units in neighboring complexes to sell for wildly different prices.

I wouldn't expect 100% financing, that is more myth than reality. Your best bet is conventional financing if you can get it. I can't comment about the availability of loans that small, I don't operate in that price range. I'm sure someone with experience in that realm can chime in with some feedback on that.

Good luck!

You're welcome. Check with your tax advisor, but I believe that you can file seperately this year, then go back to filing jointly after this is all said and done.

Go to the local foreclosure auction at the courthouse steps. The serious buyers, with cash, will be there. Introduce yourself. Don't be surprised if you don't get a hero's welcome at first. These guys have seen hundreds of wholesalers come and go. If you are consistent, and bring a great deal with you to pass around, some of them will warm up to you. Your reputation will develop if your deals are good.

One reason for the declining value (besides the overall market) is that the HOA might have fallen out of compliance with lending guidelines. This can happen when a certain percentage of owners are not paying their dues, or are investors.

The amount of the dues are critical, as well as any potential special assessments to keep the HOA afloat if they are going broke or plan to do a renovation project and have no reserves. You have to subtract the HOA dues from your expected rent to get a true picture of the return.

If the return looks good despite the HOA dues, this might be a good deal if you are able to obtain financing. At some point in the future, prices will go up, and if the HOA is out of compliance, at some point they are likely to regain compliance and when they do values will go up as a result. The question is whether you plan to hold on that long, and whether there are any better opportunities available to you.

All you can do is put your best offer forward, and let the chips fall where they may. If you are planning to live in it, discount isn't as large of a consideration so perhaps you can play to the seller's greed and make a strong offer price-wise. You might look to the private financing option if that is available to owner occupants in your area.

Your lender will look to the appraisal to establish the condition of the property. If the appraisal says that there is a bunch of stuff wrong with the house, they will most likely either require that those items be corrected prior to closing (not going to happen) or deny the loan.

The bank that owns the property is most likely aware of the condition of the house, and they know that a buyer with financing is going to have that problem so they will favor cash offers or offers with such high down payments that the buyer's lender might look the other way.

You might try private money financing. You can typically obtain this at 70% LTV and property condition items such as you described will usually be tolerated so long as you can demonstrate a plan and the ability to remedy them. That type of financing is more expensive, but it might get the deal done and you can refinance out later.

As to your question about whether REOs are all cash, Wayne Brooks and Jon Holdman are absolutely correct, cash is not a requirement. My question to you, is this an investment or do you plan to live in it? If it's an investment, you need to buy at a discount to market value in order to make a profit, and cash gives you better odds of obtaining that discount. For example, we just bought a property listed for $471,000 that is worth $625,000 after it's fixed up. The property had two offers besides ours, one for full price, and one for $500,000. Our offer was accepted...our offer price was $450,000 cash. The other offers were financed. If we were proposing to finance, do you think we would have gotten this deal?

When I first started, I used comps from First American. That worked OK back then when there wasn't as much competition (early 1990s). Then I got MLS access, and that changed everything. I had no idea how much information I was missing out on while using title company comps.

You can use a service like Realquest which (in disclosure states) shows you actual sold prices. What you don't see is whether there were credits or concessions, agent remarks about property condition, and photos of the interior of the comps. It's hard to come up with your ARV if you don't know what you are comparing to.

If you are planning to make this a hobby, keep your expenses low and use whatever free or cheap resources you can find. If you are planning to do this to make money, make the investment to get the data that gives you the best chance of success. The last thing you need is to be at a disadvantage because you have poor data while your competition has good data.