All Forum Posts by: Steve L.

We buy properties in California and we have bought 5-8+ this year that meet the 50% rule... 3 or 4 meet the 50% / 2% rule. But we are buying quite a bit under market value. All the properties need extensive repairs.

The no brainer, that I am a little discourage I dumped... 45k purchase price, the guy we sold it too had it rented at 950/mo within 7 days and after $1k of repairs. In a pretty good neighborhood.

Previous Sales:
01/19/2007: $280,000
09/14/2004: $180,000
05/31/2002: $100,000
05/05/2000: $76,000

In my opinion this property will see solid appreciation. But if it meets 50%/2% rule appreciation doesn't really matter.

I assume in your area Sacramento and Stockton have a lot of properties that can cash flow.

San Bernardino has a lot of investors snatching stuff up and trying to rent it. So competition is heavy, and rents are contracting. But it depends on the area of San Bernardino.

Moreno Valley seems to have some deals, but prices have really dropped on everything.

Try putting a for sale sign up, we get a lot of calls with people trying to rent from our for sale signs.

Have you tried listing it in the Rent Section of the MLS? You have to pay a commission though.

Aweber is pretty good. They force double opt-in though, which sucks.

Very slick interface... beats Constant Contact in my opinion.

I don't know if REDC uses shill bidding. They might, but their marketing effort is HUGE. Billboard, mailers, signs, etc.

For Southern California, after going to an REDC auction, with enough money to buy 5 houses, we decided we'd want REDC to sell our houses. The prices where inflated in a huge way.

Waste of time for an investor...

Terry -

If those numbers are right, why not put one under contract and wholesale it to a landlord. Or if there is a market, fix and flip the 4-unit to a possible owner-occupant, or investor.

This will put additional cash in your pocket and help you gain experience. Most of my wholesale buyers, buy for rentals.

We did a very similar project with a SFH and duplex on the same lot, wholesaled it and it was one of our most profitable deals.

Gary - private investors are typically cheaper for flash funding.

A transaction that size you're looking at a minimum of 2 points and some processing fees.

Discuss your options with escrow officer, in some states they let you use the closing parties funds to fund both escrows. How is your buyer going to get financing?

Yes, you could.

Double Closing rules depend a lot of states though. In some states Title has to be in your name for 24 hrs (ie: you need to bring 180k to escrow and close with your funds). In other states, Title does need to be in your name at all.

The bigger issue you will have is timing. If you wait out a typical 20-30 day escrow with a buyer and they fall-out you still are on the hook with this deal/

Get some REO's in the area from banks at good prices. If you do BPO's for banks they sometimes give you listings.

If you find great deals you can be my buyers agent on those deals.

CraigsList is a good source too.

I think people over think this. You want to go wherever you can find a legitimate deal. Sometimes that means it's the worst house on the block, other times it means the bank want's to unload a decent looking property.

The banks pricing seems to have very little to do with logic and more to do with what they have "in" a house. Chase the deals, start with a 10 mile circle that will become your "housing farm." Once you become an expert, buy anything you can make money on in your farm.

The main reason people chase these properties.
1. Banks typically will not loan on badly damaged or trashed properties. If the kitchen is gone, most conventional loan buyers cannot get a loan.
2. Investors can gain some sweat equity by doing some of the rehabing themselves.
3. Since you are already doing work to the property you can modernize without spending too much money. (IE: Since your painting anyways, scraping the popcorn off the ceilings only adds a bit of labor).
4. Desirable neighborhoods sell faster. But really you should pick your market and work off of ARV instead. Try to buy stuff that is normal for the area, but under the median price. (IE: 1940-1980 construction, with at least 3 bedrooms 2 bathrooms, is what we focus on). Obviously, war zones, or places you are scared to get out of your car you should eliminate for your first couple flips.

Offer like 20k-21k, that will make them feel good when they get you to pay 27k. If not let it sit and tell the agent to call you back if they are interested later. Most likely, 30 days from today your estimated ARV will be 65k, lowering your offer... Do this on many properties and eventually you'll get a bite.

It's a buyers market, so don't fall in love with any deal until the numbers work...