All Forum Posts by: Jay Orlauski

Originally posted by Mike M:

Steve
As Jon said and to answer Rich, you can always make the offer contingent upon interior inspection. My point is that you really don't need to even see the house to make an offer. But the offer can have contingencies. If you plan on making dozen's of offers on dozen of REO's, it would not make logistical sense to try and view the interiors of hundreds of homes to make a few dozen offers.

I have done the same several times and have made many offers on homes that I have not seen. Of course I have never actually PURCHASED a property I've never seen. The key is include inspection contingencies so that you have a way out if you don't like the property. Making the offer simply gets your offer in front of the seller as soon as possible. By making the offer contingent on inspection , you give yourself a chance to started on the deal without locking yourself into it if the property does not pan out for you. You can include several layers of contingency by basing it on inspection, ability to get funding, etc. These are common in real estate transactions and most buyers I have ever dealt with recognize that a buyer (usually) must actually see the inside of a house and if it's not an all cash transaction than they should be expecting that the lenders will want an inspection also.

That being said ... I have been having trouble getting an offer accepted recently - however, I believe that I am being out bid by all cash investors who are swooping up all the best cash flow properties. I will be posting that up in another thread addressing this issue and posing questions.

However, even if you have seen the property it and walked around in it , it is still a good idea to include some protection for yourself, because the actual home inspection may reveal things you never realized or noticed on the walk through.

excellent advice - one must stay away from the emotional aspects of buying or selling even though the reality is that it can be emotionally taxing. Taking a step back and doing the cost analysis will help to clarify things and stay focused on the profit. Me and my wife have learned to grow thick skin in this business.

By the way Ben, you can put me on your buyer list as I will be looking to pick up some properties next year in the so cal area. Right now I am investing in the Central Valley and looking toward getting a fourplex. I have not been interested in SFRs but at the rate they are selling for now , it might not be a bad idea - so I am keeping my mind open and watching for good deals.

Originally posted by Greg B.:

Not sure what your rights are at this point but I sure would be taking a lot of pictures and videos. You sure don't want to be blamed for this mess when you leave.

Great idea! - in fact , you should always photograph any of your properties as soon as possible whenever moving in , moving out , or before and after a tenant moves in/out.

As far as dealing with this landlord, its probably too late for advice now, however - when dealing with landlords that seem non committal or a little flakey - its a good idea to verify what day the cleaning crew will be arriving and what they will be cleaning. You might consider witholding the check until the cleaning has been finished as the unit is ' not suitable' move in condition. You have raised a good question about the legality of renting out a dirty apt. I know that sometimes deals are made so that someone gets a discount on the rent for cleaning up the place - but absent any pre-existing conditions of the contract, I'm not sure where the law stands on this.I will look it it up and try to find out. P.S. - what ever happened with that place?

Hi there - are you still birdogging? I am looking for someone in the central valley and coastal areas near silicon valley - thanks

paying for your own cashflow does not make a deal.

I agree with you. I just meant from a return on investment standpoint. The same money invested somewhere else could be earning interest - so it is matter of whether you could earn more if it was tied up in a positive cash flow unit - or could be put to use somewhere better?

Originally posted by Peter Giardini:

This is a great discussion with many valuable insights.

However, Jaden's comment is, IMHO, the most important.

The 70% will not protect you in this market. We are not at the bottom... or there is a very high probability that the housing market is going to double-dip.

Buying using the 70% will not give you enough protection.

It is better to be conservative then get into a deal that takes you down.

couldn't you project forward with a calculation based on the average market decline... then account for that in the numbers so that you have a range that you are just expecting to drop based on a falling market?

for example, if you have done all the math and now know what the deal is going to cost - you could just ASSUME the the market price will decline ( based on local markets) say maybe 3% decline ( per month) in home values - if you work that into the equation than you can assume that if you have to hold onto the house for six months - you have already figured on that price drop and would have determined from the very beginning if that margin still leaves any meat in the deal. Just a thought on it.

Originally posted by Joe Dube:

Hi Derek,

Welcome to BP, I'm here if you need help in the wholesaling niche. There is a very good thread on creating a buyer's list on the forum also. Just use the search function in BP and you'll get the info. you need.

Hope this helps...

any word on sellers list?? other than the MLS? would love to connect with people before they take their goods to the market.

Welcome to the site - there is a lot of info here so it can be overwhelming - but the first step is to just get in and start meeting people. I am in Fresno, just south of you. I am looking for a live-in multiplex situation myself. I am looking to expand in a few years so I may end up looking for property north of Fresno in the future. we should definitely stay in touch. Are you looking to do anything outside of Sac? looking forward to chatting with you in the future.

Hello, , purchasing SFR is going to present quite a challenge i think - in terms of positive cash flow. I started with duplexes and had pretty good cash flow. I have been looking at houses recently and even with the market the way it is , the cashflow is just not quite there unless you can afford to put more money down - but then you have to look at your over return on investment. Recently I have started looking for at fourplexes - we are only looking at 3 1/2 % but that is because we will be owner occupied - but normally there is 20% down on anything over 4 units. with that in mind , you may want to consider getting as many units as you can afford - i.e a 4-plex , a 6plex, 8plex or 10plex. Obviuosly the price per unit goes down when you purchase like this , so your cash flow will be nicer. As far as hard money lending goes - someone can correct me on this , but you might be better served using hard money to flip houses rather than try to get cash flow from it, considering how much it cost to service hard money. You may want to consider flipping a property first , then using the profit from that to pick up a rental property. Even some of the best deals I've calculated with fourplexes will barely yield $50 - $300 a month profit - not too shabby but the numbers look a lot better when you start looking at 10 plus units. depending on what you are trying to achieve - buy and hold may be better deal for now if you can only get an SFR - it is a little difficult i think to unload a flipper right now unless you can find a really cheap fixer upper or know how to work the foreclosure market.