All Forum Posts by: Jennifer B.

The best advice I ever heard about real estate is that its all a numbers game. If you can grasp the concept and look at it from a numbers perspective you will get to the top much quicker. Basically if you want to make it big, you just need to either make calls 4-5 hours a day (or hire someone to do that for you) and go on a certain amount of listing appointments each day and so on. None of the big dogs are doing anything that you can't do, they are just using their time in the most effective manner possible. It's the same with investing.

I definitely don't suggest doing everything on your own... something that I am learning is to give up control and hire people that are smarter than you. Had I learned that lesson 2 years ago my business may be double what it is.... but I can't complain too much.

Be very careful, this business can consume you if you let it. The last two years I worked 75+ hours per week. This year I am on track to beat last year, but have already taken 3 weeks of vacation. So when you do build your business be sure to take time off and enjoy life a little :)

Just know if you can dream it... you can make it a reality!

I keep hearing that its so much cheaper to build here... but I really think its because I have good people that work for me and we typically build the same thing over and over, which keeps the cost down.

for $50/ft you get electric wall heaters, plastic laminate countertops, white appliances, square corners ect ect. Definitely nothing fancy!

There are also some highly skilled laborers out there looking for work, they are quick and can do a great job.

With the exception of lumber and HVAC, all other costs of materials have come down considerably since 2005.

Hi Marian,

I've been working the foreclosure auction for awhile now... and here is what I came up with: Do NOT try and make sense out of it, because there is no rhyme or reason.

Back in the old days, the opening bid was was the bank was owed, most homes had some equity when foreclosures first started happening back in 2008 - 2009 so many investors knew what the bid would be prior to the bid actually being submitted.

Now, there is no rhyme or reason. What I can tell you is that the bank may not submit an opening bid that is more than they are owed (in addition to default interest and back payments). So if you do your research and in the RARE case that the property actually appears to have equity then that should be with the opening bid is, or less.

Case in point: I often see homes in my area that have loans owing $200,000 + yet the bank has an opening bid of $90,000. Of course other investors will be on this property like vultures... but what this really means is the bank does not want the property back and they are hoping it sells at auction. Now I could go into a million reasons why that would make sense for a bank, but that would be a whole different discussion.

Here is another cash in point: A property is worth $200,000 (today) and the loan amount is $300,000. The opening bid is $300,000 so obviously it is going to get reverted back as a bank owned property.

So moral of the story is, don't just assume that because the amount owing is higher than the property is worth that the bank will not be discounting the note at auction.

Also, VERY IMPORTANT: understand the risks of buying at auction. The auction is not an event set up for investors to buy properties at a discount, but rather the instrument for the bank to take title back to the property (I guess depending on what your state law is). Trustees do not warrant what you are buying and sales are "as is". You DO NOT want to accidently buy a second mortgage (there is some strategy to buying 2nds but again... another discussion). If you buy a second you could potentially lose your entire investment. There are also other liens that follow the auction so please do your research or email me and I will give you some pointers.

Hi All!

I'm coming into this discussion a little late... but I'd like to share with I am doing in the Seattle market.

I started by working for a builder back in the good old days. When the bank financing dried up we sought out private investors to finance our deals.

Eventually, I broke off and started my own investing business, my first new investment looked like this:

Lot price: $80,000
Construction costs w/permits ect: $86,000
Sales Price: $265,000 (presale before carpet was in)
Net profit: $65,000

It took 65 days to build the house from time of permit issuance, and closing occured when the permit was picked up.

In the last few years I have done a lot of flipping and a few new construction deals a year. While you can usually flip or remodel a house quicker than build, I still see the greatest returns when you build new.

I use a general contractor with some iron clad agreements and indemnifications so the risk is extremely low. In my area, new construction will sell quicker than resales.

The key is using leverage effectively, and not closing on the land until your permit is ready to issue. Or.. you can buy utilizing existing permits. I purchased a vacant finished lot at auction with a building permit ready to issue at the county. I purchased the lot on a friday, and then picked up my building permit on Monday and went to work.

Local banks are starting to offer spec financing again, most with 35% down and 1 point & 7% interest. I have really effective plans ready t

o build and just waiting for land to come up. We are building between $50 - $68 per foot. The higher end is for homes above $300,000 and gets you granite, hardwoods nice millwork ect.

Oops.. I forgot to mention one more thing:

On my hard money lender letter it states "This is an unconditional approval letter, and is not contingent on appraisal or inspection by Hard Money lender."

Hi All!

Here is what I do when writing offers on bank owned properties using hard money:

I definitely let the listing agent/seller know that I am using a hard money loan to purchase their property and include a letter from my hard money lender.

I structure the deal by waiving the financing contingency to show that I am serious about purchasing the property, and that my only contingency is a home inspection. I give myself enough time to do my feasibility which also gives my lender time to evaluate the loan. I have such a good relationship with my hard money lender that I know the only reason they would not finance the property would be if I thought the repairs were too much or there were other issues.

However, I have noticed that a few REO agents get confused about the lack of a financing contingency and then a hard money lender letter. So to make it super simple I have my hard money lender give me a bank statement showing how much is in their account and then a letter stating they are allocating X amount for X LLC to purchase X property. Usually this works really well. Of course, not every hard money lender is going to do this for you as most have millions in their accounts, but if you explain the situation and they want to do a loan they will do it.

Hope that helps!

Hi James,

I wanted to chime in and let you know how I run my businesses. I started off building homes, and then got into selling real estate as an agent. Once my regular business was built up I started working with investors as well as flipping myself.

My real estate business sold 47 transactions last year (2nd year in business) and I flipped 17 properties.

This year I will flip/build a similar amount of properties and close 60 transactions as an agent.

Currently, I am a one woman show. I do leverage my time by hiring great contractors, design consultants and I do my own marketing.

I also own rental properties and get great cash flow.

My goal is to diversify in an area that I know, real estate. In my opinion, it is a little risky to either be just a real estate agent or just an investor, unless you have a proven system and are doing a high volume of transactions.

The other nice thing is if there is a lack of inventory for investing (like I am seeing currently in the Seattle market) that usually means regular real estate is booming so only a portion of my entire business may slow down. There are often times where I am being an investor that can also get me paid or benefit my real estate business, so the benefits are two fold.

It can definitely be difficult managing both worlds, but I believe once you find your niche or a system that works you can do a lot of business and also have a lot of fun!

It typically takes 2 weeks before the new trustee deed has recorded, at that time you should be able to search for it on your county website. I would also make sure the particular property did in fact go to auction on that day that it was scheduled. You can always call the trustee and see if it sold or if it has postponed.

Hi All,

I can see my little Doctor comment spiraled off to pin pointing attorneys as well. To clarify, the point I was trying to make is that any professional should not be asked to discount their services. If they are great in their line of work, I believe their fee is worth paying. It all goes back to getting what you pay for.

I want to shed some light on the subject and explain what realtors do and explain my experience first hand.

I pay $250 an hour for my attorney, who i trust with everything. It took me a very long time to find him, but we have monthly appointments to discuss deals and I pay him well for those, because I know paying him now will save me thousands when I need him. Many don't understand this, but its much like paying a lot of money for a CPA. Paying a professional who is great at what they do is worth it in the long run.

I advise any investor who does not work with realtors to please at find a trusted attorney. Its not a matter of if you will get sued, its when. Our society is so sue happy that we really need to protect ourselves and our assets. A realtor can shield you from this, but only if you choose to use them. A successful person knows how to find value and you are doing a diservice and putting yourself in harms way by thinking you know it all.

Hi all! I started as an investor, and ended up being a full time real estate agent as well so I have definately been on both sides!

My take on the commission, would you go to your doctor's office and ask him for a discount before performing heart surgery, or better yet ask him for advice so that your best friend can do it for you in order to save a few thousand dollars? Didn't think so...

A good real estate agent is tough to spot, they are to be searched for and then paid well for who they know, and what they know.

I have worked with several other investors and protected their butts when they thought they knew it all.

Now a days we are at the mercy to lenders and appraisers, and when someone needs to point the finger it is always the agent's fault! A good agent can anticipate a problem before it occurs, fix it immediately and not even let the investor/seller know there was an issue.

Often times I consider myself a firefighter, putting out fires left and right but never stressing out my seller or buyer.

When hired, my job is to facilitate a real estate transaction and to leverage my relationships with title companies, appraisers and escrow. There have been too many times when the title company has insured around clouds and liens so many times just to get the deal close. A good agent knows the importance of a great working relationship with the behind the scenes people.

If an investor wants to save his 6% (by the way, a listing agent gets 3% and the selling agent gets 3%) and put out fires and try to discuss title issues and give comps to the appraisers I suggest they try it and let me know how much time and money they really saved, that is if the deal ever does close.

To add to this thread, most do not know that our real estate broker takes approximately 30% of our commission, then take out taxes, gas and marketing expenses and we really aren't making a great living unless we sell a lot of houses. Also think about the sellers or buyers we work with that never sell or never buy!

I appreciate the opportunity to voice my opinion and believe me, I use to think agents made way to much money as well... that is until I took a walk in someone elses shoes and experienced it first hand