All Forum Posts by: Jay Hinrichs

@Dion DePaoli @Jason Eyerly 

  I have done hypothecations but it was my commercial bank that was taking the collateral and it was on new sales were the buyer is A paper and put substantial down and of course my PG was attached to the transaction at the bank..

When again we talk about these low value 1st  they tend to be in the countries mid section and upper rust belt... Were values as suspect at best.  Its really the land of the wholesaler and TK operator and or mom and pop buy and hold investor as we see here on BP getting into their dream investments of buying and holding these nice little cash flow houses.

However as Dion so aptly points out your not the owner  and it takes dollars time effort ext. to take a note through the full disposition process.. And of course that's regionalized.. But for instance if you have to put Forced place insurance on the asset that policy is far more than a tradional policy.. And then what happens when your trustor BK's now you have to pay an attorney for relief of stay  ( very common on the west coast).. Heck in Vegas a good lawyer can keep people in a home for well over a year for maybe 1500 in fee's. So you run those risks.

In my mind this business is a business its not passive its not for someone just wanted to start out with a limited amount of funds.. at the end of the day I would guess many just lose all their invested capital over time trying to wrestle all the things that can and do go wrong and as Dion points out everyone is different animal.  If one was going to go into this I think you would want some serious capital behind you a team in place and go at it.

Unfortunately I personally had to foreclose on about 200 loans I had out in 08 09 melt down...  that took me 3 years and its still not over... I just sold one of my OREO's to a BP member in June... my original loan was high 40's we settled at 20.. with me financing with Zero interest.. Just to get it off my books cash value of that asset was maybe 10k. All in the low value 1st markets of what we are speaking about.  Its a tough job...And these were all non owner occs so somewhat easier but still a ton of work...

@Jason Eyerly 

When you go to sell your note remember investors are going to want the highest yield they can get and will go through all the DD etc etc.  I suppose you could list it on one of the many sites out there...I don't see these notes as being extremely liquid... probably take some time to sell a one off note.

@Edward Briley 

  Bring your armor with you to Detroit :)

@Account Closed 

dead on target K regarding west coast ... our market here in PDX is very competitive its common to make 50 to 75k on a 400 to 500k fix and flip..not much more if the home was open to competition was multiple buyers. ON the low end court house steps the high volume buyers make 10 to 20k maybe 25k on 250k and under. There is another member on this Site Stu fox and between him and I back in the early 2000 we were the number one volume guys in our market.. And its what led me to into starting my HML company in Oregon we made better money lending to the flippers than being the flipper.. with a heck of a lot less work.. But our risk went up as well since we were not in control of the asset.

I suspect you hit the nail on the head when you said in this instance something has to be wrong with the numbers.. If its a competitive fix and flip market were this property is and you can truly sell for ARV then your absolutely correct that this person should be able to flip that house and make 25k or more easy.

@Dion DePaoli 

Dion all great points and I think we are of like mind when it comes to NPN.

Agree about Mich and parts of Ohio.. Institutional note buyers would not buy in those states for any price. 

Many of these Notes as you state have no value .  Not sure where the banks go with these if no one will buy the worthless note and then the bank does not want to spend money foreclosing.. I suspect we will see a huge surged in Tax sales as the banks just let them go and hope to make some overage's.

I have a friend that works for a company in I think its Jacksonville and they do computer modeling for banks that is very cutting edge to take their portfolios and give data on how many will default over time so the banks and servicers can get ahead and know which loans are at risk and move them out of the portfolio..

@CHRIS MITCHELL @Account Closed 

I do not know your market specifically but the west coast MID west deep south and rust belt ARV issue is, that in my experience as a HML and financing wholesalers and flippers and owning over 500 of the mid west type homes. You can get an appraisal no problem but you will rarely if ever sell for anywhere near appraised value... and it could be your in a different price point I am talking sub 120k homes. Especially in cities and areas that are Heavy to TK investors... The marketing is all like this..

House ARV 90k

your buying from us for 75k  

15k INSTANT Equity

So what is the home really worth what you paid for it or the ARV that was represented by the TK company or seller. and since these are off market no listed on MLS its hard to mine the data. Many an investor that has bought mid west based on this so called ARV only to find out the only true buyers are Wholesalers that will never pay more than wholesale there are no owner occ to speak of in these areas.

Were on the west coast like in our market in PDX houses sell for 100% of appraisal and within 1 to 2% of list price on MLS.. as a matter of course. and then you have the hot markets where stuff sells for over list and over appraisal.. although that is calming down a little from what I hear these days.

@Ryan Melton 

  building a data base of would be targets and then staying on them is an excellent way to go at least you know your fishing in a pond that has some fish in it.

@Chetan Tandon 

if your mailing NOD list then your mailing is most likely one of 20 to 50 letters that they receive through the NOD process... All basically using the same script and technique that are taught on line on BP or at seminars.. I used to do NOD myself.. door knocking was the only way to get in front of those folks. I did not door knock myself.. I had teams that I hired do it... one women one man 3 teams working a 2 million metro population we hit EVERY NOD that came up created data bases , Had one employee that did nothing but data base entry and updates in real time.. In other words a business. But one day you may get a call.

@Ryan Melton 

  were these houses all vacant??  if there was someone living there would you have door knocked them ? and skipped the letter sending ?

good job... You would be a good real estate agent with that kind of drive.. probably do pretty well at it.

@Chetan Tandon 

@Ryan Melton 

what Ryan did was target market.. he only sent letters to homes that met a criteria.. Not shot gun style..

So when you drive around looking for deals you are putting far more effort into the process then just hiring a service to send out postcards and wishing someone will call you.

Depends on the market as well.  Little Rock probably is not hit as hard as other parts of the country.

I don't solicit for deals personally, but I get a lot of this collarteral sent to me on house's we own all over the US>.. Hot markets for me to get letters of varying nature are

Orlando,, KC  , Houston... and Charleston.  Here in Oregon I never get letters on any thing we own here.. But we are not distressed.. and a lot of what I get is reverse.. Its from other wholesalers saying Hey I noticed you bought a home in the area and I have deals please check my deals out....

@Anil Samuel 

  now that you got the easy part out of the way  ( getting the license) and if you have no formal sales training. Go with the company that gives you the most sales training and motivation.. KW is know for that... Maybe join a Team at KW so you assimilate quicker.

and Remember a top agent will make pretty nice money  while your doing your investing. Its like getting paid to invest.. not sure where your price points are in your market vis a vi how much the average sale is so you can figure out how many sales you need a year to say knock down 100k or better.... And if you really excel at it and like it you will make far more money than most that are just trying to buy and hold and or wholesale.. with the same effort.. The other main benefit of being an agent.. Is you are creating relationships with our clients. I sold RE from 18 to 32 YO  35 years later I still am in contact and do business with some of my clients I sold property to that many years. ago.. they can become your investors when your doing your deals..   Remember when your buying distressed properties from folks they are one and done.. they are losing a property etc etc.

Your good buyers and your sellers that are not distressed you create long term reltionships with and you never know when one says hey I got 500k just sitting here what should I do with it.  :)  It happened to me more than once