All Forum Posts by: Jay Hinrichs

@?  the little nuances one learns in the foreclosure bizz... states with redemption rights are very tricky... in Oregon the rights sunset after 6 months.. so many investors if they don't have the rights ( ie can't find the person who lost the house) Or does not want to pay someone who bought the redemption rights and is holding them hostage.. they just wait out the 6 months and go about their bizz... In Oregon you can kick out who ever is living there unless the federal law regarding arms length leases comes to play.. And you can stabilize and secure the home.. But any improvements are at your risk.. the redeeming party just owes you your cash plus in our state 9% and any VERIFIABLE expenses you paid to protect the asset.

@Katharine Chartrand 

  This buying of redemention rights is rampant here In Oregon.. those that buy the rights usually have no interest in the house.. they hold the rights hostage so you will pay them money for those rights.. I bet this person paid less than a grand for the rights. and will want 10k from you... State of Oregon is coming down on those folks that do this... As you need to be a licensed foreclosure consultant to buy pre foreclosure properties.  Same in WA and CA.  Not sure NM. If the court does not approve the sale the redemption rights are moot and the buyer of the rights wasted their time and money.

Highly unlikely that the investor who bought the rights wants the house... Other wise they would have bought it at the auction and would have told you they owned them so you would not waste your time and money bidding.. that's the other play these redemption buyers play.

@Jennifer Fernéz 

  are you SURE this is a good part of town ????  looks like a crack house in a ghetto !!.

I suspect the purchase price is OK and probably too high.. the rehab will end up running you right up to what it would be worth most likely...

You may want to look at buildings that are already rehabbed and tenanted.. this looks like one huge money pit to me....

I bet the current owner bought it for tax's or maybe paid 2 to 5k for it.. that's why he will Owner finance with 50% down he gets all his money back in the down.. But that's ridiculous who needs owner financing on this deal. I guess if your just going to try to flip it.

I have seen foreigners pay 100k or more for these exact type of properties with the promises of rehab that never was done... One in Youngstown OHIO just like this was a subject of a nationwide TV show in Austrialia the out of area investor got burnt to a crisp.

I would concur with others for a first time project this one seems way to involved and just by looking at the pics its only  a shell everything will need to be replaced.

Good luck

12k purchase price for a 5 unit and  ( best area of town) seem not to go together..

does not make much sense to me.. If this was in a ghetto then I could believe the PP

be careful

@Manch Hon 

  I am not an expert on OZ RE  although those I know there say that RE is on the rebound.

And the OZ investor has basically stopped buying US for a few reasons.

1. Cash flow promises of 20 to 30% never materialized.

2. Many of their properties here in the US are vacant and stay vacant.

3. There have been National News stories of the perils of Turn Key investing in the US.

4. Even the marketing guys are getting somewhat realistic with their returns these days showing 8 to 10% net.. And the OZ investor can put their money in a bank for 4 to 6% so why go to the US and risk on a rental.

5. Their market is picking up steam again.

Bubble.. certainly can be in all those countries and citys.. I think the major difference that is hard for us US investors to compute is that Canada and OZ only have 35 million or so total population. So they just don't have huge hangover inventory... CA has the China influence I owned property in BC and the Chinese have bought huge in Vancouver ( don't know about Toronto) and they pay cash much of the time.  So with RE being owned for cash bubble is less likely.. Then you have their natural resource based economies.. As long as China keeps going I think they keep going but there is signs of this weakening.

that's my take on it.

@Rick H. 

  I had a Aussie co author who put the OZ spin on it..  Terms are generally the same.

Although I like this one   "Negative Gearing "  Their term for Negative Cash flow.

so  an IP is either neutral Gear Negative Gear or Positive Gear..

OZ real estate is the same as the SF bay area.. with the finer areas Like SF and peninsula average prices 800k and up... Same in OZ in the bigger cities.. Average little bungalow there is 350 to 500k... They are RE nuts.

They also got sucked into buying cash flow rentals in the Mid west by the thousands by the same marketing companies that hit up Socal investors and investment clubs.. Virtually all of them over the last 5 to 7 years have gone to OZ for presentations and have hooked up with OZ marketing guys.. Who many in the way of Ethics make our marketing folks look like choir boys...

The transactions a lot of these folks got put into  In the worse parts of Detroit, Rochester , Buffalo, and every other big city was Criminal in my mind... Many would buy homes that never got rehabbed or ever got rented... And of course they all paid cash and then you think investing out of state is risky try it from 12 thousand kilomiters away and there night is our day.. Its really tough... Plus they have the same experience a solid CA rental will have People pay the darn rent and stay for years.  HUGE learning curve.

So I wrote a little E book on how to do proper due diligence etc.. Over there there is no Zillow Truila,, and so investors rely on RE agents and Notaries to do title search's. WEre here in the US we have so much info at the computer.  And these OZ are intelligent hard working and very cashed up investors.. But they just did not know what they did not know plus they believe everyone they have no clue as to what a hustler in Detroit or Philly is like.

there banking system is all on line NO CHECKS no Money orders no cashiers checks.. Rents are all auto paid first of the month if you don't have your rental check in your in default.

So when they bought rentals over here many got so frustrated because they had no clue that 50% or better of mid west renters don't have and will never have a checking account to begin with.. Just a foreign concept.

Now many did very well especially buying in ATL, PHX, LV  in the down turn.. But these are cash flow investors they would not even consider a Neutral or negative gear.. So they did not buy in CA OR WA... in any  numbers they flooded to those nice marketing companies promising 30% return in Detroit

I can go on and on  but you get the drift Good Day Mate

please go into the archives on BP and read about wraps and all inclusive DT's a long with contract for deeds etc etc. I could write a book on al the methods you can buy..

Waite a minute I did write a book   LOL... In all fairness I wrote one for Australians on the perils of buying in ghettos in the US..

I am sure your not going to be doing that.. so just get on the archives and read up.

its very possible.. however most of the time the situation will be

1. the home is far over priced so seller willing to finance with no down.

2. terrible area or Ghetto area.

3. odd ball property that just won't move any other way.

4. bad market and seller wants to create cash flow.

I personally have sold with no down deals on my OREO.. I was out of state and just wanted nothing more to do with managing PM or tenants so preferred to sell.. But I usually get a token down.. I have sold a few of my OREO on BP with as little as 2 to 3k down and I carried the contract.. so yes it happens. But you have to hunt for them. And as markets tighten up those dry up.

that when the Bitterroot is running at 2700 CFS the Green drake hatch won't happen

That we live in the greatest country on Earth.. that real estate business is one of the best on the planet as anyone can do it regardless of education wealth ethnicity etc etc.

Along with Cash is King... Buy low sell high.. And low end cash flow rentals are Risky proposition to the un aware.

NMLS only means that they are licensed through the federal system.. its not an endorsement of any kind...  Just FYI...

I am a licensed NMLS mortgage banker ( in active) so are hundreds of thousands of others. Its what you need to work in the Mortgage bizz. you would be more concerned if they were NMLS licensed