All Forum Posts by: John Shortridge

Success is being prepared to capitalize on good luck and being prepared to weather the bad luck ;)

Well, if you are investing in the 10-20k range... I would expect at least 100% return! I'm curious how you are doing it with such little cash.

Ok thanks for the advice. So is title insurance and title search the same thing? or Part of the same thing?

So I was on the phone with my closing agent to discuss how soon we can close a REO I'm buying. She asked me, "Who is paying title." This brought up a serious of questions in my head.

"Does she mean title insurance? Title search? Owners title insurance? etc..."

Just FYI, this is a cash deal, but could some one educate me, or lead me to a forum post, or resource, on what the different closing costs are specifically regarding title? (Naturally, this excludes appraisal fees, lender points, recording fees, taxes, etc...

Another way to phrase, if I'm a cash buyer purchasing a REO, what "Title" expenses do I need to be prepared to pay?

Thanks!

@Mark Gallagher: Interesting. When you say refusing inspection reports, would that be something that happens before the contract is signed or after. Could you elaborate on how that works? PM me if you want!

Buying a multi-unit in LA and living in one of the units is your best bet IMO. The main reason is that if you have never managed a rental before this is a GREAT way to get your feet wet. Certainly better than trying to manage your place which is 3000 miles away with negative cash flow.

My first "rental" was/is my house. My wife and I bought it and rent two rooms (to our friends) for $800 a month total. We pay $900 in "rent" to our selves each month so after our mortgage payment of $1180, we are netting around $500. :)

Your best asset will be a great realtor. First decide what you want to do, then communicate that to a realtor (and be specific!) and see how hard he/she will work for you. 

Our realtor stuck with us for nearly 12 months before we found our house (which she barely made anything on) and now she is one of our best friends and she has been working all my REO flips deals too! Her regular clients typically pay her 3% on 500k+ deals but she works just as hard on my 50k to 200k foreclosures! Find one like that!

Mark is correct. Most of the things in your inspection are things that you shouldn't really worry about. And many inspectors will miss big issues. That being said, in my opinion however if I'm paying an inspector, I want them to give me, in writing, everything they can find wrong with the house. This includes obviously the gaping hole in the roof, but also the light switch which is a little sticky. 

Then it's your job to decide which things are actually problems, and which are no big deal. For the average home buyer, and inspection is about protecting yourself. For more savvy buyers, the inspection is a means of negotiation. In your case, the trees are probably something you will have to just accept. As for the roof, it depends on if it will prevent you from getting a loan. Talk to your lender and find out. If the answer is no, you can't get a loan because of said issue, then call 5 companies, have them come out and give a bid, then send your inspection report and the most expensive bid for the work back to the seller and say "I'm happy to write off everything else in the report, but the _____ is a big issue. It's gonna cost me $5k (as per contractor bid), so if you fix it I will buy at our price, or we can bring the price down by $5k."

The key is you are looking for things that will be problems for future buyers if your contract were to fall through. If there is an issue that becomes known to the seller through your inspection, by law they must disclose that to future buyers (at least they do in TN). So, those are your real points of negotiation. 

In your case... don't worry about the trees (just buy a pole saw after you get the house and have some fun ;). Do worry about the roof - Find out if it will prevent you from getting the loan, then just be honest and negotiate with the seller. 

Ok good advice! I think I'm gonna go for it. What's the worst that's gonna happen? Make a little less? Probably not. Lol

I'm curious Guy, do you find that there is less demand for your houses since you are eliminating a whole set of buyers.

For anyone else out there, I am curious of how investors are working around (or working with) this rule. I've had an opportunity come up for a nearly "paint and carpet" rehab in my area. The margin is not very big, but I could turn it around in probably 3-4 weeks to make 10/15k. My only concern is that at $150k ARV I feel like there will be a lot of FHA (first time, lower income/cash available) buyers looking in this neighborhood. If I have to hold it for 90 days before executing a contract (likely 4.5 months before I get paid), my rate of return plummets meanwhile my cash is tied up in this deal. Has anyone had a situation like this and found a reliable way to deal with it???

John

 Ok, So then it is possible it's an inheritance or gift where they may not have a mortgage on the property. Correct? 

I do understand that this is no guarantee the title would be clear. 

Have you or anyone else here ever used this or a similar technique to find property owners with lots of equity? All the ones I'm looking up have kind of crummy looking houses (at least from the outside) so I'm hoping to find someone who owes little or nothing who would sell their house AS-IS below market.

John