All Forum Posts by: Karin Crompton

@Manny Cirino interesting that you mention under-pricing to drive traffic, as I just came across one this weekend that I suspected was underpriced so as to start a bidding war. I put in an offer for a contractor friend, and lo and behold, there were 5 offers submitted by Monday and the bank was asking for highest and best. Still, there was room in the deal and if he gets it, he should do well. I was involved in another one in the fall for which there were 11 offers; but again, judging by the purchase price and then the resale, I think the guy who won the bidding did make a good profit.

In my area of the state, I'm mostly seeing stuff that's way overpriced to begin with - a lot of banged-up REOs close to retail - then the price drops for awhile until someone finally buys it for what I consider to still be 10k-30k too much. I've been scratching my head a lot in the past 4-5 months, wondering who's paying those prices.

Thanks for the explainer, @Manny Cirino - that makes a lot more sense! And absolutely, it is more than reasonable to ask the Realtor to pull comps after doing your own self-analysis and whittling the list ... and I think that's a great point you make. I know some folks who don't do much self-analysis and want to go out and see anything that arbitrarily strikes them as interesting. You want a Realtor who works hard for you, but you need to bring something to the table for them as well!

I live in East Lyme but I haven't yet found any rehabs in this overpriced town! My search includes all of New London county - I search actives, expireds, 160+ Days on Market, REOs, Estate/Probate sales, keywords for as-is, fixer-upper, etc. And I have a search for all Closed properties that fit my criteria, so I get a list each day and scan through those to keep track of sold prices, not to mention anything I might have lost out on during bidding - I want to know what those sold for. I have a file of properties I was interested in, in which I jot down what my ARV is, and then I'll make note of what the actual sold price was to see how I'm doing in my analysis.

@Konrad L. - yes, "comps" are comparable properties. There are some very good blog posts here that explain it far better than I could. But yes, you compare property size, style, year, # of beds and baths, acreage. You want to determine what price properties that are similar to yours sell for to get a sense of what your property will go for. You definitely stay w/in your town (surrounding towns are worth squat), and then it takes some knowledge and feel to determine how to comp w/in the town - whether to stay on the same street (I find this difficult in CT, as I don't generally find enough comps in my smaller towns), how far out you can go, which neighborhoods are similar to yours, that kind of thing.

@Konrad L. you can also search HUD and HomePath properties yourself online (HudHomeStore.com and HomePath.com) for foreclosures. And you can check out auction.com and hubzu.com. Like anything online and on the MLS, there's a lot of competition for these properties - and prices are going up.

Otherwise, a lot of seasoned rehabbers will market for properties themselves - direct mail, postcards, bandit signs, etc - and/or they will work with a good wholesaler. There's a ton of info on BP regarding marketing.

And the best method of all, though it takes some time: networking. As you proceed, you'll meet a ton of people in the business and will figure out who's the real deal and who's not. And eventually, you'll have people bringing you deals. But again, that takes time.

Good luck!

@Manny Cirino do you mean the Realtor will actually send comps along with the search results that come up on the daily MLS Hotsheet? I'm surprised if they do, unless there are some settings they can input that I'm not aware of.

I have a variety of MLS searches set up for myself and a couple for a fellow investor, and among those searches there are probably 20 properties that get emailed to us every day. There's no way I'm comping each of those 20 properties - I don't have the time, not to mention it would be a huge waste of time. I will gladly do a quick comp for anything that catches my friend's eye, to determine whether it's worth pursuing, and then I'll do a detailed comp if she wants to send in an offer (same method I use for my own searches). But for every single result that pops up on a daily basis? Yikes.

I don't have personal experience and have missed her talks at CTREIA. I will say I have heard a few people speak well of her, though don't be fooled: she is NOT just getting started. I don't know if she perhaps has an aw-shucks, relatable presentation, but she's an experienced businesswoman. And she's in the "education" business now - selling materials and doing the speaking circuit.

Again, I can't speak to their worth; they could be good. I had a very good experience w/one guru's materials I purchased after seeing that person speak at CTREIA (though it was one speaker out of about 50 over the years). So maybe Sue's stuff falls into that category. If you get it, I'd be interested in hearing your experience.

Yep. My mother (aka business partner) actually created a folder called, "Karin vs. all real estate agents everywhere" to keep track of correspondence because I've run into so much of this kind of thing. And I consider myself a pretty peaceful, non-confrontational person ... unless you get unethical. Oh, and btw, Mom's a broker and I'm an agent.

My "best" one lately: we had an offer accepted on an REO, and during my due diligence, I discovered that the leeching fields were located on an adjacent property. The agent promptly started ignoring me; they did return our security deposit, and one day later the listing was suddenly dropped and then picked up by another agency. I called the new listing agent, who hung up on me so as not to hear the story. So we sent in the leeching field info via an online feedback form. It was still never disclosed on the listing, even after that. The price dropped in a hurry, and the property is currently listed as under deposit. Stay tuned.

And, like @Walt Payne mentioned, I have the ones who don't return calls as well. I just re-submitted an offer today for another investor, whose previous offer went ignored for a month.

The good news: it's stuff like this that weeds out the wannabes! Some people can't take the abuse, or the time it takes to wade through this bologna day in and day out in search of the good ones, whether it's agents or contractors. So keep fighting the good fight!

Yep, I'd agree that it's too weird to have a master off the kitchen. One of our golden rules is what @Bill Gulley mentions - no walking through one room to get to another (i.e. no walking through one bedroom to get to another one, and no walking through a kitchen to get to a bedroom). Functional obsolescence.

I don't know your area, but would it be valuable to add a half bath so you have a 3/1.5 instead? That tends to work where I am.

My 2 cents - I'd be very, very careful about going any higher. Does your 10k repair buget include contingency of at least 10-15% above what you've already estimated repairs to be? Are you extremely confident in your ARV? Where are you borrowing the money from, and what will it cost you to borrow it? Are you calculating holding costs of at least 6 months, including taxes to be paid? Insurance, commission, conveyance fees, attorney's fees?

Using your numbers and applying the 70% "rule," I get a maximum offer of 95k. (150k x .70, minus repairs.) If you reduce your profit to 15k - you would have profited about 22-30k using the 70% formula - you might be able to go to 102-110k on your offer.

However, a 15k profit is a very slim margin, imho ... too many things can go wrong in a rehab that can eat into that in a hurry. And if your resale number is off at all, there goes the entire profit. For example: all you need is to be 5k off on your rehab estimate and 10k off on your resale to eliminate your entire profit.

Take these comments for what they're worth, as I don't know all of your numbers and the area you're in. Keep us posted on how it goes!

Welcome, @Spencer Wilson. I don't know the agents in Fairfield County, but you should be able to get a good start if you do a search for foreclosures and see who's got the listing, then call those agents.

Try Realtor.com, HUD (hudhomestore.com), or HomePath for starters. They'll all have contact info for the Listing Agents there.

Also understand that they might be hesitant b/c they've all gotten a ton of calls from people asking for the same thing ("Find me a deal!"). Bottom line: they don't know you're for real until you prove it to them. So don't be put off when they're a little cool to start. Make it happen, and you'll be best friends. haha

Good luck!

@Account Closed sees it! (Also, I should not have chimed in w/my sarcastic guess, which was little more than an uneducated barb at the banks. I'm glad you followed up w/some useful info.)

Thanks!