All Forum Posts by: Lewis McKnight

I am also in DFW area and own a lot of rentals... My rents are still going up. I have also been a real estate broker for 20 years. Prices are falling BUT payments are up. For example if you bought a 400,000 dollars home last December and your payment is say 2000 dollars. You buy the same home this December for 380,000, but your payment is 2500 dollars because you interest rate went from 3.5% to 7%.  These are not exact numbers, but the point is the price maybe lower but your payment is more.  So.... If you are a buyer/renter.... The housing payments are going up... So why would rents fall? Houses will fall most likely but payment ie buyer payment and rent payment will maintain. If we don't go into a recession rents will maintain and go up in DFW is my guess. If we do go into recession Rents will fall less than what houses fall my guess as well.

Guys as far as 9.99 a week to list a rental on Zillow. I don't care about the money. If it was 1 cent or 50 dollars a week. That is not the point. ( I personal will pay 9.99 a week if I need to rent one of my rentals and can't) The point is Zillow is saying they have more power than the Realtor MLS rentals and they don't think they need the MLS rentals any more. What happens when they think they have more power then MLS for sale properties and decide they don't need them anymore.... That is when realtor get.... The first major step toward this will be some program like the one below that provides some sort of realtor type service. If that takes off and does well. They become the MLS and then cut off the local MLS....no more realtors.

Examples

Zillow starts charging the seller a Flat fee  $5,000 to 10,000 is my guess. To sell, loan and do title. As far as advice that new buyer so desperately need and only realtors can provide. They put a couple 100 realtors on staff at 50k a year. That advice is now given. They so desperately need a realtor to open a door to let a buyer in. There will be so many ways around that with technology ect it laughable in my opinion.

I believe this is what will happen unless take away Zillows data sooner than later. So I started to leave the industry about 3 years ago. I now run a small fund that buys rentals with BRRRR model and wholesales properties with 90% my time.

All interesting comments thanks for commenting everyone. So I don't know how all states work, but in Texas. Each major area has an MLS. So Dallas/Fort Worth... Austin, Houston ect... The MLSs have control of their data. (ie the houses.) They own that data. The realtors with in these MLS pay to be apart of the MLS and put their data ie houses for sale on the MLS. The MLS then give access to this data to realtors in that MLS. ( Live in Dallas but don't have access to Houston MLS) Some realtors pull this data to their websites via IDX ect. BUT the MLS owns this data. NOT Zillow not the realtors. Yes realtors can pull their own listing off, but they can't pull someone elses.

So my north Texas MLS would not give Zillow the Solds. The MLS owned it and Zillow did not get it. About a year or so go. Zillow came a knocking.... They wanted our solds and they were willing to pay for it. WHY??? because data is KING. I don't know what happened, but I know our North Texas MLS wanted to sell it to them and keep all the money and Zillow was going to pay them.

So my point is this most MLS system give their data for fee via IDX to realtors. Zillow becomes a realtor and gets that data for free or for a very small dollar amount. That data is everything and we are giving it away for free. Zillow has the platform now and after a while they will have the realtor's business too. IF we don't as MLS and realtors stop them.

Make no mistake Zillow is the enemy. Also the MLS system is the realtor monopoly that has made realtors alot money. Realtors are now giving that monopoly away for free. If we continue to do so. My guess is with in 5 to 15 years. Realtors will have a 50 to 75% pay cut or be salary.

Guys, Rich Barton is in control of Zillow. He has also been apart of these two companies  He helped start Expedia it took down the travel Agency, And he is on the board of Netflix. It took down Blockbuster. He is running Zillow and he wants to take down the realtors.

So, I am an investor and realtor. I work and live in Dallas Tx and Starting January 12th. Zillow will not longer pull rentals from the MLS and put them on their site. They will charge everyone, Realtor or landlord 9.99 a week to put them on the MLS.

Zillow is becoming the MLS for rentals or trying to. They have pulled realtor rentals off. Should realtors pull their for sale listing off in retaliation and see what happens? What is zillow really planning on are they trying become the MLS?

Zillow scenario as MLS

1. Home owner pays flat fee. You get your home on Zillow, title package, loan package all for that fee. Showings... No realtors needed. Home owner will have open house on Saturdays and Sunday for buyers to come. Offers will be made through Zillow site. Advice on process ect. Zillow has realtors on staff that get base salary and walk you through the process. Zillow gets the house, the loan and the title.... Realtors, loan officers and title companies out of work. Zillow wins.... Should we as realtors remove our listing from them now to stop it. They just removed our rentals....

I am an investor/broker turned wholesaler... Why, because if you can't beat them join them.  I tried to buy from New Western but they are too good. They have too many buyers and someone always pays a crazy price. So.. now I sell to new western, if I can't wholesale it myself. 

Overall there are deals ever where. You just have to work at at finding them. An Agent of mine bought a deal recently from New western and flipped it for 50k profit.... on a positive side...

I found a deal in a smaller town outside DFW area MLS. So small town MLS. Here are the stats listed at 42,500 for 7 days. I got it for 32,500. Gave it to New western to sell. They list it for 49,000 and sold it in 30 minutes. They SOLD it for more than the MLS!!! The property was on Zillow ect... They are good to good some times. I guess my point is they have so many buyers that many times they can find those stupid buyers that pay crazy prices.

Work hard and you will find a deal. Maybe from a wholeseller maybe not, but you can always find a deal. Wholesellers are not bad or good. They help screw people over and help make people a lot of money all the time. BUT the person who really screws people over or makes great deals is the buyer themselves not the wholeseller.

Rob, the answer is... What's the price? If the price is a dollar I don't care where it is. I will buy it. send me the address:)... 

Run a breakeven. 12 months vacant 20% discount...Is that good enough you decide. Second how much cash do you have? Can you float the lose build it into your model.  It just numbers... Put an estimate in of 9 months with out a payment and then get a price discounted enough for that to make since.. If the seller will sell it for that price and you have the cash reserves, buy the home. If not move on.

I am an investor/broker turned wholesaler... Why, because if you can't beat them join them.  I tried to buy from New Western but they are too good. They have too many buyers and someone always pays a crazy price. So.. now I sell to new western, if I can't wholesale it myself. 

Overall there are deals ever where. You just have to work at at finding them. An Agent of mine bought a deal recently from New western and flipped it for 50k profit.... on a positive side...

I found a deal in a smaller town outside DFW area MLS. So small town MLS. Here are the stats listed at 42,500 for 7 days. I got it for 32,500. Gave it to New western to sell. They list it for 49,000 and sold it in 30 minutes. They SOLD it for more than the MLS!!! The property was on Zillow ect... They are good to good some times. I guess my point is they have so many buyers that many times they can find those stupid buyers that pay crazy prices.

Work hard and you will find a deal. Maybe from a wholeseller maybe not, but you can always find a deal. Wholesellers are not bad or good. They help screw people over and help make people a lot of money all the time. BUT the person who really screws people over or makes great deals is the buyer themselves not the wholeseller.

@Rick Pozos I agree the 200k example is very hard to find. Where I work there is a huge market for owner finance deals though.  9.9%  is about market for these loans or even a little low. Getting a borrow with over 600 credit score to do this loan is not going to happen, I agree. So if you have to have a borrow with over 600 credit to get a bank to loan on your owner financed loan this won't work.  The people needing these loan are legal residents but have no US credit. So not bad credit not good credit just no credit. Texas has lot of people like this and I have also found that finding someone to put down 20k or even 40k on a property like this is not hard. Getting the capital/Leverage for these kind of deals is the issue I am having. Trying to figure out that part....

It has come to by attention that a loan can be loaned on. I want to put this out there and see if anyone has done this. What are the issues of doing this? What % of the owner financed loan can you get from another lender? 

Basics of how I think it works. You have a home that is worth 200k. 

Appraisal 200k
Down payment from buyer 10% or 20k
Your owner financed loan is 180k.

You can then get another loan for 65% 70% or 75%??? of your originally 180k loan from a 3rd partner lender and get your money back.

Yes you can do this with a land contract, and wrapped an original loan, but the vast majority of lenders will not allow you to change title and wrap the loan. They will have a due in full clause if you do this. If you get a loan off your own loan. You do not have to worry about any due in full clause. Plus look at this way.

Purchase home 130k
Rehab 20k
Total in home 150k
Appraisal/sale is 200k
Down payment from buyer 20k or 10%
Loan 180k for 9.9%
Second loan off your owner fiance loan at 75% for 130,000ish at 6%

Money left in the home. 0
You make the split of 130,000 at 9.9%-6%  = 3.9% or 422.50/mo
50,000 * 9.9% = 412.5

You know have 835/mo of income no money invested, no maintenance to do on a rental, and the profit from your flip is invested at 9.9% without paying any income tax on it.

Let me know where I am wrong and how to best go about doing this.

So the issue that I have been having is people having been buying those 80/20 before repair properties from the whole sellers. So, we had to go out and find our own homes. We have even then gone and wholesaled some for that 80/20 before repairs. A wholeseller is going to try and get a much as he or she can. The market is flush with cash and new investors that are willing to spend it. Good luck