All Forum Posts by: Mark S.

HI @Lance Wakefield @Nick Smith @Jake Shuler

Hey everyone, the thread for this got moved.  We are having another meetup next week in Plano at Nikolas at the shops at legacy.  12p for lunch. 

The link is below

https://www.biggerpockets.com/forums/521/topics/28...

Thx for the comment @Mark H. The prices for the last auction for McKinney seemed to be about 25% below MLS comps. I think that seems like high prices after you figure in fixing all the properties. It almost seems like it is better to work in some areas smaller than Plano.

So far I have hit six doors and called a bunch of people.  The hit rate has been pretty low and the people are usually not very happy about you talking to them.  That is pretty understandable.

A lot of the houses are actually vacant though.  I am guessing there a couple primary reasons for that, divorce, death and bankruptcy.  I think the hardest part is actually tracking down the home owner to talk to.  

I am heading back out this afternoon to talk to some more people.  I will let you know if I have any luck

Also I am hosting a meet up for local real estate investors next Tuesday at 12p.  We are meeting at Nikolas in the The Shops at Legacy in Plano.  Let me know if you are interested in coming.

Thx

Thx @Daniel Klein for the information about the seminar, the website was great I bet the seminar could be good too.  

I have my list of the houses I am targeting before the auction.  I finished it earlier, it is based on hitting the higher margin while staying within my purchase guidelines.  I am targeting homes which have about $125k in remaining balance on the loan.  The information is mostly from 4closure.info and Zillow.

I hit two houses so far today.  Both appear vacant, but I think there is a chance someone is still living in the homes.  I was able to get in touch with some of the neighbors who gave me some ideas about tracking down the owners.  So far I have focused on Plano.

Wish me luck!

Thanks everyone for your responses.  Yeah there is definitely a lot of competition in the market right now.  We have been door knocking yesterday and are going to hit some more homes this weekend.  I can understand why a hedge fund would come into the market, there are still great deals to be made.  I checked out last months auctions and quite a few of them did not get bid up very much and would have still been good deals.  I am sure it just takes some time to find the right one.  Like on the new podcast with Andrew Cushman, there are not many people willing to make 4500 cold calls to close the sale.

I have been able to set up some great excel spreadsheets to find the best deals.  I figure if we hit the most profitable homes the hardest then we can have the biggest rewards for our efforts.

I will let you know how the weekend goes!

Thanks @Jay Hinrichs and @Greg H.

So we actually made contact with two out of three homeowners today.  We are trying to get the for the pre-foreclosure prices.  The margin should be higher.  Greg I totally agree with you analysis of the margins.  They are to slim, one problem and its over.

I will let you know how it goes tomorrow.  So far we have found some great deals

OK great.  So the final time for the meet up is next Wednesday (4/20)  at 12p at Nikolas in the Shops at Legacy Plano.

The Shops at Legacy, 5800 Legacy Dr, Plano, TX 75024

Thanks @Jay Hinrichs and @Dean Weltman,

I totally agree with hitting up the smaller surrounding counties in DFW.  My rentals are out in Sherman which is about an hour North of Plano towards Oklahoma.  There is a lot of development out in this direction with the expansion of the 75 freeway.

The age of the homes seem pretty in line with what I have seen sold by realtors in the area.  I think the inventory is pretty similar.  

I have also filtered the lists to target homes with the least amount of remaining balance on their loans.  This will be the first target group to purchase from before the auction starts.

The auction sales also beat out the REO/Lender sales for 75070 in McKinney as well. The last 90 days average price per square foot was $120, the auction is still coming out to $95.75 per sq ft.

Thanks @Dean Weltman,

Yeah those are some great insights.  It is definitely a competitive market getting into the pre-foreclosures in north texas right now.  The home owners seem to be inundated with requests to buy their houses.

I did run some analysis on the buying the properties at auction versus the sale prices over the last 90 days in the same zip code. Based on price per square foot for the zip code 75070 in McKinney the homes are selling for about 30% less at the auction than they do through conventional MLS sales. The average price per square foot for 75070 at the auction was $95.75 for March and sales through MLS showed an average price of $128.22 per square foot.

If you could get the homes directly from the homeowner I would imagine there would be some further increase in your margins, maybe up to 40%.  The margins are still pretty healthy depending on the state of the house.  If you walked into a huge amount of repairs you could pretty easily be up a creek.

Does anyone know how the assessments work when purchasing the property from the homeowner prior to the auction.  A lot of the homes on the Scrubb report showed unpaid balances of $10-20k below the assessed amount.  My understanding is the assessed amount is the fees charged by the banks during the foreclosure process.  Would these be paid off in full directly to the bank?  It would make sense if all of this information was on the closing statement provided by the mortgagee to title.

Thanks for the feedback