All Forum Posts by: Matt Shields

Here in the Phoenix area most of the market is a seller's market, not from strong demand, but low inventory. Almost all of the offers here are FHA in the price range that I operate ($200-$400), so not accepting them is difficult. And almost every offer I have received in the last year requests seller concessions, because most people don't have any savings. I saw a frightening statistic that 63% of Americans can't afford a $1,000 emergency. Also a big problem I have had recently is dishonest lenders who tell me how rock solid their buyers are, but then start backpedaling at closing time. They seem to be using the feces against the wall business technique, because they and their clients have nothing to lose if it doesn't close. I don't even look at pre-approvals anymore because so many are a joke. To stop this nonsense, I have started taking out the financing contingency in a counter, and adding a non-refundable earnest deposit. It weeds out the people who can't perform right up front.

I don't allow any pets. But if you do, I would not single out a breed, unless it's illegal or uninsurable. Any dog breed can attack, and larger ones can be lethal. Yesterday a woman was killed in Austin by several mut lab/husky/pyrenees/cattle dog mixes. There are a lot of ODO's (Obnoxious Dog Owners) out there, and it is not just the attacks. I have a lot of problems with ODO's letting their dogs bark day and night, run loose, or drop a deuce in my front lawn.

I have been bitten a few of times. (Excluding playing with English bulldogs my family used to own, where tug of war sometimes ended with an accidental bite to the hand. :) One was a chow, one an American bulldog, and a schnauzer. Ironically, the American bulldog bit me when I was trying to protect a pit bull that she attacked.

I know dog trainers who work with many different breeds, including pit bulls, and I have never felt threatened by any of their pit bulls. On the other hand, they have had some other rescued dogs that had aggression problems, because they were trained that way by a former idiot owner. Unfortunately, pit bulls have become the canine fashion statement for scumbag criminals who train them to fight and be very aggressive. This is why there has been a recent spike in pit bull attacks. Before that it was rottweilers and German shepherds that these type of morons used to be vicariously tough guys through.

It's really the person that you need to disqualify. Anyone who doesn't pass your screening is probably the type of person who would keep a vicious dog. 

 I'm trying to stop accepting seller concessions, because buyers agents want to tack it on to the sale price, but this often causes it not to appraise, then I have to decide whether to eat it, or waste a lot of time and carry costs going back on market. The problem is, so few people have any money saved.

 Most of the offers I have been receiving are FHA with seller concessions, and the grants are now becoming popular. With the Home in 5 Program, buyers can qualify for assistance even if they earn almost $90,000 a year. When I speak to agents, they tell me their clients must have seller concessions because they don't have any money in savings. 

I recently closed escrow on a house, and the financing was: 3.5% FHA Loan, 3% Seller Concessions, and 4% Home in 5 Assistance. The buyer was paid 3.5% to buy the home.

http://www.downpaymentassistancearizona.com/home-i...

http://portal.hud.gov/hudportal/HUD?src=/buying/lo...

My concern is with all of the no-money down deals being done again. Many people are accessing FHA 3.5% loans, which allow up to 6% seller concessions. I have also been receiving contracts with 4% government downpayment grants on top of the seller concessions. I think I've seen this movie before.

Be careful using friends and family for team members. It's bad if a deal go's south, but it's worse when it takes relationships with it. Friends are friends, family is family, and business is business. Good luck.

I started out on my own, but went back to being an associate broker. All of the extra paperwork, expenses, and added liability seemed not to be worth the small transaction fee I pay to a 100% broker. 

If you do leave KW, make sure the new broker is investor friendly, some are not. When I first began investing with flips, I had to leave a big name brokerage because I was only listing my properties, and that was not enough for company minimums. The owner told me to choose between investing, or being one of their agents. Well, here I am! Ironically, it was one of their training programs, which brought in a guest speaker who talked about flipping homes, and turned me on to the idea.

Are you looking to do owner/agent with dual-agency? 

Do you have any spare carpet, or a carpeted area in a inconspicuous area like a closet? I'm not sure if it works for berber, but my carpet repair people use a tool to cut out and replace the stained area. If you don't have extra carpet, at least it can be moved to someplace. I use the bottom of the lenin closet. When they are done, I usually can't tell were the repair was.

 In Arizona unlicensed contractors can perform work under the "Handyman Exemption ARS §32-1121.A.14" for work up to $1000, including materials and labor, and must be of a casual or minor nature. Over $1000 the contractor must be licensed with the Registrar of Contractors.  An investor (anyone re-selling a home within a year) is also under this law, and must use licensed contractors for repairs exceeding $1000 per house. 

Unlicensed contracting is no joke in AZ ROC Most Wanted

 I can only speak for doing business in Arizona. Here it isn't a matter of "trust", but the protections afforded to contractor's. If a contractor is not paid as agreed, the contractor can place a mechanic's lien on the property, preventing its sale until the lien has been satisfied. These liens even survive a foreclosure. This would be especially problematic for the flippers like myself, considering the carry and opportunity costs. 

On the other hand, if a contractor fails to complete the work, and/or performs substandard work after being paid upfront, the investor must first request an ROC inspection. During this time the work cannot be repaired/finished, and the project is stuck. Then the investor must file a written claim with the surety company who issued the bond required by the ROC. Most will not pay without a judgement, so the investor will have to file a lawsuit against both the contractor and surety company, which will take months, and sometimes years.

For a GC with a large rehab, I can see having a draw schedule, but for smaller projects I never pay upfront. Of the four licensed painters I interviewed, none asked for a deposit.