All Forum Posts by: Nick Noon

Lost the property before I could even submit an offer.  They listing agent received 4 bids, all over list price within the 7 days it was on the market.

Someone is going to make a lot of money on that house.

@Russell Brazil@Jeremy Tillotson

Thanks to both of you for the information.  I am putting the offer in today and hopefully all will go well!

Hello fellow BP'ers,

I was wondering if anyone has had any experience with buying with homepath.  I looked at a property yesterday that I am going to make an offer on today.  This is my first time ever making an offer on a property, let alone on a fannie mae property.  Here are some of the details...I'll keep them vague to protect myself a little bit:

I viewed the house yesterday and it's everything I wanted in a property, and just enough filth that I was looking for. The property has been on the market for 7 days and there was already 4 people signed in on the sheet before we walked in. There has also been a lot of views on the other MLS websites. With this kind of activity, I am looking at going $1,000 above list to make sure they know I am giving them a serious offer.

My questions are as follows:

1.  Should I go in at above list for this property?  I would honestly be happy if I get the property for the offer I am going to make and it's an amazing deal at that price, but obviously no one likes leaving money on the table. 

2.  Should I write a letter to the bank mentioning some of the things such as, "This house would be perfect for my 7 week old son", "I can see us having his first birthday in this house"...and other things along those lines to make it more personal and give me an edge.

3.  After my offer is accepted.  Can I go back after the inspection and ask for some money back citing different defects in the house?

4.  If I were to make a lower offer, would I get a chance to raise it if they did not accept?  The "First Look" ends in 12 days so I don't want to delay this process any longer.

I am very nervous about my offer and I want to make an impact and get it accepted without giving other bidders a chance.

Any insight would be greatly appreciated.

@Mike S

That's funny you mention that "College with debt, job to barely pay bills/two weeks off/for 40+years, crappy retirement"

I went to college for 4 years and am now paying $1,100/month in student loans, with the end nowhere in sight.  Don't get me wrong, I don't regret it at all. I have a well paying job in an industry I love and for a company that treats me really well.  However, I do want to buck the trend, like you said, of not just working to pay off my student loans and then hopefully have money to retire with my 401(k).  

Still, at the end of the day, it's not about the money.  I'm not getting into real estate for it to be a "get rich quick" scheme, because it's not.  I just love the industry, the chase, the feeling of making the deal, the entrepreneurial aspect of it. 

I must say, reading all of these posts has been incredible.  The motivation of people on this website is incredible.  It makes you feel like you could run through a wall.  We should do a post like this once a week and just feed off the energy. 

Thank you all for the positive and motivational responses.  It's just so fascinating how many people want to feel justified in not taking a risk.  People taking risks and having a potential to do something great scares a lot of people.  It's a lot of jealousy I think.

I never let people's comments bother me I just get amazed at the resposnses. I'm 28 years old and I have NEVER not achieved a goal I set out for.  Sometimes my goal changes throughtout the process but I never quit.  And I always have goals, never stagnant.

I'm not getting into this industry to get rich quick.  Hell it's not even about the money.  Like I said, I need more.  having the passion and accomplishing goals is what I get high on.  

I feel bad for people that aren't able to take risks and are content.

I told my girlfriend that when we first met.  "I will never be content"  it's a blessing and a curse I told her because always striving for goals and never being content means I will never be satisfied, but thats okay

I'll never understand why 99% of the time people have negative responses when I tell them I am trying to get into real estate and rental properties.  I mean literally every time I tell someone about it I get one of the following responses:

"You think you do, but you don't"

"It's not easy"

"You'll end up with horrible tenants and want to get rid of it"

"What happens when your tenant doesn't pay?  You can't get them out of the house"

"What happens when the economy falls to pieces and you can't rent the property"

Like, yes I get it, it's not an easy industry.  I never said it was.  I understand that being a landlord isn't the most glamorous job in the world and a lot of people fail at it....even the people who have given me those responses.  Everyone I talk to has either had rental property that they hated, or knows someone that hated it. 

I don't understand what they expect me to say to these responses?  "Okay, now that you've told me that it's hard, I'm definitely not going to do it".  

I think there is a lot of ignorance to the industry.  I think a lot of people come into the industry ill-prepared and fail at it and there is this persona of how horrible it is to own real estate.  Even when I give them responses to these questions such as:

"I know it's not easy, but if you don't take a risk, there is no reward"

"Well I plan on thoroughly screening my tenants to mitigate the risk"

"I will evict the tenant if they don't pay by following the processes set forth by local legislation" 

"I plan on having multiple exit strategies"

It doesn't matter what you say to the nay-sayers, they still think you're crazy for even trying to get into it and that failure is a certainty. 

But I just use it as fuel to work even harder at it.  I look forward to seeing them later on and telling them how well I am doing at it.  I am not satisfied just working my job and collecting a pay check (i love my job and I have a very good career).  I just need more.  

Sorry for the rant, but it's just frustrating how many people want to see you fail at real estate because they heard it's not easy.  

Well since they have already done the work, you should at least know how many guys were working in your property, and for how many days....I hope. 

Simple math:   (Average hourly rate) * (crew) * (days) * (8 hours) = Labor cost

Then get the material cost.  I'm sure you can look up the model number of the AC unit that they put in and type it into google.  He probably paid 25% less, but I wouldn't worry about that. You should be able to throw a number at the wire and panel cost as well as the cost of the paint, brushes, misc tools. 

Add them all up and see if they are close. 

Also, if you are too lazy to get quotes then the work should be on Time & Material, which means they should submit daily work slips to you showing how many hours they have worked and what materials they bought.  They are allowed a general conditions percentage (10-15%) for insurance, fuel, car insurance, builder's license, etc. as well as a profit mark-up (usually 5-15% depending on your agreement with them).  

When architects change the drawings and I don't have time to get pricing from my sub I have my superintendent sign daily slips that track the time and material.  I will not pay for any work unless it was documented.  

Never use square foot numbers.  Break everything down into its parts.  We always use the CSI Divisions to break our estimates down which is standard practice for the industry (Google CSI format if you don't know what it is).  This will help you break down the work into its respective cost codes. 

Every project is different.  Different location, different scope of work, different economy setting, different subcontractors....EVERYTHING is different.  

Break the project down and assign scheduled values to each activity.  

Coming from a contractors prospective, we never charge for bids.  On occasion, we will charge for our "preconstruction services" but we make it very clear to our client at the beginning and we will give them a hard cost before we move forward.  If its a small job like a few million bucks we won't even bother, but some of the larger developments we do take a lot of our time and its a full preconstruction service to get bids from our subs, develop a proposal, value engineer the project, work through architectural, structural and mechanical details.  

If you are using the same contractor over and over again to solicit bids over a very short time, it is a good idea to pay them for some of their time or they will stop bidding for you all together and you will quickly lose a lot of your contractors in the area.  Again, this is your at your discretion, unless an estimating fee was established before he bid the work.  The other way to negate paying them for their time, is to give them a job once and a while and they typically will waive any estimating costs.  

Bottom line, a contractor should let you know ahead of time before charging a fee.  It's like someone asking you to go to the Patriots game with them and then asking for money for the ticket after the game.  Should you have asked if he wanted money for the ticket beforehand?...probably...but I think it's natural to assume it was for free if they weren't up front about the cost.  

A hard pull doesn't take too many points off your score...you'll get them back in a few months anyway. 

I wouldn't worry too much about it.