All Forum Posts by: Brandon Schlichter

Well.........

I handle foreclosures for banks as a listing agent, I had a lady call me the other day about a listing.

The bank gave me the loan information so i could use it to determine the worth of the property.

Property was initially bought in 2001 @ $120,000 95% LTV.
Property was Mortgaged in 2005 @ 135,000 100% LTV

Bank foreclosed on it in December 2006 with a remaining mortgage balance of around $132,000. I've set the value for the home in the $120k-$130k range.

RealtyTrac has the property posted at $85,000 remaining balance!

Its not a good system at all..........I know alot of REO Real Estate agents that hate the program because they get calls on properties with people thinking the realtytrac price is the actual going rate of the home wanting to put offers 40% below list price.

There's other ways to skin a cat, and i'd NEVER EVER subscribe to a program like that.

Hi all , I'd post and find some insight on what i'm doing in my venture into REI.

First off , I've been a real estate agent for a year now, which really helps me locate good deals, and also gives me a % discount on whatever I buy. Right now my strategy is to buy home at around a 60-70% LTV and land-contract. My hope is to be able to cashout refi the homes for near the land contract price, but still within margin of the new mortgage so i have a little cashflow comming into the property. My goal is to then use the cashout money to invest in other properties, this way I can secure other lower equity properties , or riskier investments. In general, is this a good strategy? I'm putting together a deal that's looking like this .

$46,000 Purchase price (Needs $5k max in repairs) with Comparable properties running in the range of $80,000-90,000. Land Contracts in our area are becomming more popular with the rate of foreclosures and bad credit want-to-be home owners. The LC range for this home is in the $725-750 area. I believe i could cash it out enough to put 5% down on several other properties (Got my eyes on 2 which are running at about 33% of real worth).

Any insights?

Anyone here from central Ohio? Just curious , I'm a agent looking (Of course) for clients in central Ohio. I'm working on being able to provide investors personal MLS access (Indirect access) To the MLS for evaluation. I've been working on a system to provide more complete access for investors for quite some time but haven't had too many bites on people wanting to try the system. Anyway , if anyone wants to know more , please PM me.

Thanks!

Yep , it varies from brokerage to brokerage. Remax for instance is one of the largest franchises.....well , actually the largest that has a culture of charging desk fees (Although it isn't the case for every single one.)

The lowest i've heard for that particular brokerage is $600 per month and you don't have any office , just the website and virtual support. Highest i've heard of was a $3,000 per month desk fee. The benefit to that system is the comission split is 100% , so when you close a deal you get 100% of the comission.

Alot of other brokerages and companies do a split. IE every time a agent sells a home , 50% goes to the brokerage and 50% to the agent. Some companies do upto a 90/10 split if the agent sells X ammount of houses.

Agentwise , there are pros and cons with each.

If a individual is selling a property that at one time was a primary residence, but has since been rented out to individuals. Can that person apply for a 1031 exchange for a property of equal value?

I haven't read the language concerning a 1031 as of yet in detail but my question is that could a person do this sort of like the 2.5 year primary resiedence exclusion (Differing capital gains on a primary residence). Renting it out for a short period and then moving in?

Just depends on your lender. Some people use 2% , some use 3% as the rule of thumb , but as a Real Estate agent , i've never seen any rule of thumb work because most of the time the seller is willing to pay for some of the costs. Then the bank may decide they want certain inspections, personally right now i'm running about 7.5% nessisary to do close on a house with 5% of that being down. As i said earlier ,ask a lender what the closing costs will be , some of them may be static (IE $500 for appraisal , $400 for processing , $300 for underwriting) So in that case its not a %.

Tried any local lenders ? In my area (Central Ohio) there's about 10 different grant/bond programs you can go through , with one being a $25,000 to purchase a property grant for FTHB.

As for investments , i know of none.

Now , this is all comming from a agent in Central Ohio. Nothing i say should be taken as legal advice.

"If" I were you , i'd find the local board of Realtor purchase contract and either go over it with an agent or attourney. I live in central ohio ,and most counties have different contracts with different contingencies and rules. IE in my county we use the Columbus form , but sometimes i run into a southern Ohio form (SVAR form). Both are different on who pays for what , in Columbus the seller pays for title insurance , but that's not the case elsewhere. Get a standardized board form ,and then go from there. Our board had many , many attourneys go over the form and make sure it was great. Lots of buyer protection , more so than any single attourneys could make (I had heard that dozens of attourneys were in on the new CBR Contract).

Closing costs vary from area to area ,and lender to lender , make sure you get a Good Faith Estimate on what the lender estimates their closing costs to be , along with points , processing ect.

I'm a agent and soon to be investor ,and its amazing to see how little i have to put into these investments, yet a good portion of it goes down (Right now i'm at about 4k per investment).

<warning>This is comming from a Realtor</warning>

IMO there's definately pros and cons concerning using a Realtor/Agent in the search for tennants. In my office (a smaller office but a national franchise) We get quite a few calls from out of town individuals looking to rent a home or apartment in town , for me personally its quite hard finding rentals when most landlord don't even opt to put something in the newspaper and decide on just putting a sign out.

I figure renting is just like selling , the more the better , and the more fish you got in the pond , the easier it is to take the best one (Granted you don't interfere with any discrimination issues).

IMO , get the Realtor involved on the screening process , have them run a background check , credit check ,ect that way there's less work for you to do.

Ok , maybe everyone can provide some general insight into strategies or tips for my new venture.

Anyway , i'm looking at buying properties to use for a hold-then-flip strategy. I've found several properties i can buy at 60-75% FMV.

I need to know good , effective methods for finding quality renters and the paces to put them through to get the best. I'm planning on offering owner financing/land contract for the property if i can do it in a timely manner once the property has been refurbished for renting.

The basic methods of advertising that have been sugguested have been Craiglist , the local classifieds, premise sign and a few rental websites. Are there any other good sugguestions for sources to advertise?

Now , for screening , i'm under the assumption that the basic things that should be followed are credit, criminal and a past landlord check. I'm also planning on dropping by the current homes of potential renters to valuate their quality of life before acceptance.

Another thing that was sugguested is making the renters responcible for the first $25 of any repair on the property , thus keeping down my expenses and their complaints. A thought i had was also getting a home warranty , my cost is going to be around $370/yr with a $55 deductible , covering everything outside of roof of the property, with the other strategy , my cost per covered repair will be $30. Would this be a good plan at a cost of $30ish a month for warranty?

Thanks!