All Forum Posts by: Steve Babiak

I agree that all of the posts are great; I'll have to come back later to vote, because I have hit my vote quota for the time being.

I think the rough electrical should go last out of the group of HVAC, plumbing and electrical rough-ins. If you have ever seen a plumber torch insulation off of wire, you will understand why. I also have encountered plumbing that somehow ended up with wiring wrapped around the pipes (partly caused by the wiring not being stapled or otherwise secured, and with enough slack that the pipe can get twisted with it).

The refinishing of hardwoods is also really dusty as pointed out above. A tack cloth to remove all the dust from the walls is needed. If walls were painted first, the paint may become dirtied enough to look like it needs another coating; if painting after, the dust still has to come off the walls first.

A great thread overall - and probably the one thread of the best quality I have read here.

James,

PM me if you want the rooming house investor's contact info.

How about one found in this thread:
http://www.biggerpockets.com/forums/12/topics/30662-checklist

James,

I can put you in contact with an investor I know (local to our area) who has a rooming house. In fact, it burned down last year, and they are in the midst of the re-build. I'm sure that they could give you feedback.

And whether the lender would want the rooming house as an asset on their books - well, they placed the loan knowing it was a rooming house, and when lenders make loans, they are aware that the property may one day become theirs. And since you work for a lender, you know that already; and you know that they never WANT any of those assets back. If / when they foreclose, it will get sold as REO eventually, unless bought at sheriff sale.

It's usually easier to sell one than three. If you get somebody wanting all three, they would probably be happy to take them one by one too. So, this would indicate 3 separate contracts, one per house.

Now, if they are part of a "blanket" type of financing, then you might have to move all three in order to move any of them. This might require you to take all or nothing.

Originally posted by Vikram C.:

Congratulations, Rich. Hope it's close to the cruise terminals.

I think they fly to those cruise terminals, so I hope it's close enough to the airport.

And Rich, congratulations on the new home.

Appraisers need this info too. How do you think they get it? From the MLS - the sold properties will usually have that type of info, and even pictures if they are really nice.

Originally posted by Rich Weese:

On the surface, this looks great. I'd be interested in joining forces with someone that does the legwork. Having bought a lot of foreclosures, the big key is the clear no title with no liens, judgements, back taxes etc.
I'm surprised at the 3K flat fee rather than a % of the price paid. Rich in FL

Rich,

Here's why I can see why the fee is fixed.

I saw one where the debt owed was around $107K, and the bank set the opening bid at $20K, and it got bid up to $25K. Same amount of due diligence would have been needed, but should the fee have been % of that bid or 3K? Now, on that same date there were properties going for over $300K - should those have paid a service a % of bid or 3K?

I have learned to do my own title searches in the county where I buy. A couple of reasons. First, the last minute reprieve; homeowner does not go to sale, but if you had paid a title company to do a search, you lose money. Maybe it comes back to sale in a few months, but then unpaid taxes, sewer, trash, etc can become new liens in the meantime - hence invalidating the old title search; a "bring up" could make this more affordable, but I don't know if it becomes free.

And doing my own searches, I can get a feel for the types of (shady) activities that happened. I saw one at the Sept 2009 auction get into bidding war, and it had over $1M IRS lien on it, with the bank lowering opening bid well below debt owed to entice bidders - guess what, it worked! That IRS lien was on the former owner, who happened to be roommates with the new owner in the same building both before and after the "sale" between them. I saw the judgments to new owner that were dated before becoming owner, and the address was the same going back, and I just got this hunch that the sale wasn't quite "arm's length".

Could I do this service for Rich? Maybe - but at last auction, the night before I had a list of 10 properties. First thing in the morning of sale, 8 of those had last minute reprieves. Then later in morning one of the two remaining got their reprieve, leaving me with one property that fit my criteria. Then, when the bank set the bid well above the published debt, it was a no go for me as well. So, to sum it up, if I hit my quota, and there were more to pick from, and there was no crazy bidding ... maybe. And that would assume that Rich wanted to buy in my county.

And Rich, I have some leads for you on experienced investors from my local REIA seeking transactional funding; should I PM you (I'm not a colleague with Will).

how about some of these:
http://www.zilpy.com/

http://www.rentometer.com/

this one does a bit more, but it can get rents (I think they are off the MLS):
http://www.finestexpert.com/

http://www.rentals.com/

http://www.mynewplace.com/

Originally posted by Kirk B:

I made this as a quick reference for myself. If you find this useful/errors please let me know.

Kirk,

Good idea to chart this. I believe I have found a mistake in your chart. The first 4 lines - per $1, per $5, per $25, per $50 - all seem correct. The next line is where the trouble begins. You have the rent there as $300, but I believe that the correct amount should be $100; if you were to multiply the offer number on the per $50 line by 2, you would end up with that offer amount shown on the $300 line (more or less), but that would have been at $100 rent since we just multiplied by 2.

And every line below that is also off by $200 in that original chart if my computation above was accurate.

Please post back if you agree or disagree with my finding on this.

If you are wondering how I discovered this, I had one I looked at recently where rent was $1000, and offer limit was around $70K for 7% rate; comparing that to the chart shows a big difference. Now I would say that the $60K number you have for 7% rate fits for $800 rent; and then I just worked backward.