All Forum Posts by: Derek W.

For me it would be a interesting discussion of where you believe the market is going in your area. In my area I am buying subject-to deals like @Edward Powell mentioned of houses that might be slightly upside down right now, but the rent can cover the mortgage because we are appreciating in value and have been form the last year or so. I am willing to gamble in my market that houses will be worth more in the future than they are right now (purely speculator investing!). Do some market research about where housing prices are trending in your area. Do you guys boom and bust, or stay pretty flat? In California, we go way up, crash back down and repeat. That leaves room for some speculation purchases. Plus, I know that rent trends modestly up decade over decade and if I can lock in someone else's low interest mortgage I will have some plays in the future.

I have some units in high density unit-ville. There are lots of 4-rent signs all around me all of the time. But I stay filled. I am $10-20 cheaper per month than the average competition and I offer free basic cable for the first year. In my lower socio-economic area this is a tie breaker that I seem to win. I wouldn't walk from the deal. Just work harder and smarter than the other local landlords!

I would check the local zoning to see what options are available. Example: I just optioned from a local church who inherited it from a deceased congregation member an old grocery store sitting in a mainly residential area that the city allowed me to re-zone as residential units. I was able to get the zoning variance, get plans drawn up for an 8 unit apartment conversion and sell (wholesale) the project to a builder-type. I've also seen some amazing single family homes built from old churches. It all depends on what your local building department will allow. Then sky's the limit.

For years I've been watching and listening to this discussion. There are some people who argue that having a license gets in the way of some investing strategies. Hopefully they chime in to give you the other side of the argument. It does cost momey to maintain an active license. But personally, I can't imagine not having a license. It has allowed me many more solutions when talking with an owner about buying their house. Example: recent probate lead, after talking to the personal representative it became obvious that they didn't have a time crunch, a money need, or any other motivating factor. The house was clean, in a good area, and ready for sale. I told them the truth that there wasn't a reason to discount the property to sell it to me. I suggested they list it with an agent and get top dollar. They asked if I would please list it for them. So I was able to make a good commission ($405,000 sales price, 3% commission) after the court approved the sale. They have since refered me to two more people for future business. It has allowed me crucial MLS access to search for property, search comps, and list my properties after rehabbing them. You can use your local MLS to search for agents who are investor friendly to build a wholesale database. You can attend your local association meetings and network as a investor to build a bird dog network of people to seek out deals for you. You have access to almost any paper work form imaginable through your local association. Plus lawyers love association forms! You can advertise for credibility as licensed, finger printed, and bonded. (California requirements, not sure about other areas). If you are new to investing, you can always pick up some real estate sales work on the side while searching for your next deal to pay the bills.

Did you record a deed of trust (or mortgage) securing the carry back amount?

property managment/ negotiate with home owner vehicle: older Toyota Tundra
fun for around town: super charged mini cooper S

Buying outside of your geographic area is one I would like to add to the list.

I always meet my apprasier at the property at the time of appraisal. I make sure I have a very complete package for them with all of the comps and justifications of adjustments for all comps along with a list of "capital improvement" I will make to the proeprty to reach the ARV value. I work very hard to make sure that my appraisal comes in where I need to. Study your comps and know that neighborhood better than anyone else. Explain to the appraiser why certain comps are outside socia-economic boundaries, are on the "wrong" side of a pysical boundary, etc. and why certain comps should be used. If you have solid comps to prove your point, and documentaion to support it, it will be hard to argue with. Good luck!

I do a ton of short sales, and BOA is not changing the language of their approval letters. Give it your best shot, but they are sticking stubborn on this. They are retaining their rights to a deficiency judgement even in California with a first loan only. My lawyer advises these people to jut let it foreclose so California civil code of procedure 580D can protect them against a D.J. If they pay the extortion money, close the short sale and don't get a full lien release, they would have been better off to just let it foreclose. At least it would be behind them with nothing to rear it's ugly head in the future. I don't understand BOA on this one, but apparantly a new policy where they plan to reclaim some of their loses over the years to come through deficiency judgements, huh?

With the recent changes in mark to market the banks aren't penalized the same way they were before. There is almost an incentive now to not have the bad asset sell. When it sells as an REO is when they have to take the loss on their books. Until then, they can pretend they are solvent. I believe this was changed with the intention of drawing out the foreclosure releases for years to come so the banks don't continue to delfate the markets and their assets.