All Forum Posts by: Tal Eisenberg

Chris, this was actually a different auction that has gotten postponed. I got lucky on the PA auction as I was the broker and the PA did pay a commission. To answer your question about the note - whatever proceeds there are from the auction go to whatever Liens there are in the order they are owed.

I think it's uncommon in most scenarios. I just happen to have a few passive investors who just want to know if there is a good deal around. If it's a good deal they're willing to pay me the buyer's broker fee. I've also managed to negotiate equity in the building as an alternative. My fee is equal to about 20% of the 20% down payment for a mortgage allowing me a stake in their investment.

I plan to progress into more wholesaling instead of trying to get a commission from my buyers, but with an auction it's necessary if I don't want to put the deposit down myself for fear of not finding a buyer and not being able to walk away if I don't.

We did go see the property numerous times. The exterior of the building was in excellent shape. The interior we got to see the basement which was in excellent shape (along with the boilers) and we saw the common areas which was clean and also in excellent shape. The only thing we did not get to see are the apartments themselves. I was able to make a rough estimate of rent roll based on property taxes paid - in NYC the city shows online what number property taxes are based on income of the building.

Size of the building is 8100 sq ft - 8 apartments. Most buildings in the area are about 2000 Sq Ft with 3 apartments. Rents for 2BRs 1 Bathrooms in those buildings typically run $1400-$1500.

Jon,

They were not using a property manager. It looks like we will be knocking on doors, introducing ourselves and asking to see their leases.

This was not a foreclosure auction. This was an estate sale done by the Public Administrator because the owner died and there were no heirs. I don't think in NYC the leases can be voided that quickly and easily. Tenants are VERY heavily protected in New York City. I think this is especially true because it's not a foreclosure.

Your point of if they signed leases after foreclosure started makes me now start to wonder when the owner died, and if tenants stopped paying because they know that he did.

Chris,

The clients did take an attorney who ran title, which will be insured (A line of credit from the bank is being used).

Sherry,

The public administrator did run title. Whatever liens may be on there they pay with the proceeds of the auction. I had my title Rep also search for me before I ever saw the PA title search and it came up clear as well.

Now does anyone know how I can find info on the current tenants, their leases, security deposits,etc.? Closing is at end of January

Maryann,

Originally the plan was to buy and hold for income level. Since this post, we have actually identified and purchased a beautiful building which we will be holding for income. However, I am a real estate broker by trade and I am very invested in seeing the neighborhood grow and develop. I have now shifted to trying to become a short sale agent myself. I have a list of investors who want to buy in the neighborhood. I myself may invest too if the property is right....do I still use the same strategy?

Tal

Hi Everybody,

I acted as a broker in a Public Administrator Auction which my client won. This is the first time they have won and auction and the first one I have been a part of - at least winning one. I am helping to the closing and beyond. Basically need to know the next steps and have a couple of questions.

This property comes with a free and clear title. There will be a mortgage on the property. Contract signing is in a week - closing about 3-4 weeks after that. Do they need an attorney for the closing if the contract is a standard one used by the Public Administrator? Do they need to get title insurance even if it is assigned with a free and clear title?

How do we go about finding what the actual rents/lease terms/contact info are of the current tenants?

I'm sure I'll have more questions as we go along but I think this is a good starting point.

Thanks,

Tal

Hi All,

My father and I have been looking to buy property in Brooklyn, NY.

We have been going to auctions. No success yet but learning more every time. I have a good team of resources i.e. title, mortgage broker/banker, attorney, etc.

Another strategy we're trying to employ is the short sale. I have a list of lis pendens that range from today to from a year ago. I want to pick your brains to see what you think the best strategy is, both nationally and specific to NYC.

These are multi family homes usually 2-3 family (sometimes with a store), USUALLY owner occupied. About a month ago, my dad and I drove to the houses we were interested in and dropped off letters saying I'm a private individual looking to buy a home in their area. I also included that I am aware that they are facing foreclosure and that I would like an opportunity to discuss a financial arrangement. I included my phone # and private email address. I am thinking I need to write a better letter.

I have also today registered the domain [REMOVED]. Can this be of use to me in my letters?

I would love to get your input!

Thanks in advance for your help.

Tal

So my partner and I are passing on a property that is going to auction. I am also a licensed broker and have a client who this is perfect for. As I understand, the noteholder doesn't pay a broker fee. The buyer is willing to pay a broker fee if he wins the auction. I have done a lot of the work, doing comps, checking title/liens etc. What do you think is a fair amount?

Thanks,

T

I agree with you both Jake and Eric if that is my father's reasoning. The thing is we wanted to be really conservative at our first auction. We had continuously said that up to $550k was probably a good deal. However, this weekend I have been crunching the numbers and at $1200 rent using the 50% rule at a 7% 30 year mortgage 20% down you are still making 12.1% CoC return.

Ok, so went to the auction today. Our bid ceiling was $450k. The holder of the 2nd mortgage won at $460k. I found out he is willing to sell, has a buyer in place already at $525k. My father, the actual investor and his partner want to offer $510k all cash. They are happy with a 10% net return which should be the case with this property at that price. However, part of me thinks he's just upset that someone was able to snag the property at just $10k over our price. Thoughts?