All Forum Posts by: Tom Mole

@Udayabagya Halim, I took at look at the BiggerPockets list of CA REIA's. I believe the two you found in LA are Sam's Real Estate Club and Prosperity Through Real Estate. I've been to both multiple times.

I've stopped going to Prosperity Through Real Estate because I did NOT find it to be a good networking environment. Though there is usually a large number of attendees I found it to be little more than a platform for selling the latest shiny object. I've gotten the same sort of feedback from others tried to warn me of the same thing. Nothing wrong, if that's what you're looking for, but that's not what you're looking for. You need to find a good wholesaler.

On the other hand, I have found Sam's Real Estate Club to be a great networking opportunity. Networking is encouraged there. Sam's opinion is that your networth is a direct function of your network. If you can't find a wholesaler there, you're not trying. You'll find private money people, other rehabbers, market specialists, etc. If you don't find anyone to work with in the current meeting, ask Sam. He will link you up with one or more good people. I'll nearly always be there. I'm the loud and obnoxious guy. Find me. I'll introduce you to Sam. I think we'll be fast friends.

I know a number of other networking opportunities that I could endorse, but since they don't appear on the list BP provided I don't want to mention them in the forum. I don't want to tick off the moderator. 

All the best.

Do you have a good idea what you're looking for? You'll need that, so be ready with your shopping list.  Pretend that I'm your wholesaler ('cause perhaps I will be if you turn out to be a good buyer). Allow me to inquire:

• What locations are you looking to invest in? What areas would you disqualify?
• Are you looking for SFR's, multifamily or something else?
• Assuming SFR like most folks, how many bedrooms/bathrooms? How many square feet of living area? What size parcel?
• Do want major rehabs or minor "floor and walls" fixers?
• What discount on ARV do you call a great deal?
• Can you do your own due diligence (i.e. do comps and run the numbers)?
• What sort of neighborhoods do you consider?
• How many projects a year can you handle?
• What price range works for you?
• What do you plan to do with the finished property? What's your exit strategy?
• Do you have the funding to take your project from acquisition to exit?

...and now the big one....

• If I bring you a deal that meets your criteria, but you found out that I would be making an unusually large assignment fee, would that make you uncomfortable about going forward with the deal?

The fundamental service the wholesaler brings you is the negotiated and structured deal. They get the deal under contract for you then they sell you the contract. There's a lot that goes into that, so don't take it lightly. A good wholesaler can provide you a deal structured to make you a reasonable profit without you having to spend the time and frustration of finding it. That's BIG!

For the most part when you buy the purchase contract the wholesaler's job is done. Some wholesalers will nurse the contract through closing, but don't count on it. If you feel you need help with the project after the wholesaler has been paid, find a more seasoned rehabber to partner with until you gain a little more experience.

All that being said, keep in mind that not all wholesalers are the same. Many people that call themselves wholesalers suck at the task. Make sure you do your own homework. Vet your wholesaler as you vet the deal. Trust, but verify.

Happy New Year!!

@Kurt P., to whom do you send your rent checks? Perhaps your property manager knows how to find the owner. As they say "Follow the Money".

Is it possible that the owner stopped making payments because he has deceased? Have you checked the probate court.

As you haven't found the owner directly, perhaps you could seek out a relative. Someone with a bit of skip trace experience should be able to help. Do you know a good PI or perhaps bail bondsman? You should make friends with one, if not. They can be helpful in a case like this and bondsmen often have a need of someone to take collateral property they've acquired off their hands.

If you find the owner (still viable and breathing), get his story and then make him an offer. If he doesn't seem interested, make an offer to the foreclosing lender to purchase the note at a discount. They may be hard to reach as well, but you should still try. There may be some information on the documents to acquired that would point you in the right direction.

You are so fortunate to have had destiny find you. Take the best advantage of it. What a great way to start 2015!

Happy New Year!

@Mike C., 

Welcome to BP! You're in the right place. Don't get discourage right away. Wait until you've been at this for a couple of years... then get discouraged. :D Actually, just hang in there, keep asking questions and keep learning. 

The silent part of the game is patience. The most successful investors don't depend on the cash in their bank accounts to capitalize investments. They don't shop where everyone else is shopping and they use other people's money, so get a copy of @Brandon Turner's book, The Book on Investing in Real Estate with No (and Low) Money Down. When you know what you're doing, price will no longer be the biggest barrier to entry.

Again, welcome to the community.

Happy New Year.

Hi @Annette Torsarkissian , 

This is a kinda hot topic for me personally. I view bandit signs as graffiti, but by most accounts effective graffiti. I wrote a long, rambling reply to your topic, but something went wrong and the post did not show up. Allow me to summarize.

In the city of Los Angeles, yes, bandit signs are illegal. You could be fined for each sign the city finds. That being said, you probably won't get into trouble. The city usually has other, more pressing tasks to ignore. In some neighborhoods no one really cares. In the nicer neighborhoods your signs probably won't stay up long enough to matter. Even if you do get popped, you'll likely be in a position to write it off as the cost of doing business.

As for the effectiveness I've been told that your phone will ring a lot, though the quality of the lead may leave a lot to be desired. You'll likely find a lot of other "I Buy" guys calling you. The technique lacks novelty. You may find other means of marketing more effective and less trashy, but it's up to you. It can work. You can find motivated sellers. It happens.

Happy New Year!

@Account Closed, thanks for the URL. I'm adding it to my bookmarks right away.

@Ronnie Neal, I've got to agree with @Kevin Page . The way you opened the topic left me thinking that you're asking a moral/ethical question, like "how do investors sleep at night?". I now understand that you're asking how does the process work.

I'd suggest that you hook up with an experienced investor in your area, someone that you can meet for coffee, who invests in foreclosures already and can show you what to do. You can usually find someone by putting the word out there that you're looking for someone and networking your butt off. Find and attend local real estate investing clubs, ask the nice folks at local community banks, visit every title company and ask them for a referral, etc. Make friends, a lot of friends.

To your original inquiry, however, there are several ways to invest in foreclosures. The first and probably the simplest is short sales. You usually find out about them from a realtor's listing. You negotiate a price with the owner, who then asks the bank to accept the offer. This could be tricky, since you're asking the bank to accept less than what they're owed for the property. There are a lot a ways this can go wrong, so it often takes a long time and the outcomes are uncertain.

Another pretty obvious way is to attend the foreclosure auction and bid on the property. For that you'll need all cash up front, which cuts a lot of us out of that process, but if you can buy at the auction, there are probably a good number of deals to be had. Be careful and do all your homework. Make sure you know what you're buying. If you buy a house only to find that the city just razed the building, your dream investment can be a nightmare.

Maybe you'd be just as happy tracking the properties that go to auction that no one bids on. These become REO's (Real Estate Owned) for the bank. Banks are in the lending business, not the real estate owning business, so they would usually like to get these REO's off their books expeditiously. Make them an offer and do it as soon as possible after the auction, before the bank incurs any more costs. An REO sale is just another "arm's length" transaction, so you don't necessarily need all cash up front like at the auction.

There are a couple more approachs, but I'd say get some experience built up first. I hope this helps. Let me know if you have any more questions.

Happy New Year!

@Micah Brown, the determination of how ethical something is, is what they call the "smell test". In this case, you're talking about people about to start the foreclosure process. Given the current political climate I'd be very careful about getting the "smell" on me of taking advantage off people who've fallen on hard times. You could end up explaining to a judge how what you did was ethical and in the best interests of the homeowner.

I'd like to know more about why your neighbor is so interested in providing you sensitive information like that. Does she hope to profit in some way? Perhaps she's figuring that you could buy some of these owners out and get them off her companies books. Maybe it would be better for her to put you in contact with someone in financial institution that would be able to let you purchase some of the NPN (nonperforming notes) stock at a discount. THAT would be ethical. In fact, I'd like to have someone like that living next door to me and I'd reward her generously.

As of this post, IMHO, it would be unethical to take her help until you know more about what's in it for her. Your ethic sense is protecting you. Respect it! You feel uncomfortable with this as it is, so resolve it until you are comfortable. You need to know that what you're doing is ethical, then you'll be at ease. Ask more questions, don't just give up. This could be a blessing or a curse, but you won't know until you ask more questions. Here's the biggest question to resolve honestly:

• Would contacting the people she offers you help them more than it helps you, your neighbor or her company?

When you get the answer to that you'll know whether it's ethical or not.

Happy New Year!!

@Nicki B., congrats on getting started and getting advice. Have you sent a colleague request to @Mark Parzych yet? He's apparently in your area and at your same experience and ambition level. You could probably learn a lot from each other. REI is, after all, a team sport. He strikes me as a highly analytical type, like me. We sometimes have trouble getting past the analysis phase, but boy can we run the numbers. If you could use that skill, consider partnering up.

Like Mark, I took the info you put in your post and found the listing on Zillow. It looks like a good find. Please indulge me a couple of questions:

• Have you visited the property yet? What is the neighborhood like? 
• Who lives in the neighborhood (low income, worker bees or ritzy soccer moms with disposable cash)?
• What condition is the house in? 
• Do you know a trustworthy construction crew that does quality work?
• Have you discussed the possibilities with your HML guy? Does he need you to have "skin in the game"? Are you certain that he will lend on ARV?
• How do you plan to fund rehab and construction costs? 
• Would a partner help?

I have more, but this is good start. I'll sent you a colleague request in couple of minutes. If you want, we can trade contact info and go over the more specific details. This could be fun! I'd like to see you make it.

@Maxwell Lee, look into using a sale-lease option to avoid deed restrictions. Structure the deal so that the option fee covers what would be your assignment fee. Open an escrow that closes the day after the deed restriction expires. Credit the lease payments to the buyer at the close of escrow. And, of course, check with a local real estate attorney to be sure this won't piss off a judge in your state.

This is just a suggestion to be considered, not a recommendation as I have never done business in FL. This is where I'd start if I were faced with the situation and goals you mentioned.

Happy new year!