All Forum Posts by: Vikram C.

I agree with Joel. I think you have priced it quite reasonably.

I have never sold a commercial property, but I would expect the listing agent to do it.

It's definitely worth it, Bryan. When I was looking for a MF to buy, I used both CoStar and Loopnet. The former has a nicer interface but the latter has a bigger audience. I also spoke to many commercial brokers and chatted with them about the services and they all said that they get more sales from Loopnet.

Regarding whether to list it with a local commercial broker, I would probably do that because commercial RE sales, unlike residential, is still a bit more than just listing a property on a database.

We don't low-ball much either. Once we know our max buying price, we just offer enough below it to leave some room for negotiation (counteroffers, etc.).

Business requires constantly dealing with uncertainty and many people, including very smart ones, find uncertainty very stressful to deal with.

I have attended a couple of AZREIA meetings. Nothing useful came off them except for a lot of phone calls from newbiews who wanted me to invest with them.

They also regularly conduct seminars, which are just thinly disguised marketing programs. I suspect this is par for the course for these REI clubs.

You may have to attend a lot of meetings before you meet someone useful. But, on the other hand, these meetings are cheap so you do not lose much by attending.

Yes, the reason we look only at annualized return and not by the property is because we are investors. Our job is to allocate capital in the best possible manner, and that means earning the highest return over a period of time on that capital at an acceptable level of risk.

To maximize your annual profits, all you need to do is to maximize your annualized return. If, instead, you try to maximize the dollar value of profits from a specific deal, you will often find that you make less money over the course of the year because you let your money be locked up in one deal for too long.

I actually went to a couple of REI club meetings when I was new to Phoenix and found them to be a total waste of time. Most people who attended the meetings were either non-experts trying to pose as experts, or people seeking to learn. I am not sure if REI clubs are as lousy in other cities as they are in Phoenix, but I would not plan on gaining much from such organizations if I were to expand into another city.

I think considerable expertise can be gained by analyzing data thoroughly. As J Scott has mentioned, it is important for the OP to first know what a good deal looks like. With flipping, the most important number to know well is the ARV. This requires checking out houses that have sold. You will need to evaluate the house in terms of its location, square footage, levels, basement, interior finishes and upgrades, views, landscaping, etc. If you do enough of this, you will become good at estimating the ARV of properties.

The second-most important thing in the flip business is estimating the rehab costs. Again, as J Scott has said, you should become very familiar with how to do this.

I think your time will be much better served acquiring expertise than in attending REI clubs where you are likely to meet mostly losers.

Here's what I would do if I were in your situation (which I would not be in, of course).

1. Contact the trustee asap and see if they can set aside the sale to you as an error. They are not legally obligated to do this but I have seen it happen once in a while. If you bought it through a bidding service, check your contract with the service to see if they guaranty lien position and ask them to solve the problem for you.

2. Recently there were a couple of dumb investors who did the exact same thing as you have done. Instead of accepting the cost of their stupidity, they contacted a local newspaper and managed to get it to publish a story about how banks and trustees are terrible people costing innocent people money. The bank did not want bad publicity and decided to cancel the foreclosure and return the money to the buyer. You can try that route. (It makes me very upset when people try to cancel deals but you asked for ideas and this is one possibility.)

3. Check the county recorder for notice of default and notice of trustee sale on the 1st mortgage. If the first mortgage has not yet been foreclosed on, you should immediately start negotiations with the lender to try to work out a short sale. (You have essentially bought a property subject to the first mortgage.)

4. Contact a lawyer to see if you can get out on some technicality. Banks have been flooded with foreclosures and I see a lot of foreclosures that have some minor error. You live in a liberal state so you have a shot at painting the bank as an evil organization and can probably get it to settle with you if there is even a minor error in the foreclosure paperwork or process.

I am sure there are some other angles that you can work as well. But the 4 things mentioned above are things that I have seen happen and you can give them a shot.

Therein lies your error. When you say that you can acquire properties for 40 cents on the dollar, it means that you can acquire it for 60% less than what it is worth now. Not what you think it will be worth at some point in the future.