All Forum Posts by: Mark Freeman

I see where you are coming from Joel. If I remember right from a previous thread, your goal for next year is $200 million in gross sales and $5 million in gross commissions?! You don't have time to play around with rehabs, home inspectors, countless FHA re-inspections, failed appraisals and the like. You are just tired of seeing $10k to $15k or more of equity go past you without grabbing it because you are concentrating on something much bigger. I say grab it and market to cash buyers only. You are making huge money per hour and can't afford to get more than a few hours into one of these deals, but it would be nice to make a little money on the side in between some of the drawn out commercial deals. Nice play.

@Mark Braun

The purchase price has to be more than the outstanding loan or you have a short sale situation. Assuming there is equity in the property at the purchase price, the buyers funds will pay off the loan first and whatever is left over after fees goes to the seller.

Joel, I think you have a good idea. When you find value and have cash, I say grab it. It sounds like you want to unload it quickly which can work well. I just make sure I do these quick flips are in areas with tons of buyers. If I buy a fixer in a small town, I can sell it fine if I get it ready for an owner occupant and a loan. (I understand that your not interested in rehabbing and selling to non-cash buyers). It could be difficult to find a cash buyer for a fixer in some areas though.

My second deal above was in an area I never would have felt comfortable doing a rehab in, but I found value in an off market deal, and I couldn't let it get away.

@Joel Owens I have done two of those in the last 6 months. Found off market deals, bought them for cash, and immediately listed them with my agent. I held out for top dollar on them as apposed to leaving meat on the bone the way the wholesalers try to do. I sold the first one, as is to a hard money flipper for a $35k profit.  There was a little drama with the hard money situation and it took almost 2 months to find a buyer. I ended up holding the property for about 3 months. (I bought a three month insurance policy and was glad it worked out).

The second one was in a class D neighborhood and had some light fire damage. Between the neighborhood and the fire damage it was tricky finding a buyer. In the end I sold it to a cash buyer for a $14k profit and ended up holding it for 2 months total. (I didn't negotiate as well on this one on the buy side and if I'm in the same situation again I think I could pull in an extra $5k to $10k).

We have a lot of competition on the buy side for listed fixers in my area. I have gotten sick of missing out on properties to people who miss calculate the ARV and overpay for everything. It makes it super difficult to get flips off of the MLS. I decided to use this to my advantage and let these people bid up my fixers too. For example, the first one I sold needed a lot of work and I figured I could have sold it for about 35,000 to 40,000 dollars more if I had gone to all the trouble to fix it and market to an owner occupant. After expenses, I wouldn't have made much more money, with a lot more trouble. The flipper I sold it to listed it for $100k more, after rehab, than what I sold it to him for. It's been on the market for months and will NEVER appraise even if they find a willing buyer.

@Tyler Bardwell

Start looking for deals everywhere you can think of and have read about. Look into a home equity line of credit to fund your deal. If you use your gift and find a great deal, good things will happen. You will find the money or a partner for a joint venture or you can wholesale it to another investor if all else fails. (On the flip side, if you think every deal is a good one, it might be hard to find other interested parties in the project and a wholesale becomes difficult if not impossible).

I started out without any money and a reluctant business partner - in my dad. He had some money and I knew if I found a really good deal, he would be eager to get on board. The rest is history, just put one good deal in front of another.

Finally, when you find it - PULL THE TRIGGER! You'll learn tons on that first deal no matter how well it works out.

@Andrey Y.

At this point I don't think you'll get them to call off the open house.  Based on that I wouldn't offer before the open house. (I don't want my offer shopped around). If I'm in your position I would probably go to the open house near the end of it and try and gauge what kind of action they had. If I couldn't get much of a read but I felt it would go for at least listing I would probably offer 1 or 2 thousand over asking or maybe even more depending on value and how often this type of property comes up and how many you want to acquire in what time period.

If you don't get it, find out what it went for even if you have to look it up on zillow or another site after it closes.  A majority of properties I've offered on I haven't gotten, but I try to learn something. See if you can find out how many offers they got. (This would be even more helpful if you find out before you put yours in). Then after you gather as much information as you can, think about what you might do differently next time to improve your chances. Most of the time properties I don't get have gone for more than I am willing to pay and I don't have regrets about letting someone else have them for that price. There was one a couple of months ago that went for a cash offer lower than my cash offer and I had my agent call to see what had happened. My offer hadn't been the highest either but the winning buyer made contact with the seller, even though offers were supposed to be subject to inspection, and convinced the buyer to take their offer. This buyer talked about all the repairs needed and said any higher offer would just back out once they did their inspections. (Kind of a strong arm tactic, but I guess it worked in this case or the listing agent was just full of crap)!

Good luck!

For 4 years I have regretted not buying a house that was super cheap and near my other rentals, but below my rental standards. I was way too busy to fix it up then, and knew I could rent it out cheaper until I could get around to it. Even at that time I knew that once I had the time for that kind of project, there wouldn't be any of those kind of deals left. I wish I had that house now, and as soon as it went vacant I would fix it up the way I wanted it. That said, I would get the house now and rent it out quick. Come back to it when you have time and rest easy knowing the house is yours!

@Andrey Y.

You have to know your market and recognize a deal when you see one. I have paid more than full price for properties many times when I knew that was what it would take to get them. (Based on competition from other buyers).  If I feel like I'm the only buyer for the property, for whatever reason, I try and get it as cheap as I can even if it is a good deal to begin with.

RUN!!!!

@John Weidner

Try simplisafe.com - I am not affiliated with them nor have I used them yet.  You can buy a customizable system that is completely wireless and have it monitored through a cellular signal that is built in for just $15/ month with no contract! I have looked into them a little bit, and heard their adds on the radio. You install the wireless components yourself and can move them from house to house. It seems like a great solution to me. Fortunately I have been investing in areas recently where I haven't had any theft problems, but I have had lots of tools and appliances stolen and that is why I looked into it a while back. I wonder if anyone has used them on BP and what there experience has been?