I believe Overbudget might have the number one way to buy in especially this day and age.
He says he buys estate houses .
This might should have been an interview and there might still be one , but I thought Id open it up again[once again] to the techniques of buying real estate .
Ive exausted the repo market with no success. Im now ready to move on until they have held these houses long enough. I need another play to run on third down and 20. The 110 percent loans with nothing down have this market well out of reach. This type of property is still in sad shape physically. Theres not really a difference in looks . They are still the slime balls they have always been except now they want retail. The banks at least are hiring them cleaned up to some degree as has been discussed on here at lenght as another source of work. They are still priced at retail in the best senarios if not higher waiting on another 110 percent loan. Its only a matter of time this process will go bust just like high interrest credit cards. Unless the goverment keeps footing the bill . Who knows but for now its out of reality.
I just witnessed an estate house sell across the street . The kids wanted the money and they wanted it now . They had not paid the money on the house and it was certainly a gift so they priced the house below market . Selling price ;118,000. Estimated value ; 180,000. 3500 sg ft .
Im not in good health and my plate is over flowing with work I cant get done . I passed but I was called and had first shot at it . I knew I couldnt rent it if it didnt sell so I was on the line to pay for it with out an immediate return . Renting has always been my exit plan to properties that dont sell immediately. I should have thought about it and chose to hire the work done . I passed up a years salary in these parts that was sitting across the street which would have been sweet sweet in the gas crunch and time value. I regress. The deal of the year for me . It would have just taken another approach than id customary for me .
I wrote all that to say were gonna have to do things differently than last year or the year before. We must find ways to beat the hard times if we are to survive.
Anybody that says they arent set back by the current conditions are either blowing smoke or they live in a very rosy place I havent heard about which is possible .
The floor is open ;
Tim
Edited 6/11/2008 7:00 pm by Mooney
Replies
Opps , before this little story of mine gets to sounding too rosy;
That house needed 20 to 25 grand materials and labor to get ready to sell as a top listing . It needed updates and some new stuff to make it top out.
Tim
There is one school of thought that says things should be going better for you right nowThe reason?Because money has tightened up and you have LESS competition than you did a year agoThe little guy can't get financing to buy the investment houses So you should be in a better position
The reason thats not the case is because of the goverment . They are selling them again to their over retail buyers. They arent selling to investors.
Tim
You might have missed a post that wasnt addressed to you .
What do you have ?
Edited 6/11/2008 7:24 pm by Mooney
Edited 6/11/2008 7:25 pm by Mooney
MRFIXIT, suggested providing expensive upgrades to existing houses to make them attractive .
If we take that deeper we have enough for another thread but IM thowing it in this one.
Some of you know my wife is now helping me in my business . She has ideas she wants to try so she got to try one . In the last house we sold she did expensive upgrades at least to my estimation. There was a house up the street that sold before ours that was plain jane with no extras . That hurt . We ended up with the same price but had to wait longer. They customer saw ours first . So ours was picked over and we thought we had it beat soundly . The lady wanted an open floor plan that left out the wall between the kitchen and living area . Thats it .
Actually theres a better buy down the street thats about to go under . Reason; it as tile floors and they know its the problem. I would carpet over it and roll but it has sat for over a year unsold . Theyve quit mwing the grass now so I figgure they have given up. Buyers could have accepted tile and saved 20 grand but they didnt .
Tim
i agree, we must find ways to beat the hard times if we are to survive.
i know that volatility is where money is both made and lost. i have no problem losing money, what i can't quite figure out is how to make it.
i can't offer much hope or help tim, it looks to me like we are in stagnation economically for some years to come. the world has been changing. the united states is no longer the economic force it once was. this is going to cause dastic and dramatic change at home. i only hope i can recognize whats going on and figure out what to do about it.
i thought last summer that gold would be a good buy, but i didn't want to lose my savings. i am afraid of what might happen with speculation running rampant and i don't have time to babysit it to make sure the bottom doesn't drop out from under me.
i myself just recently missed a HUD house colse to where i am now renting, as soon as i found it i went to look but the next day they accepted an offer. i saw it on a weekend, and by monday morning it was gone. asking price was $45,000 and in a neighborhood where it would sell quick for $75,000. it might have needed a little work, but not much. as you say i could always rent it for a positive cash flow, i'm sure i could get $500 a month for it. i keep looking but its a needle in a haystack to find a good deal.
Well Im like the Lakers right now . I refuse to give up .
I know this ; Someones making money from this . Everyone cant be losing .
Rentals are doing good but its not enough to stand alone for me . More rentals would certainly work but its a lot more physical work. If I was 30 yrs old Id dive deep.
Im wanting less rentals because I want less work.
The estate house I saw sell and building rentals for sale is the best two Ive seen.
Building or buying rentals to sell is no risk that way I look at it . They make the payments and sell full up. Im gearing towards that but I saw that house sell too.
Tim
Tim if you really want to get some feedback on your house you need to have realtors show the house and then that realtor will provide feedback and tell you exactly what her buyer said about the houseSome examples of negative feedback are as follows:"I hated the old fashioned sculptured carpet""There is no master bathroom""The bedrooms are too small for my furniture""My furniture won't fit in this house""Your house is vacant and it just feels empty""the house is dark and dreary"If you want feedback about your house, take pictures and post them here at BreaktimeEveryone here will criticize what you've done and tell you painted the wrong colorsOr your furniture doesn't look rightOr you need to consult an interior decoratorJust don't take it personally. But I think your house needs to appeal to the womanI am helping a woman buy a house right now that is smaller than some of the others but the house she wants has granite countertops and she is going to ask for the stainless steel refrigHave your realtor show you a home in your price range that has been professionally decoratedYou won't believe the difference it makesYou are good at building things. You are not good at decoratingJust my opinion
Why do buyers want more than there means ?
Why dont we have buyers wanting less ?
My experience is that people don't like what they can affordI ask them how much they want to spend and they tell me and so I show them those houses and they don't like them
I'll drink to that, a few years ago my DW and I were looking at homes in so cal. All of the homes we could afford she didn't like, and all the homes she liked we couldn't afford.
Now if we had bought one of those homes she didn't like (in all fairness i didn't much care for them either, but i have lived in worse) in 2001 and sold in 04-05 we would have doubled our money. bought for 160 - 190 sold for 350 - 400.
nowadays we are searching the country for a house in a good neighborhood. haven't found it yet but will keep looking.
"
My experience is that people don't like what they can afford
I ask them how much they want to spend and they tell me and so I show them those houses and they don't like them"
I know youre right . Im not arguing it .
Before this gets any better that may be what its gonna turn to unless its somthing else or we fall like Rome . Somthing is gonna have to break. That may or may not belong in this thread. Or does it ? I told Boss this was gonna happen and he didnt believe a word of it . Now its worse than I thought . Im not running around saying the sky is falling because its not . Im just saying some of these problems could be solved. Like lowering the sq ft around here and getting it affordable . Buyers dominate it though and as long as the gov will loan the full amount they will buy it .
I look at credit applications of tenants that could be used as credit reports. I get to see the numbers just like you do of pre qualification of buyer reports.
Ya gotta admit theres some pretty stupid stuff on there. Stupid is a bad word but I used it . Covers a broad base of things though. You see an income first off and the yearly income total. You get the bring home correct and you yourself try to pay all their bills with it . Its not enough so you look back at what they owe and for what . I wont mention the things that stand out to me but it doesnt take long looking at it to figgure they were clueless or didnt care. Ok so mebbe they needed a financial advisor . What ever .
I look at the utilities of my tennants and future ones . I ask where they lived. How long and the name of their landlord. Have they ever bought a house ? Are they interrested in purchase? I also have a long talk with them and get to know them as best I can in a short time period. Where do they work , how long , pay, and they are very forthcomming about expenses.
All that stuff tells a story of the past but best of all it predicts their future to me . MOst of the time I can tell whether they can make it or not based on the decisions they have been making . The ones that arent going to make it normaly could if they would change the way they live . Normally as you suggest they will not .
Ive got young couples and singles renting three bedroom houses . They have the money so we give it a roll. I get the houses back easily so its not that big a gamble to me but I lease some knowing they wont make the distance of the lease. I keep the last months rent and the deposit to roll on. They get an education. Used to I waited on good renters but anymore they need a bounty on them to steal from another landlord. I get good renters by chance anymore . Its not predictable .
Now if they would listen to me Id tell them to rent an interior apartment in town. Top floor in the winter and bottom in the summer . Let the other renters cool or heat their apartment . One of them buy a scooter to ride to work and keep one car or somthing like that to survive but that doesnt happen. They get tossed around from landlord to lanlord till they make the black list. Or they make good tennants . One or the other.
Selling houses is about the same deal.
Tim
While IM on a roll . <G>
I just evicted another set of tennants and cleaned up their mess.
Why do the evicted ones leave the same signs?
To go bags [pizza hut etc.]
Beer cans and packaging . I probably burned 40 cases of beer cartons.
Bills in the mail box that are over due and last notices. This one had the electric shut off for three months non payment. The other one had the water meter pulled. I evicted both after 5 days . Carmart car payments past due .
Heres the part I dont get ;
Each eviction supplies a nice garage sale for me . Im gonna have a big one off two evictions . I get all my lawn mowers that way. Do a carb job and IM in business . The yards are not mowed . Lots of trash to haul to the dump. My wife picked up enough money to pay the trash bill off the floor. The last one left about 400 bucks worth of stuff to sell. Swing sets by the dozens . I guess the kids dont need them anymore. Toys galore left to me instead of the kids. Repos are the very same signs . Those 110 percent buyers and renters that had first, last months rents and deposits.
I call that stupid.
Tim
Tim you should write a bookWhat are some of the unusual things people have left behind?I'll give you an example of something I found.My brother bought a bank repo and called me and said "the house is full of stuff - come take a look and see if there is anything you want"So I went over there and looked through all the trash and stench and lo and behold I found a carpet shampooerThis WAS NOT A CHEAP ONE you buy at wally world.THIS WAS A RUG DOCTOR CARPET SHAMPOOER YOU RENT FOR $20 PER DAY FROM THE GROCERY STOREI took it home and got some good use out of it
i found a guy living in the basement of a house we had just closed on. good area too. my wife screamed like she was shot when he came out from under the stairs.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
was this one of those guys who cooks on a barbeque grill in the house?I saw that a few months ago
When Ive had some sleep.
i think you answered your own question...
people are still buying and renting... money is still cheap if you have good credit... but man i have had to do filps thru hoops even when it's income producing national tenants, long term leases, and 40-50% ltv...
but there are deals out there... in this market just all all markets before this... you make your money buy'n....
rentals are stong here because there is a bit of a shortage due to so many rental have'n been converted to condos in the last few years... furnished rentals are and have been very strong... but we have a large medical market that drives this both with doctors and those who are here to see the doctors...
Its a great time to be building... deals on materials, deals on trades... I think your cost per SF could be 25-30% less today than it was 2 years ago... around here under 200k is still ok strong.... new & under 150k is good... new and smaller @ around 125k but with a few nice touches and it's already sold... (about $100sf)...
scared money never wins
p
you are probly right, but carrying costs would kill me to build plus with prices coming down lots of places for sale at prices you couldn't build it for. just nothing so good it knocks me off the fence just yet.
"scared money never wins"
That was worth making the thread to me . Thanks .
Ive got stuff to do but Ill be right back.
Tim
Mooney, perfect time for this thread. I'm currently pulling my hair out in clumps trying to find money to purchase more property.
Its crazy, all these deals and i'm broke.
Any alternative financing ideas?
Blue likes to preach owner finance . Thats one way.
It doesnt set you loose or free but its a start .
It takes around 750 credit score or somewheres close to bank.
Takes what a lot of self employed dont have is showing income on a tax return.
Work and credit history plus in this business professional history which to this board isnt a problem. They dont like loaning money to folks who cant do the work of a flip. Thats one way banks have learned to say no to the TV flip show watchers. They got smarter. I happen to like that .
Then of course this new age even the ones that could borrow money last year like me on LTV and get 100 percent financing has changed to collateral and they upped it to 30 percent . Thats not really a bad thing though. If you cant get 60 percent deals you dont need to have your chips in on that hand. Somthing I always say;
I dont have to play this hand and I dont have to buy this house .
To me thats the mark of a seasoned card player or a buyer. Sometimes you have to lay down Aces , Kings , or Queens. Their not worth a large chip stack lost. Just let it go .
If I want one thing and a banker tells me somthing I didnt want to hear I go visit another one. If you visit three bankers and youre getting the same story then maybe its time to alter plans . More often than not they changed more than I did . I had one banker tell me they didnt loan on mobiles . I went to another one and they told me the same thing but said they would do it for me . So dont just believe one lender . Have the balls to visit two more and act like you belong across their table . Act like you been there before . Be polite and likeable but show confidence . Some people describe it as you are there to help them not the other way around . They are exellent readers of people and do it for a living.
Some times a new bank will make deals an old one wont because it wants business.
Records show new banks have the greatest number of forclosures. Take advantage of a negative. Same thing with new loan officers . They make the most mistakes but they normally dont have enough loaning power. If their loans has to go to the president then you might as well be dealing with the top dog. He has the most writing power. Deals with presidents can be done on the phone after you gain a history. Youve got no chance to move up with a new loan officier until he or she does. I go to the top and try to set up a future . Any loan officer can do a car or a boat but not a house unless theyve been there a while .
Tim
tim ,if i knew how to search the archives i would pull a post you made 1.5-2 yrs ago.you was on the side of the fence that said" this all is going to fall apart before long" .i chimed in on your side,but i have never seen a glass half full,it's half empty.you can called it pessimist,i call it reality. a few more drinks and the glass is empty and you will need a refill.
here goes the pessimistic in me. i'm pretty worried about what i see going on everyday. gas is up,groceries up,everything is going up,and heres what bothers me. my renters wages are not going up,they all lived paycheck to paycheck before this started.if this continues pretty soon they don't have the money to pay everything and i think as landlord i may be the last guy on the totem pole,i better get good at evictions before long.
over the last 5 years i have been saying for the rentals to turn good again and return a decent return,some bad times were going to have to come.i didn't really picture what we have now,i could take a swing at bush,but i really don't think he has control over all this,maybe a different direction 6 years ago but now the course is plotted and we all have to ride it out.
your position is a little different than mine,i buy to rent,i just can't seem to resale and make it work. so when i buy i look at pretty long term what this is going to do for me,where as your looking to resale and make your profit in a shorter time and be gone.you are right on the money with the banks aren't ready to lose alot on there 110% loans.if this keeps heading down the tubes i think that will change.when they get overloaded with repo's,they will take a 40% loss.but when it does it's going to affect the whole market,so flipping will be the same challenge,buy cheaper ,sell cheaper.
you have to find someone that is motivated by "i want to sell and get the hel out" it's hard to do,like i've said i like estates,but something i have mentioned that i found took me from a non seller to motivated as possible was that shooting deal. i had never seen that as a opportunity ,and it sounds morbid,but when you watch the news and someone has been murdered or suicide or something like that ,i bet there is a 70% chance that someone like i was is sitting there going"what do i do with this" sounds like your being a predator,but i would of welcome someone to come in and relived me of that deal.
you have talked about building new duplexes,i have friend doing that right now,his number look pretty fair.if it was me i wouldn't do duplexes i would do single family and heres why. when you sell a duplex/multi family you only have one kind of buyer,investor looking for return. whatever the rents bring in,just figure a cap rate and thats what they will pay. they are not looking for pride of ownership blah blah.just how much money do i make.it's a wholesale market,thats what all investors are looking for. with single family that market opens to ,young homeowners,investors ,retired couples etc. now your in the retail market with all the other houses. yeah it cost more per sq ft to build,but how much more? i will say duplexes went pretty crazy around here for a couple years due to cailf. money coming in,thats all gone now.........
not even 2 cents worth ...... larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Duplexes vs houses to re sell;
Ive heard what you said the whole time . But ;
Ive always done houses . Im always in a hurry to sell because they are aligators . Houses sell empty or with a nice designer living in them that keeps house. A house sitting empty as you know carries all the bills of a rental empty. Thats some risk that your profit gets eaten in times like these . Like you said , they are hard to sell .
Ive not done this but heres my idea.
First off I know multiple apartments are almost impossible to sell.
Even a triplex can be expensive .
Theres different types of duplexes . Ive been one that shys away from apartments because of heavy competition. Im in a market by myself with houses. Sure there are lots of rental houses but its not by someone in business with them.
Theres choices like I said from 600 sg ft to 1200. Garage, no garages. Ive looked at everything I can look at people have built . We drove through a trailer park today when we went to the doctor . Always looking while driving .
I like duplexes for several reasons . A small duplex here would be 1200 ft total. Apartments are very high as far as value . My houses offer more for the buck and thats bad for me. A 600 sq ft would rent for 400 right now with a parking area if it was nice . Thats 800 for the unit . Im renting 1100 sq ft houses for 600 right now . They would cost about the same , mebbe a little more Im not sure as I havent bought but Ive got some free lots ready to build on Ive got from other deals . I figgure 40 per sq ft cost and me not getting paid for manageing subs. Me doing some of the work . Probably taping , painting , and finish carpentry which isnt a lot in an apartment . Ill set the cabinets. and fixtures and Im done . Ill do all the digging footings and trenches plus furnish the backhoe in general. Landscape , clean up the brick mess , trash, driveway digging , and such. 24 grand per unit cost . 48,000 for the building with a return of 800. It works good and should be worth around 90 grand. Ill net somewhere around 85,000 after an agent fee. They can take as long as they like to sell it . Itll look like new for 5 years.
I like the big duplexes that are three bedroom but they dont bring enough more just like a house .
Tim
Hey, Tim,I like duplexes, too, but not for re-sale - to rent. My cash flow was always a challenge, and with a duplex, if one side was empty, at least I had someone paying me rent on the other side. Never had a duplex completely empty, and I've had rentals since 1980.Estate Houses, I did a flip house last summer. A buddy had to put his Dad in the nursing home, under Medicare. House was worth about $85000, tax assessors value was $68000. He told me Medicaid would only allow his Dad to keep $25000 from the sale of his home. Didn't matter if it was a $200000 house or a $35000 house, he could only keep $25000. My friend said he could have painted, refinished floors, etc. and maybe sold the house for $92000, and his Dad would get $25000, the gov't would get the rest. Or he could sell it to me for the tax value, and his Dad would get $25000 and the gov't the rest.So we did the deal for $68000, and I freshened it up and sold it for $92500. Don't know how you would find these, or if people would really see it as clearly as my friend. Maybe you need an informant at the nursing home.Greg
What was the point in paying more than $25,000? Did you offer less than 68k and get turned down? Bob's next test date: 12/10/07
yeah my thoughts exactly, i am surprised to have not heard about unethical deals involving estate sales for less than tax value where there are limits to the amount of equity the owner can keep.
you would think unscrupulous realtors would be all over that, here you sell it to me for $25,000 wink wink, then i will turn around and make $75,000.
ripe for kickbacks if it is allowed, which is probably why it isn't allowed?
hopefully we can learn something here!
I'm not talking anything about unethical or kickbacks. The seller seemed to be a private homeowner who was selling the property and turning over everything to the government, except 25k. Every house needs work and not every tax appraisal is accurate.So, if you factor in 20k fixup, and a fair markup, the wholesale offer would be only 21k if you were planning on spending 20k for the fixup, marking it up 67% (21k + 20k * 1.67 =$68,470).So, the house could be put on the market in fixed up shape at $68k, which would obviously be a quick sale.....which is good since every business wants to turn their goods over quickly. So, if the offer was higher than 21k, the fixup costs would have to decrease or the markup would have to decrease, which isn't advisable, or the selling price would have to increase which adds risk because of carrying costs. Bob's next test date: 12/10/07
They are advertizing reverse mortgage as well.
I didnt get it at first and I probably still dont have all the angles figgured.
Theres a company that pays a reduced amount for their mortgage but they can live there till they die . What normally happens is they go to a nursing home Id guess. We took in an elderly lady . Before we did we considered a nursing home . They would have taken her house after they took her money. If she doesnt have money or assets they will accept SS if she hasnt had the assets for three years. As long as they sell or spend the money in some way they are supposed to be good to go outside the time limit.
I know a man that bought a farm before a guy died . He was dieing but he had a wife living too. He bought the farm with the agreement they could live there for 10 years. She got the income and a place to ive for 10 years. He got one cheap farm.
Tim
Edited 6/12/2008 10:53 am by Mooney
Medicare has a five year look-back period on anything financial. That's so someone can't just dump their assets, so they'lll qualify for Medicare. My friend couldn't buy his own Dad's house, it had to be an unrelated third party. And they would challenge the sale if it wasn't on the up and up. Eliminate his benefit and make him "Private Pay" at the nursing home, to the tune of about $3,500 a month.
The assessed tax value set the benchmark for a reasonable sales price. It was a good value for me, and it all worked out well for all of us.
Greg
Well houses will do the same thing actually. The more houses you own the better it works . Its the same really. You got 15 houses out there rented and one goes down its not a big deal as long as its going back on line . Half of the duplex will make the payment which IM sure you are saying but so will 14 houses make the payments on one . It actually works with 5 pretty good . The more you have you get in to a pay peter to pay paul and trade. I need a roof on one and they all help pay for it or did because the check came out of the same pot. Next month it will help generate a bathroom remodel on another one that helped roof it the month before.
Ill say a house sells better of course but if its a rental it has to be empty. You cant expect a renter to show a house or have it ready all the time . They dont want a sign in the front yard or people touring the place the call home . I moved years ago when that happened to me .
If you wanted to buy a duplex you would want it to be rented and show a good history. Top rents too with no down time . So to me it wouldnt matter when it sold . It wouldnt be eating anything as the saying goes. I would have to be present when it was shown which is the only thing. No one opens the doors on my renters unless Im the one doing it . They only have to trust me . Thats in their lease.
Tim
Maybe you need an informant at the nursing home
My mother died last year, got a call from a "friend" of her doctor wanting to list her house.
Joe H
Been doing this for 6 years. Started with flips and the last 1.5 yrs rentals. Were licensed & insured and always deliver what we say we will. I have a 700+ cred score and I cant refi my daughters doll house right now.
I got stuck when the lenders dropped to 65% LTV. I have equity all over just no liquid.
"
I got stuck when the lenders dropped to 65% LTV. I have equity all over just no liquid."
Ill tell ya how my talk with the banker went on this subject.
I just told you they did the same to me more or less. I know she cant make it stick with me because Ive got collateral everywhere . She got all my business from another bank. She took everything in one day from them. But I left because she made me a better deal. She knows I would leave her too if I had reason. I told her it wouldnt work if we couldnt work it out as I dont carry that kind of cash. I had to ask and she didnt offer which shows she was still runnin a bluff for her bank. I said dont yall still do construction loans? If ya dont you will be going down. Of course we do . Well, can people not own the land and get a 100 percent loan on the house anymore? Yes of course . Isnt that figgured on LTV with no money down? Yes but weve got the land . Youve got the land here too and the house LTV. I cant do that . Well , why dont we do a construction loan to rebuild the house or remodel it and get an appraisel on finished condition to be just like a new house ? We can do that . Fine then, lets do that . [duh]
I tell her I got one more problem. If I see a house and feel I need to cash offer to make my offer better than all other offers with a closing in 2 weeks or if I attend an auction like I do that says cash the day of sale , how do we do that ? You can put up a house you already own like you did last time you made a cash offer. Too much trouble and paper work. What else is there? She shook her head . What about a line of credit with you holding a certain amount of assets or part of such as you already having a house I have and I only owe 12 grand on it but its worth 70? Actually my CPA told me to do that and not sell anything. We would have to have current appraisels for that to work or you could put up properties with the old app for their amount less the percntage of LTV. You dont need appraisels really becasue youve got plenty with me already so we can just do it . Tell me what you want to put up as collateral and Ill set it up.
Im on a little roll here so I just ask; What if I feel I need a large line of credit ? How large ? I dont know Im just asking . Since Ive got every thing youve got Id say thats pretty big . True . You have everything I have mortgaged . yes. I could get apps on the stuff I own and make it bigger then you would hold everything say. Why would you need to do that ? I dont know but there might be a need somtime if I bought someone out of business? Youve got a business on your mind dont you? Yes , Rotor Rooter or a trailer park. Mebbe both as they both fit . Yes we can do it but Id rather not advance all of it at once . Why? Because you are not in good health. I can handle the houses but I dont really want a trailer park ot a business. Im not saying I wont . Id rather you stay with what you do. You have an exellent history and I can sell that to my superiors. HUM , ok. You certainly stabbed the point didnt you? I have to when we are talking that kind of money. Fair enough .
After I left and had time to think the thought came to me that she didnt want it all . Reasons are I was going outside my history of that bank and I wasnt in good health which she said but the kicker to me is she could get the other stuff if I defaulted or died . The bank would do that if there was a loss bigger than they could sell out of collateral. She would be paid no matter so I dont think she wanted it all. A lot of times people dont realize that when they let something be defaulted on it may not be over . If the house burned to the ground with out insurance paid Id still owe the bill at the bank or if the house didnt sell for enough money to satisfy her. She would come get some more in court.
Tim
That all sounds good except that i'm all over. Banks traditionally wont touch me so I have my houses mortgaged through brokers.
Yep thats a problem.
You actually need a bank as soon as you can get one . Id be lost with out one in this business. Id be seeing if the bank would take everything over so Id have it all in house .
I bought 2 houses and five lots from a house mover. He bought the lots and houses cash from walmart . He began fixing up the houses and ran out of money. The bank wouldnt touch him. He cried saying he was gonna lose it all. He showed up at my front door one Sunday morning and said give me an offer or I loose it Monday. Now evidently he had a contract to pay with walmart . I could never understand how he could loose it if he had paid cash like he said he did in the beginning . It didnt matter . I called my banker at home on Sunday and he said do it . I finished both houses and sold all the lots . The banker was there to help everywhere I needed it . Had the mover used the bank in the beginning he could have done the same thing. If a bank gets in they normally stay in till the end if its on the up and up. Theyve got too much invested in me and said it . They would do some risk to keep me swimming.
Tim
"pulling hair out trying to find money to buy property, all these deals and i'm broke"
ok whatdya got? what kind of return are we talking about? what will be the carrying costs?
if you are serious about needing money to make money then i would like to hear about it, you obviously know something i don't,
i have also been looking but can't find anything to jump off the fence for just yet. i know its a good time to buy, but next year may be even better. eventually it will go back up again, but if your plan is to buy and hold without positive cash flow i am still on the fence unless it is absolutely killer deal.
every time i find killer deal it was just contracted.
Just put an offer in today. House in Ferndale asking 34,900. Sev is 44k. The house literally needs $500 worth of work to make it ready for rent/sale.
Should appraise for no less than 65k. It will rent for $800. Figure the PITI at about ($400?).
If I can get it, i'll come up with 20% and probably rent it.
If you can find enough of those deals in a years time its a good living . I used to be able to get all I could do and it has made a living .
Tim
Evidently, I cant even find this one. I dont know if i'm gonna cry or punch the wall.
This deal requires a preapproval from a major bank, doesnt matter who ultimately funds you but they want to know you're approved. 700 cred score no lates and I cant even get a freakin letter.
So now I have a house that I was the first one into that I can flow 400/ mo with and I cant lay hands on 35 freakin thousand dollars.
It wouldnt surprise me if its gone by morning and the way it looks like right this minute, I MISSED IT!!
Tim is right. You are shopping mortgage companies but you might need to move all your properties into a bank who would fund everything from their portfolio division. The difference is that they don't sell the notes on the after market. They have much greater leeway. By moving all the properties into their portfolio, it gives them greater leverage to easily attach everything to satisfy one delinquent property. Start walking into the smallest banks in the area. Bob's next test date: 12/10/07
I cant get a "rate and term" refi right now. I dont see some bank buying all my mortgages but i'll give it a try.
Are you attending any of the Oakland Real Estate Investor club meetings over there in Ferndale or Clawson? It's hard to believe that none in there are financing deals. Bob's next test date: 12/10/07
Ya caught me. I got busy and honestly forgot about them. Guess i'm payin for it now.
I'm writing myself a note right now.
Edited 6/12/2008 9:39 pm ET by MSA1
Okay...now that you've woken up...did you find that retiree yet for the lake property? It's actually a very nice small lake. Perfect for grandparents and grand kids. I lived on it for 6 years and would have loved to stay there. I shoulda specced something while I lived there. The lake is the type of lake that makes you feel like you're up north, but your only 45 minutes from the Palace. Its the perfect summer lake...not too hard to do the drive...close enough to let the kids and wife stay there while the old man drives back to work every day. It might make a good summer rental property with a 9 month regular tenant lease too. The other interesting thing about the property is that it is set on three lots. If you look at the drawing though, the house would be situated on only half the total lots. That means, that legally, if/when the sewers go around the lake, the septic area would not be needed and the property would yield another buildable lot..if the homeowner decided. The house footprint could be flip flopped onto either side of the lot. Bob's next test date: 12/10/07
Thats what I was gonna call you about. Like I said in the other post, the Ferndale deal really pi$$ed me off today and I was in no frame of mind to discuss real estate of any kind.
Tomorrow may not be any better but at least it'll be different.:>)
Jim you said in another post in another thread yesterday that you are not looking to buy right now, that you expect real estate to go down.
i have been thinking about that statement, and in responding to another post it occurs to me that the global pool of money NEEDS to have something to invest in.
whatever the majority of the global pool of money is invested in will go up in value as money moves in.
when the dot com bubble burst it was real estate, we all saw how the wall st genius's turned mortgages into a comodity and what that did to the real estate market.
whats next? they have got to invest in something, they have to do something with whatever money is left. which way will it go?
everything is so volatile right now, oil and energy is nuts, the old fashioned commoditiies- corn wheat soybeans, all up.
could it be that the food and grain crops are the next thing to go through the roof? what about the farmland where the crops are grown? finally how are they going to cut up and buy and sell water like they did home mortgages? will a water certificate be the next big thing?
Those are all good questions. The answer will be subject to the political whims of the future. Where will the government try to prop up the economy? Will they pour billions into low income appts? Will they prop up the single family market? The bigger bust is coming a few years down the road. We are seeing the tip of the iceburg here. All those people with a million dollars in their 401k's will find out that they are worthless. Think about that for a minute. When everyone decides to dump their portfolios, who is buying? Bob's next test date: 12/10/07
you are thinking half empty, i am thinking half full.
you say "when everyone is decides to dump their portfolio's who is buying"
and i say "when everyone decides to dump their portfolio's what will they buy"
the whole point of me asking the question is based on the premise of follow the money. whatever the money goes into will go up in value. you are identifying something you think will go down in value (i agree) and you think money will leave, people will divest themselves of portfolios that are declining (again i agree)
but what will they put their money in? if we get in ahead and out ahead we win!
farmland and energy construction?
I think Jim had a great point even if its half empty. There will be no money to buy out 401ks. Thats the real point.
Tim
*sigh*
i get it. i get that as soon as people realize their 401 Ks are going to be worthless they will start cashing out, they will plummet in value, and then no one will buy them.
for those that did get some money out what will they put their money into? it can't all be gone can it?
if what you and jim are saying is true its time to buy the amish farm and start the greenhouse project. by the way i do know of an amish farm with a nice house on it for $150,000 almost 50 acres, only there is no electricty in the house.
We all think owning land is the answer but the government really owns it by virtue of their ability to tax you off it. Even with that dreadful thought, owning land is probably your biggest hedge, especially if it's tillable. Bob's next test date: 12/10/07
thanks, now theres the old blue we all know and love.
seriously i know its bad right now, but we have to keep trying to make that lemonade.
in parts of missouri there is tillable land for $2000 per acre. you can't usually get just 2 acres at that price though, above 20 or so acres and it is often at that price. i know right where it floods, dont wanna buy that parcel.
My brother is buying fixer uppers and bank repos right now in DenverHere's how he's doing the financing.He Buys the home and pay cash (Home Equity Line of Credit).Some houses he flips and others he keeps as rentals.He does repairs to the home and THEN goes to the bank to finance the property.He finances the home with a five year loan.Right now the interest rate he is getting is 6.5% which is pretty good for investment propertiesHis monthly payment is based upon 30 year amitorizationWhen he gets the financing it is based upon the appraisal and the appraised value is higher than what he paid for it. Sometimes quite a bit higher. So he is financing more than what he paid for the home (but this allows him to pull money out and use it for repairs, buying the next one, etc)He knows he has five years to either sell the house or get different financing.It's working for him.
Thats pretty close to what Im going to have to do now .
TimHe is looking at it like this.He can buy it and flip it for $25 K profitOr he can buy it and finance it and borrow the appraised value and put $25 K in his pocket that wayI guess we'll see how it works over the next year or two.
I'm glad it's working for him. Is seasoning an issue for him? If Denver follows MI's lead, those properties hes financed should be worth about half of what they are worth today. As long as he refinances with those numbers in mind, he'll at least break even on the equity building idea. I know lots of MI people who wish they hadn't put their name on financing five years ago. Bob's next test date: 12/10/07
He says seasoning is not an issueHe has excellent credit and he says part of what is helping him is he has documentation that he has owned rental property for 25 yearsHe says he can always find houses but one of his obstacles is paying someone to do the remodelingHe can't do that kind of work and he won't pay a legit contractor because it cuts into his profitI think he's finding houses that don't need all that much work, times are tough and so he's low balling and is successful in buying the house and then it appraises pretty high and he pulls the money outHe says the rent rec'd will make his payment so he's happy as a pig in slop
I'm kinda lining up with segundo on this.
That money does not just evaporate, as much as a lot of people like to say it does, it really doesn't.
It's going somewhere. Where will it go?
When the BB's retire and start to sell off their retirement portfolios there will be a lot of money in the market. That should depress the stock prices, lower interest rates and that money is not going to just sit there. So it's going to be invested and that will raise the price of whatever it's being invsted in. Will that be stocks? What kind? RE?
I don't know.
"Coming to recognize you are wrong is like coming to recognize you are sick. You feel bad long before you admit you have any of the symptoms and certianly long efore you are willing to take your medicine." -Charlton Heston.
why thank you, i can't tell you how glad it makes me to think that i might possibly be on the right track.
i can assure you i would also entertain opposing viewpoints, i am thinking thats the way its got to be but then again i also thought real estate was a safe investment.
That's why I said " I don't know" at the bottom of my post. <G>
Both of them pretty much know what they are talking about and have been through more than me so I won't dispute anything they say but it seems like to me that the Fed will have to be factored in here and will control the money supply to keep too much of it from wrecking the economy.
That's the way it works from what I've been told.
"Coming to recognize you are wrong is like coming to recognize you are sick. You feel bad long before you admit you have any of the symptoms and certianly long efore you are willing to take your medicine." -Charlton Heston.
well me too, i don't know either but if i keep thinking on it i will figure a plan of some sorts.
i really like being able to bounce it back and forth in here, its got to be good for the figuring it out process.
When you get Mooney and Allen cutting up a deal it gets interesting quick.
They can pick the fly specks out of pepper.
"Coming to recognize you are wrong is like coming to recognize you are sick. You feel bad long before you admit you have any of the symptoms and certianly long efore you are willing to take your medicine." -Charlton Heston.
thats what i'm talkin about
It can disapear out of the counrty. Thats whats happening everytime you fill up your truck.
People are getting richer than us in other countries. China and Japan have been making a living off us for a long time and Mexico has now got a strangle hold.
Nothing seems to be made here anymore . You bet it can vanish.
Normally its supply and demand . That would count if it stays here . Baby boomers are now retiring . Remember theres not a work force to replace us boomers. Theres no one to pay SS in our place. SS doesnt have a future unless its less than enough.
Thats the reason we cant really have public health care. 30 yrs ago we could have but not now . The working force thats been carrying the load is quitting . Several like me finding that hard .
The boomers will buy stuff to retire with them and they will need a lot of health care . Most retirees want to take some time off and travel. Motor homes and campers should do really well and things like that. Houses built for the handicapped will do good . You just get to thinking what retirement people buy and thats probably where the money is going .
But with everyone retiring at once [which I dont think can really happen] the stock market should crash. Im not sharp enough to understand all that but I just dont think it can survive the boomers cashing out . 401ks are smoke . The money went to the people that got paid when they sold before it crashed. That money is gone at the crash. It doesnt evaporate.
Tim
The boomers will all be forced to start taking money out of their retirement accounts when they reach an age set by law. That means there will be more sellers entering the market than buyers, as dictated by current laws. I think the year 2016 is significant because that's when the bulk of the war babies will have to start cashing out. When more people are cashing out, who is buying? I know Ford people who lost 75% of their substantial 401k simply by being invested in their own company too heavily. The majority of owners of 401k's aren't sophisticated owners. They will be the big losers and there will be some big winners. Think 2%. The same 2% who are the wealthiest will once again win the game when they massive institutional funds crash. Then, they will be in position to win the game again when the market climbs. Bob's next test date: 12/10/07
Been readin' RichDad again?
He says the same thing.
Coincidentially, so do I. No one believes me.
Good point about it going to other countries.
But, they're going to invest it somewhere though. Maybe their own infrastructure?
They have to buy equipment and technology to do that. They already have a lot of it but not all.
That may be all we will eventually have left to sell?
Pretty bleak out look.
"Coming to recognize you are wrong is like coming to recognize you are sick. You feel bad long before you admit you have any of the symptoms and certianly long efore you are willing to take your medicine." -Charlton Heston.
The point is: when everyone is selling, there isn't any demand. When there's no demand, the prices drop...fast. How fast? a lot faster than we've seen in the past. Finding a use for the money won't be a big problem because there won't be much. Bob's next test date: 12/10/07
you are a little late in the commodities, oil is in a bubble right now and could burst. I thought it would sometime this summer, but I think I will revise that. I am now thinking sometime soon after the election. I was 5 mths early in calling the dot com mess, 2 years early in this current re mess. My tendencies is to call it early, better early than late with my money!
I went to a closing this morning with a Buyer.The closing officer stated the Buyer is strictly prohibited from EVER selling her home via a "rent to own" or "lease option"They had the Buyer sign a specific form acknowledging this clause.I just thought it was interesting.Maybe they've been doing this for a while but I have never picked up on this previously.
That clause would need some explanation. Is it something recorded against the deed? Is it a mortgage clause? Never to worry, there are different workarounds. Bob's next test date: 12/10/07
Edited 7/10/2008 2:03 pm by Jim_Allen
It's a mortgage clause and I'm going to see if I can make a copy of it and I'll get back to you
I'll be interested to see the clause. What is the remedy? Does it trigger the due on sale clause? Bob's next test date: 12/10/07
i think anything you do that is specifically stated in loan papers, gets a due on notice,doesn't it?i mean what else could the do make you go sit in a corner?
i just signed loan papers that said that one house i was buying was all i own for rentals. buried in the paper work was a list of my assetts,what they think i'm living in all those???????? let them call that note due and we'll be in court.if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I don't know what they could do. That's why I asked. Maybe it would trigger an increase in the loan terms. I don't think I'd be too worried about them calling in a performing loan nowadays. Bob's next test date: 12/10/07
this is probably to late on this deal but here was the approach that i used back when i was really working at accumalting property.
get one paid for or with a lot of equity. then go get a home equity loan/line of credit. mine was a visa card with 65k limit on it. when a deal pops up you can have cash in 10 minutes from any bank that will cash advance.once you own it ,fix it up and finance it for what you need to clear the line and your ready for the next one.
you never quite know how things are going to work out,in 89 i stopped at a small commercial building auction.i wanted this building but it had been on the market for 95k,so i didn't want to give anywhere close to that,kinda thought i'd be a buyer at 65,but my wife is due in 2 months ,she will be off work for 10 weeks so timing wasn't good.when auction is over i'm high bid at 30,seller says no way. auctioneer says to me when can you close?3 days and i'll give 40,sold. that deal actually changed my life for the better.i often have wondered what if i hadn't had the quick funds avail..................
just like the boy scouts be prepared and ready to go. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I cant get the smile off my face .
Wonderful testamant .
If youre gonna go to a shoot out ya gotta be packin.
Ive written about many deals Ive done . The best of the best were done in 5 minutes off guard. No I didnt get them closed in 5 minutes but the deal was done . I love auctions . You show up and get a cup of coffee and a hot dog and relax. You dont really have a clue whats gonna happen. Then boom , youre high bidder and the auctioneer is counting 1 2 3 sold.
Ive been to far too many that I couldnt geter done . They went way out front too fast with the auctioneer acting like a basketball referee. yep, yep, YEP![with hands pointing and arms waving] Its like when you get one your off guard.
I went way out in the country one day just to kill time and attended an estate sale . I was watching household stuff go with tools and stuff. I went for a trailer if it sold right but mostly just to enjoy the pretty day. Then the auctioneer said ;were gonna sell the house at 12 noon. I didnt know it . I walked through the house and around the outside looking at roof lines , walls , and I went under it in a pair of new Wranglers. I opened the breaker box and looked at the unit inside and out. It was 12 noon. Auctioneer asked for the opening bid and everyone just stood there. I dont ever go first and I dont run the race so I said nothing . I just try to finish it if its in range. I walked around to one of the kids and asked what they had to have . He told me and I said if it doesnt sell here would you sell the house after the sale . Ill sell it to you now . I bought it in 5 minutes. There was no bidders so I didnt see the point in bidding and paying commision.
Tim
i've never seen no bidders,someone usally thinks they can buy it for 3 k!
i made my living for awhile at auto auctions,it's a whole different deal there.but at a real estate auction i will almost always be the first to set it in,not at some crazy figure,but at maybe half of what i think it's worth. then when the bidding starts,with real estate after the first bid there is only 4-5 buyers left. i will hit the bids ,hard and fast. i want the other guy to think i'm crazy.if he wants to run me a little fine,but i will stop as fast as i started,.
seems to work for me as most people need to think a little before they bid thousands,so it adds to the confusion a little. the only exception is if the auctioneer takes a break to talk it over with the seller,then you might as well sit back and see what happens,cause the real auction doesn't start till the seller gives the green light.
it's a lot more fun than writing contracts and passing them back and forth,thats for sure. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Ive bought several a 1.00 over set in bid from the goverment . You rememeber when interrest was 10 percent ? Thats when it happened . Well actually I bought while it was 9 at the bank and going to 9.5 and did before it crashed to 5 percent . No one was buying anything so the houses got pretty cheap. No one was at gov sales serious to buy although their mouth was watering over the prices.
I couldnt sell them either and barely hung on renting them until the crash of rates. As cheap as they were I broke even renting them. Everyome thought I was crazy for doing it . First time I owed a million dollars and I wasnt making money. Pretty scary so it wasnt somthing people wanted to do at the time .
I could have lost my butt just as easy. Real hairline decision and was a gamble to say the least. I dont talk about it much because I know I was close to it going either way and yes it would have broke me . If interrest hadnt crashed when it did Id be sucking up the behind. There was no money for a roof , carpet, or anything. They were dead even money @ 100 percent rents. I was able to keep some deposits to pay for the lost month here and there of one .
When the rates dropped they increased 50 percent and stuff was moving fast. Thats what really gave me my first legible worth. It gave me somthing to build on and allowed me to be conservative . Not many people get worth with out some chances. That was when I took mine and I was all in. Ive built more since it happened but it was the foundation I didnt have to get started. At that time the bank owned a lot of repos and no one wanted to pay that interrest . They were sitting empty. The lenders were willing to take a loss but how could I buy and keep them? Thats when my rental business got going . After that the renters paid the notes down and its history. It was all done in the beginning on 15 yr notes. That was 17 years ago. If it hadnt been for no bidders at auctions at that time I wouldnt be in this business.
I do 30 yr notes now cause I wont be alive in 15 years. Funny.
The other part of it is that the lenders were willing because they were losing every day so it was easy to get the money. Especially if they already owned the property.
Tim
Edited 6/13/2008 11:14 am by Mooney
thats a great post tim, thank you.
a wonderful lesson too, you were all in and if interest rates hadn't gone down you would have lost a lot of money. as it was you were able to hold on until interest rates came down and them they increased in value.
now what i want to know is how to plan something for the next fluxuation in the economy.
we all know real estate is going down, inflation is up, interest is at or near all time lows. put it all together and tell me where we are going and what to do.
if you are right i swear my next child will be named tim, and if we don't have any more kids i am certain we will have another dog.
Well I wouldnt have went broke if it hadnt gone down for a good while . My wife had a good job and I was working some when I had time for money.
The houses were actually making money but it was in the payments . Remember 15 year am. Renters were paying principle every month but I couldnt get my hands on it . But then thats how it works . Its supposed to go up in value too but ya cant count on it .
Paper wise I should have been able to sell and make money because I bought way under market. But things werent selling for anyone . I didnt try to sell until it broke but then I sold several at a huge profit .
It was still very risky to owe that much money and not be making any money to run the business. Its true though if I had kept them and had to change out units , carpets and Roofs I would have been seriously hurting if I couldnt sell one.
I dont have a clue whats going to happen. I didnt then. I was sick and tired of working to pay taxes . MY wife is a business manager by trade. She put the deal together because it was what I knew how to do and I was tooled to do it . We made a good living and didnt need the money from the rentals . We did it for retirement . I just went whole hog doing it instead of buying 3. Im thankful I did it but we worked on them all the time plus worked another job so it was hard. Every weekend was spent on them for a long long time. Then the more I got the more time it took and I actually semi retired although I didnt use the word. We did it becasue we could do it not becasue we had a crystal ball for the future . The interrst thing was dumb a@@ luck not brains.
Then we started flipping along with the rentals because frankly we could and I was tooled . By then I had learned the ropes of buying . I knew a lot more about the business end of it .
I think I was ignorant actually. If I had known what I was doing I would have bought a few hundred and figured out a way to manage it . It was that easy to buy them. They didnt want them and was happy to finance at the rate.
I dont know what its like where you live and that makes a difference . You would have to first learn your market to get started. I dont think the future looks bright but for rentals it does since they dont want to loan money. Its harder for an investor to buy them. They have them almost shut off now its so hard to get started . They are still high priced too.
I believe building new rentals is where its at for me .
As Jim said most believe real estate is the best investment right now but you need to be able to geter done . I cant pay these prices.
Tim
Edited 6/13/2008 4:36 pm by Mooney
Larry I watched an investor flip a house 3 blocks from meThe house was a 1300 sq ft 1950's 3 bed, 2 bath, 2 car garage with poorly finished 1950's odd ball basementIt was a foreclosure and went on the market in Now for $99,000I looked at it and said "I can fix it up and sell it for $120 to $130I didn't do anything and it sold for $95,000 to an investorHe had his crew remodel the houseThey painted the inside, sanded and finished the oak floors in every room on the main level, and then remodeled the kitchen, bath, and master bath with new tile and new cabinets and new bathtubsThey made a nice bar in the large room in the basement(nice cabinetry and beautiful counter top)They put it on the market for $139 and I said "that's way too high"It sold pretty quickly for $135,000Again this is a 1200 to 1300 sq ft house with a living room and NO FAMILY ROOM ON THE MAIN FLOORHis gross profit was $40 But the realtors commissions were $8,100 so now he's down to $32,000He had expenses to buy the house:-closing costs-financing costs & holding costsI'm guessing his profit was $10,000Do you want to do it for that? Is it worth the risk?It's not worth it for $5,000 but I guess if you make $10,000 you're probably doing okayI really think he was lucky to sell it for $135But hey I've been wrong before
Im gonna answer that one too .
I wont buy if theres not a solid 10 grand in it and I have to be sure . 10 grand profit not my labor. Thats cut off for me. No chances selling and it has to be underpriced and lead the market . The cheapest house you can buy retail with the sq ft.
Tim
10k just isn't enough margin for a 100k dollar investment. i don't really mean that out of greed,but if i only have 10k margin,i may be wrong on the market price going in and miss it by that much and end up doing it for free. plus real estate is as liquid as a rock,if something happen in the news while i was holding this ,i could end up in trouble.
but that said ,i'm not a flipper,i have very seldom bought something so cheap that i felt i could really make good money on it. and if i did buy it cheap then that just makes it a good /better rental. i can sell it in 10 yrs after i have collected rent on it and wore it out a little. larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I agree pretty much.
A property must pay the note on a 100 percent loan , taxes , & insurance . Ill do the buying and fix up cost from my pocket because its a once time deal. It didnt take very long to add the 200 per month on top of that for me and stuff like new roofs , etc.
THats a tall order right now as I have said lately.
I use the 1 percent rule per month off worth too. 500 per month for a house thats worth 50,000 . Thats gone . There isnt such a thing anymore here. Houses that are worth 75 to 90 grand rent for 5 to 600 .
I figgured if the house couldnt do the 1 percent ratio then it moved into the flip stage to look at . Thats where most buys are right now . The new house I sold was 90 grand . I might have got 750 but Ive never done it . Never had a house that big and nice @1400 sg ft with a double garage , new storage building and wood fence on curb and gutter street in a new addition. I sold it for a 30,000 net . Selling was the better of the two although Ill owe taxes on it .
Said that to say, its harder to assure bottom line money in this day and age . I know I can rent it but can I sell it ? The rental types are the lowest gambles because I know what I can do if it doesnt sell. I used to make 10,000 on 35,000 buys . Then the same on 50,000 which is 20 percent . I wouldnt have bought that 90,000 dollar house for a 10 grand turn around either ! Especially since it didnt pass the rent numbers. I believe to flip only we should have 30 percent profit on a house that wont rent for the numbers to assure we dont get hurt.
Ive said before I look for 30 percent and if it isnt I walk.
The smallest deal I want to do on a house is 10 grand net. Not 10 grand on a 100 grand house . The last house I mentioned is certainly borderline. Nothing to brag about. I mostly take these things right off here from the contractors who figgure profit , risk, and financial burden separate of their wages. Somehow DanT and I came up with the same rent numbers separately. I dont know how that happened but it surprized me .
Houses that dont qualify for rentals hold a much greater risk.
Tim
Edited 6/16/2008 12:45 pm by Mooney
heres something i struggle with,you guys tell me how you view your investment property.
lets say i bought a house 10 years ago,gave 40k and it hit the rental market at 550. so i'm making profit on this house after taxes and ins probably 5400 per year.i think that hits right at 13% return. good times,wish they were back,but onward.
so today that house is worth about 80k [thats almost dream land around here for appreciation,but will go with that number] now it rents for 675,netting about 6700,giving me a return on my orig investment of about 17% so i feel good till i think about what it's worth. all of a sudden my return is 8% at todays market value.
i'm looking at these numbers and they all are overinflated some due to vacancy and maintenance..... sorry,but i'll continue.
i get myself down on these because i tend to use the current value to figure my rate of return. so i start grumbling i'm selling. so i got a 80k house ,spend 8k getting it sold, turn around and give uncle sam/state tax 30% of profit and i end up with maybe 60k to take to the bank and draw 3% on. i make a whole 1800 which will fill my gas tank about 18 times before it's gone.
this to me is the biggest negative to rentals, i own them and can't afford to get rid of them.i'm stuck until i die and my kids inherit them tax free and can then get rid of them.
i am a big ,big fan of 1031 tax exchanges and always put them into play when selling. if someone wants to accumulate rentals ,this is the best way to do it. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
NO, youre not supposed to sell rentals youve had 10 years. They make more money in the rental fleet than they do sold .
Sometimes its the thing to do but not from the money stand point. I may have to sell them because of my health . I always thought Id live with my rentals till I die . Doesnt look like thats going to be possible . Health issues can change everyting .
Selling rentals held for 12 months or so can be very smart . I just cant find enough to make a living at it so keeping them as rentals will make more money in the long run . Youre right .
Tim
Tim and Larry - I bought my house 5 years ago and it was a fixer upperIt needed painting and had old dirty carpet and the kitchen and bath were originalIt's now worth more than I paid for it, obviously, but for future reference I would rather just buy an average house at a good price, move in and stay for 5 years, don't put any money into it, and then sell it for a profit due to appreciation in value
"then sell it for a profit due to appreciation in value"That sounds like what everyone has been doing until the housing bubble got burst. Everyone can make money when things are appreciating. Hows that formula work when housing gets cut in half over a five year period? Bob's next test date: 12/10/07
We all should move every two years if its profitable and because ot the taxes.
However one house every five years is little added income. Were trying to make bigger hits than that .
The largest appreciation gain was two years ago I had here. I had 12 rental houses go through that and for me it was huge. I also had other properties including my house as well that it effected. However the way I bought my rentals at 100 percent loans but really based on LTV meant I was well invested on the buy. The properties simply gained value with out my help over two years and it wasnt an investment I really had any money in out of pocket . To me those are the sweetest gains .
Of course we could someday bite the bullet like Mich . So Im not exactly braggin. Tread lightly and whisper. Im thankful for the good fortune so far .
Just moving every five years and keeping up with your job futures is a safe way to not lose the game . Theres nothing wrong with that and I think sometimes we owe our family the steadiness. My problem with it is it will never win a super bowl. Thats retirement in full. But if you can figgure out how to win at stocks and real estate at a steady gain then kudos to ya . Risk has always been part of the game Ive played and I know its not wise to gamble now . But I must .
Ive always went for it on 4rth and 1. Its the best odds .
Tim
Edited 6/17/2008 12:21 pm by Mooney
"Of course we could someday bite the bullet like Mich "The difference between you and I is I believe that EVERYONE IN ALL 50 STATES will bit the bullet just like MI. I hope I'm wrong. Bob's next test date: 12/10/07
can you give any estimate or even wild guess as to the timeline that might happen in?
and if not that any idea or feeling of if we make it past 2012 without a collapse we should be ok?
i honestly think i am well postioned for a serious economic downturn with work in the energy sector. i am one of the people building nuke and coal powerplants, as well as refinery type construction and retrofit to meet polution standards. work that needs to be done. its not very glamorous work, but it is in demand right now.
again i can't help but think it won't be a total collapse, and that those with jobs to go to shoud be ok. I am also immediatly ready to jump ship to anything else.
I cannot give the estimate but look at the fundamental reasons for my pessism. We have an aging population quickly moving into the age where their productivity wanes and health care needs skyrocket. We have wages that aren't keeping up with inflation.We have housing prices that were created with a different set of lending rules. We have government leaders looking for ways to raise our taxes and take more of our spendable income.We face huge challenges to balance the governmental retirement system. We face the impending "due now" bill for the debt ran up in the last decade. We face huge retirement bills for govermental baby boomer workers retiring in record numbers along with soaring health insurance costs. We face massive worldwide competition for every industry operating in our country today. The rules of economic survival is changing. I'd like to tell you that your future is good but I believe that there will be a nationwide shaking out that will make the Great Depression look like the good times. I hope I'm wrong. Bob's next test date: 12/10/07
well if you are anywhere close to being right now is a good time to get into a small farm and hope you can stay self sufficient. at least you can grow some food and raise some chickens.
well if you are anywhere close to being right now is a good time to get into a small farm and hope you can stay self sufficient
You forgot stock up on ammo.
Come the apocalypse, gonna need lots of that.
Joe H
yeah you are probably right, need lots of ammo.
I don't see that the farms will hold the values either. Bob's next test date: 12/10/07
"I don't see that the farms will hold the values either."
I think hes talkin bout livin.
Tim
yep. talking about living is exactly right. if it gets to the point that there is no work anywhere at least if i have some land i can farm and hunt i can feed my family.
of course i am going to have to mortgage the farm, i can't pay cash. what else can you do if it gets worse than the great depression?
Everything you say is true enough.
Theres a little difference between the two states though. And some other states.
Ive said it before . We already do it cheap. No fat around here to trim. People making 8 to 10 bucks an hour in factories and making a living doing it . We get the work when other states dont because of it . We do what we do cheaper than anyone in the world. That be chickens . Our whole infrastructure is built around it . Its not a business someone could just get into and compete. Also thats why Walmart is here . We do it cheaper so the main office and the distribution is mostly all here except some satelites .
We went through some recessions and we were never touched . We are stonger as a state now than we have ever been. We are a very productive state .
If it gets to us the other states better be digging bunker holes.
We never thought about making 25 an hour much less 50.
Normally when things in the world are bad we prosper kinda. When money is tight for any reason we grow more chicken. When things are good we dont do so good because yall dont buy chicken. I could go into it why we are the best at it but id be boring . China cant even produce enough of their own chicken and they cant compete with us so its an export for us . We do it that cheap because of the system we have built to get it done.
Now if Mich had done with cars what weve done with chicken then they would still be turning out vehicles.
Thats the major reason I think its different .
Tim
"WE GROW CHICKEN"
roflmao!!!!
and for you that havn't ever smelled a chicken farm,ya just haven't smell the country life.it will take your breath away
money is starting to get tight tim,if i was you i'd go plant some chicken eggs and start watering.cause it looks to me like we'll all be eating chicken a whole lot more when gas hits 5.00
larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Chickens too expensive here already. Bob's next test date: 12/10/07
chicken farm don't smell near as bad as hog farm.
i'll take the chickens any day.
i don't know on a warm summer night those chicken farms are a bit ripe.after driving by one you won't stop a kfc for supper.
me i like growing cows,nothing like a homegrown rib eye steak fresh out of the garden. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
You like steak huh?
Well I know where youre at .
Cattle happens to be the by product of our chickens. No kiddin.
We take all the stuff that dont sell from a chicken and make protein out of it for dry feed . Just read the feed sacks at the coop.
The litter from the house is spread on the pastures and cows eat the grass. If it wasnt for chickens we would be a pretty poor cattle state because we cant afford fertilizer . As it stands we produce cattle well. Every chicken house feeds 50 cows very well with out skimping . The chicken houses are done on 7 year loans . The house doesnt make the owner/operator any money for that 7 years as its a wash with Tyson. BUT, the fertilizer is the profit during those 7 years. Most have at least 2 houses on their farm . Thats grazes and makes hay for 100 cows . Theres profit in that since its free feed. Our land wont graze much with out it .
Thats part of the reason we have infrastructure in that we have farms everywhere with chicken houses and cattle on them.
We had hogs but it didnt work for us or Tyson because we couldnt get free feed .
I went by the feed mill tonight on the way home. They had about 30 train cars parked on the tracks leading to the mill . Thats our major cost. We dont grow enough corn to feed the system.
Tim
Edited 6/18/2008 3:40 am by Mooney
cattle will eat that chicken litter, too.
might be a link to 'mad cow'
I don't know
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Cattle eat chicken litter by eating the grass .
Its true however that it gave the birds a disease. It wiped out our quail crop.
In some parts a few years ago it was pretty common to pile up the litter from chicken house cleanouts and let it go through a 'heat' that sorta pasturized it.It was then mixed with some other feedstuff bagged and sold or sold in bulk for cows to eat.I think it fell out of favor after the 'mad cow' scare.Sorry for the slight hijack."Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Pellets.
The thing I remember about straight litter was being used as hog feed . They will eat it too.
Heres its the best spread on grass . Its amazing the difference with as compared with out it . As long as its getting enough water . Otherwise the little will burn the grass up.
Its somthing like three days it gives off all the gases and it smells like a bad fart all three days .
Tim
Edited 6/23/2008 1:01 pm by Mooney
That's a good way to describe the bad smell.
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Yesterday was the worst sale of a home I have ever been involved in.We had our closing at 9 AM and the tension was so thick you could cut it with a knife.At the end of a closing the "closer" leaves the room to go make final copies and to bring a check to each realtor and one to the seller for his proceeds from the sale.She left the room and it was silent. I'm sitting there with my buyer and the other realtor is sitting across the table with her seller.we have fought over every detail for the past three weeks.I broke the ice by asking the seller for the names of the gas and electric utilities. there are several possibilties so I just asked her.We had some small talk and then silence.The other realtor said "I need the buyer's signature on the final walk through"I said "she's not going to sign it until next week when you've had the carpet cleaned and the dishwasher repaired, per the contract"The other realtor said "you're not getting the keys to the house until you sign the final walk through"Silence.I looked at the Buyer and said "It's okay, go ahead and sign it"She did and after the closing I drove down and the street and thought about the process and how things had gotten so bad and resulted in such bitterness.I had offered to fix a few things for the Buyer and she gave me a key and she went to work.I drove to the home and found that the seller had had the utilities turned off DURING THE CLOSINGI was so mad I couldn't see straight.I would never do this to anyone no matter how mad I get.I slept on it last night and maybe I need some self improvement and a better way of doing business.I hate to see business dealings end with such extreme stress, anger, and frustration.
Yes, it's called separate closings. I haven't sat across from one of my sellers or buyers in quite awhile. Bob's next test date: 12/10/07
Jim, normal people should be able to sit at a table and have a pleasant conversation about the newly sold home, the neighborhood, mail delivery, trash pick-up times, schools, bus routes, the combination to the garage door opener exterior key pad, etc etc etc.Sometimes the two parties sit and talk for a long period of time in the conference room and then when they leave they stand and talk for another half hour or so in the parking lot.there are times the two realtors even become friends during the process.The other realtor will go to the weekly sales meeting next week and stand up in front of the group and tell them what I jerk I am.I know that's hard to believe that anyone would say that about me. lolI don't know I just wanted to throw this out there. I'm in a big city and will probably never ever even see the seller.I will possibly run into the other realtor and I'm going to talk to her about how bad this was and try to get her side of the story.
Someone got pizzed off over somthing .
Your fault or not doesnt matter . Business is what it is . Or what it has to be.
The things your talking about is simalar to mine kinda. They asked me for a termite clearance . I dont need one . Im not paying for one . They asked for a warranty. From me ? Not at this price . Ill be glad to tack it on the sales price and provide it but I need it up front . You need anything else you want to pay me for ? I priced the house as is where it is in its current condition. You got a right to a walk through with the utilities on in 10 days after signing . If you need one after that than switch the utilities. Im about ready for this buyer to have somthing invested . They havent given me a dime but Ive paid out a thousand waiting on them. Dont come to me asking nothing else .
Tim
Mybe that's the way you have don closings, but when I'm the seller I always sign power of attorny to my lawyer. This eliminates the #### if you have been arguing about every little thing.
Well you threw it out there and this is a good place to do it . Same with me in answer.
Theres big money at stake . Ive got an hour to get it right . Ive been burned before by being stupid. If I can pick up 352.00 in a one hour closing its a pretty good day for me . After the checks are distributed Im the nicest guy to visit with in the room. Its over just like lawyers in a court case that were at each others throats.
What I defend is the original offer and acceptance . Those terms will do. We wont have any problems if that stands. But dont come asking for a dime more than I agreed to with out paying for it . Im not there to be friends with anyone . Im there to support my family. My family comes first . My job is to collect as many Benjamens as I can . Thats the game I play. If you are willing to give them to me Im friendly.
Remember most of the time the seller is the only one that has anything much invested . Its a critical time for him. What does an agent stand to lose ? A little time ? An ad in the paper ? The loan of a sign so someone else can sell it for them?
The buyer that gave 500 bucks earnest money doesnt have anything invested either. Ive walked out of closings knowing they would call me back. I didnt lose anything. Theres another deal around the corner and Ive still got my money minus 500 dollars. If the conditions of sale werent the same as I agreed to I dont have to pay for the closing when I walk. Get one thing wrong and Im not obligated. You put 600 instead of 500 as I agreed to and Im out of there . One mistake and I can walk.
The seller has to bare the time lost with no sale . NO pay day for that cowboy. Give him a hand thats the only pay he will get today.
When the buyer signs the papers hes made a major decision and his money is gone . Theres no turning back. Now the major factors become his to bear . Not until he signs those papers.
Closings are very big .
Tim
The last one I did wasnt rosy.
The govermemt gave the buyer 10 grand to buy my house. In closing they wanted me to sign a document that I gave it to them. I said I would not have gave them anything and to sign this is insulting . My sold price says 90 grand . They are being loaned 100 grand and some change . They are getting a check for 352.00 in this closing and dont have a dime in it . Now you want me to sign Im the one that did it . Im not . Its a lie Im gonna have to sign to get my 90 grand . Its not right . Im only getting 90 grand . Thats what Im selling it for to anyone . This is the goverments fault , not mine.
They tried to get me to come before the buyer at closing too. Fat chance . I told them I would come after the buyer and they leave the checks . If everyting was in order Id sign the papers and they could have possesion following that . They didnt fall for that either . Wonder why?
Tim
Around here they will let you go first or last.Either buyer or seller.Whoever gets there first goes on in and gets started.You asked about the concessions to the Buyer and around here when a home gets listed and placed in the MLS system, you as the Seller are asked this question:"Do you want to offer your home for sale to a Buyer who has FHA financing?The Seller answers yes or no and it is included in the MLS listing.If the Seller says "yes I will offer the home to a buyer with FHA financing, then you have agreed to play the games and pay some of the Buyer's closing coststhat's my understanding anyway
I didnt sign that .
The agent made the deal work and thats that .
I had a house priced where the buyer could afford a goverment loan . They called in an offer and we talked about it . She showed up at my dinning room table wanting things we didnt talk about . She told me to sell my house to this buyer they would have to have termite clearance . It wont work other wise . I told her to find another buyer flat out . Im down to the last penny I will take for this house . Take it or leave it . Im selling it wholsale , as it is where it is like it is . She would not write that in the contract becasue she couldnt do that and sell it FHA. I told her thats your problem , not mine . Someone else will sell that house . It doesnt have to be you or that buyer I deal with selling it . Your time is up in one month and you will lose it if you dont sell it quick. Youve had it 5 months and you have one month left to get it to the table or you are gonna lose it .I specified that in our contract . Get it done or get aside and let someone else do it . You are not getting 24 hrs more time .
She paid for the termite clearance and a warranty to make it work. Thats fine with me as long as I didnt pay it but she spent 8,9 hundred dollars I didnt spend. She goes back and re writes it . Comes back and it says 6 percent instead of 5 percent . She tried to pick it up there but she says it was an honest mistake . That one didnt work either . I tell her she should lose the listing over that alone. If I wanted to push it . We are not friendly at this point at all and its my agent . I explain to her if she wants to work for me the mistakes better be in my favor if I see any more . Im not running a popularity contest . I dont care if I keep her or not . Theres plenty out there wanting a listing like this and by the way , its her best listing . I tell her that becasue I looked online . I dont want to see anymore bs with her at all. Do your job and get it to the table like youre being paid to. She did it and then the paper they wanted me to sign that I gave them 10 grand . Do I sound like someone that would give away ten grand ?
Tim
Mr Fixitusa, you had the warning signs that the buyer and seller shouldn't be at the same table. Maybe "normal" people should but there was a history of issues wasn't there? Maybe in the future you should remember this closing and ask for separate closings. Tim, don't take this wrong. It doesn't sound like you did anything wrong. You are right on every account on the deal you just described but if I was an agent, I'd insist on having separate closings and not allow any buyer to sit in the same room with you. It's nothing personal but it sounds like you could be one of those guys that could easily scuttle a perfectly legit closing just by your hard nosed attitude. Closings don't have to be war. Every request can be amicably denied without anger or judgment or animosity. Your buyer found a government deal to get her better than 100% financing and you should be thankful for her efforts and aim your anger at the government if you don't think it's right. Bob's next test date: 12/10/07
Im not taking anything out of sorts. I am hard nosed business. I dont sell myself. Thats what agents are for and I hire them. Its simply not my job. To befuttle a closing is my job if it benifits me . Im there to win as long as it doesnt cost me more than its worth. I dont do it over nothing.
If they wanted to come before me , I dont have a problem but I might not sign.I then dont owe for that closing . Now if a problem comes up they arent there so I walk. I spend pretty close to an hour reviewing everthing before I sign. I always check everthing including legals . Youre supposed to get the coaching done before game time . A closing is game time for me . I add up the proceeds and want to see the checks . It all has to balance . I dont trust anyone. Its to much money for trust . Id loan ya money but Im not given ya any,.<G>
The final I can say on that is just like Larry and I were talking about . Too many times there are mistakes that arent in our favor . I believe Larry said he hasnt had one yet in his and Ive had 2 in all this business Ive done in 17 years of doing this very thing . Somebodies stacking the deck. I believe theres foul play but its an honest mistake right . No one goes to jail so they keep showing up. What else could it be ?
Tim
There are documents that are signed that allow mistakes to be corrected. I'm not saying you are wrong for being careful. All I'm saying is that if I'm the sales agent and have to spend my time in a closing, I would request separate closings. I wouldn't want you sitting across the table during the buyers phase of the closing. I'm not saying you would do anything wrong but it would just be much easier for me to work through whatever problem there is without "Mr I'm Going To Win on My Terms At All Costs or I'll Walk Out Now" sitting across the table. Quite often, it's a simple matter of changing some paperwork and figures and cutting another check to balance the equation. It's not battle time. Bob's next test date: 12/10/07
"Quite often, it's a simple matter of changing some paperwork and figures and cutting another check to balance the equation. It's not battle time."
Yea after someone tried to cheat me and I caught them red handed. Well that didnt work so we will just change these numbers where youre not getting screwed. Yea theres a paper that says mistakes can be changed while they are flying down the intrastate with my money. No thanks . They will deal with my wrath at the table or they will do business elsewhere. I tell them what Ill do and thats my final word . If it changes they arent worth their salt for me to worry about .
But the fact is I make money as well as save money at the table . You work your side of the street and Ill work mine . <G>
EDit ; By the way I liked this you wrote , its pretty good.
"Mr I'm Going To Win on My Terms At All Costs or I'll Walk Out Now" sitting across the table.
Tim
Edited 7/11/2008 2:23 pm by Mooney
Tim, the last property I sold was to a guy who tried at least ten tricks on me. I never got mad, I just stuck to the deal and got him to straighten the terms and working out. I had to reject some closing docs too and get them changed. I never felt threatened and never got angry but I ended up doing the deal just like we discussed months earlier in the game. I didn't attend the closing because I was in TX and the property was in Northern Mi. I closed the deal in escrow and had to wait for the checks to be mailed. They got here just fine. The closing company wouldn't have closed the deal if the buyer didn't sign the right papers and have the right checks. You and I both accomplished the exact same thing. Each of us was "challenged" by the buyers and each held out for the original terms agreed to in the signed purchase agreement. Only one of us did it calmly, yet the results were the same. I know I'm not going to change your mind but you should think about this. I'm 55 and I don't feel like I'm ever going to have a heart attack. I don't worry about a lot of things and things don't get me all fired up. My blood pressure stays calm, even in a challenging sale like this. On the last property I bought, it was so confusing that I was driving to the closing and betting that it wouldn't close. Even after it closed, I was betting that the mortgage company would cancel the deal and not send the check. It came and I got the keys the next day. The moral: Don't worry, be happy. Bob's next test date: 12/10/07
Jim you ever watch a basketball game and pay special attention to the coaches?
They dont win any of those arguements with the referees . Why do you think they do it ? To win future ones that arent called by being too much trouble. You sure dont want to screw a coach like that or he will for sure call you on it . Then here comes his fans .
Tim
I love watching coaches almost as much as I love watching the games. I have many coaching books and have read a lot about many great coaches in all sports. I coached for at least ten years and probably have some more coaching in my future. I understand why the coaches do some of the things they do. But, look at how different some of them accomplish their goals. Bobby Knight, one of the greatest coaches ever, tossed chairs. Other coaches remain stoic. I've tried both ways. I learned in my second year of high school coaching that remaining stoic was significantly more successful for many different reasons. Bob's next test date: 12/10/07
LOl. Turning into a good discussion.
Fact is either one isnt going to change . Thats ok. Becasue its our personality.
I watch lots of poker for one of my past times along with sports. I also play poker .
In Texas Holdem it involves taking advantage of the weakest players most all the time . You read the player hand after hand and mark changes in attitude , moving , talking , etc. Anything they do differently you notice it . Barry Greenstein made the statement that he didnt win the money he has playing strong players . He makes it taking advantage of weaker players or ones with less experience.
I might try to run a bluff on you in a deal acting strong when I was weak but probably not . Thats not how I read you . I figgure Id have to meet you with several different deals till you took one . Id be picking ones that held my advantage . Past that theres a good shot we wouldnt deal. Id probably be better off waiting on a weaker , less experienced buyer. I have to have the advantage and you wouldnt give it to me so Id just wait probably. Course it all depends if you really wanted it and how bad I wanted to sell it too . Still if I thought I held a better chance with another buyer Id pass . Thats almost a bluff because you might call one of my deals a week later .
I love doing those things becasue I love the game . I would not miss an encounter at a closing for anything. I said before I come out better showing up with them. I normally do walk out if they are not there . It is my right to meet them there . When I bought the last house the realator tried not telling me they would not be there . In fact he didnt . DW and I took off work and went to some trouble comming home and getting ready and going to it . That agent didnt want me in the same room with those sellers. I asked the closing agent where the sellers were and she told me they werent comming . She said that agent told her not to tell me . I looked at DW and said lets go. We met Monday and closed . I had cash money and I wasnt gonna leave it with out a deed. He was responsible for his house over the weekend , not me . If anything had changed with the house I still had my money under my arm. I did another walk through an hour before closing and it was still the same .
When I sold the house the agent didnt want me there either . Youre not the only one that feels that way but they wanted the house and the guy that sold it to me wanted the cash. I stayed in control. Nothing really happened but I was ready for it .
Tim
I guess I am with Blue on this one. I have had a couple of closing issues over the years but few that couldn't be resolved right then and there. Most of the closing agents in our small town know me and know I check the numbers so I guess they might think about it in advance but I don't dynamite the event with attitude.
Don't other states give out a pre-closing estimate of cost break down? I always get one to review a day or two before the closing and with the exception of tax amounts (if the day of closing changes) it is usually right on the money. So all the questions are worked out by closing.
I do think it is Mr. Fixits place to seperate the closing and frankly think he should read the situationa not put the buyer in that position. I too have not had a face to face in years. The one I just had in Michigan the guy was in the building and we talked afterwards but I see no reason to sit across from one another to "chat" with perfect strangers. I am an agressive negotiator so often they are not in the best humor anyway. DanT
Closing statement huh?
I once sold a tract of land . I wanted to sell half of it so I asked if they could sell half of my original legal description so I would not have to have it separated by a professional. They said sure we can do that . I kept reading the legal which is only contained on the DEED. I said I need some help reading this because I dont understand it . It looks like to me they will own my whole tract of land for half price. Im not selling all of my land but yall are.. My wife signed it ,they all signed it . I wouldnt sign it . My wife was running a company with 50 employees. I should have just sent her down there to take care of it . We would have lost half our land because the deed would have been signed and delivered to the buyer becasue it was a cash sale . He had the right to walk out of that office with a deed. I expect the same when I lay a cash box down on the table . It doesnt happen any other way as thats cash business. Closing statement would not have done me a lot of good .
Tim
Tim, what would have happened if you didn't fully understand the legal description as you sat there in the closing and signed away your half of the property that you wanted to keep? Do you think you would have lost that half of the property forever? I don't. Me? I think scrutinizing the small print in a closing is exactly the wrong place and time. I'd much rather have those documents at home in my office where I have the time and luxury to clearly sort out any issues. Also, there is a remedy for clerical mistakes such as you are describing in the localities that I have bought and sold in. Both parties have always signed documents agreeing to co-operate to fix the clerical errors if they become known in the future. I'm no lawyer, but I don't think your buyer would be able to legally claim the entire parcel if the purchase agreement clearly explained that he was buying only half. Yes, it's important to catch the problems before they happen but we all know that errors happen and they can be fixed later. Bob's next test date: 12/10/07
"Tim, what would have happened if you didn't fully understand the legal description as you sat there in the closing and signed away your half of the property that you wanted to keep? Do you think you would have lost that half of the property forever? I don't. "
When I read that I thought the exact same thing. When we were buying that property in Gladwin I decided to use a bank (step daughter is the branch manager which I find clouds your judgement) instead of my usual mortage broker guy.
The loan officer seemed screwy to me but I was trying to be the good step dad. We signed the loan submittal papers on Thursday and I didn't read much. On Sunday I sat down in the office and read through them. They were totally incorrect. Wrong incomes for both my wife and I, wrong amount of the mortage, loans from my corporation attributed to me personally etc. Hell I wouldn't have loaned me money.
I called Monday and said I don't care what we signed we won't proceed without a new loan officer and one that can get it done in 3 days. All was granted and we got it done. Little in the way of paperwork these days can't be called back for review. The web and public info acts protect an awful lot of stuff that years ago would be scary. IMO of course. DanT
I went in and had a short meeting with the closing agent . I verbally told him I had sold half my tract of land . If Im to split the land its up to me to legally half it . I did not want o pay for a survey to half it but I didnt want to be screwed either. It was my belief the new buyer would have to pay for it split legally before he built his new home and his bank would require a survey included on his new home loan papers . I was correct but this guy wasnt thinking that far down the road. I said lets take my legal and say the North half of my full legal and place that on the contract . He said that would work. I said lets do it then. That was all verbal unless he jotted it down but it was nothing I signed of course.
The only thing printed was my legal when I returned to closing . There was no mistake in print . It was correct. They would have legally owned the whole tract of land .
If I was the buyer and wanted to steal the other half of the tract I would have somthing to take to court . I have a deed that says I own it signed by both parties present . It was a cash deal which you might not be familar with or at least the way they are done here. The cash is in the center of the table and its exchanged for a deed in the middle of the table . Its the only way to do a cash deal. No one walks out of closing with out a deed if they layed cash on the table and left it there. I dont . Thats why I wouldnt lay my cash down on a Friday , sign and walk out , to let them come in Monday on a split closing . As soon as I found out I wouldnt be picking up a signed deed in exchange for my cash I walked out .
Tim
Ive sold some big personal items such as cars , trucks , boats , etc.
People I dont know come here and offer to buy an item.
I only accept cash or a money order. Ive lost some sales becasue I wont take a check and let them leave with my stuff . Just come back with the cash and you can take it . Ill hold it till you pay for it but I dont take promises. A check is a promise not money.
I do the same thing with rentals . I wont take a check on start up renters becasue Im in full control of my house. They dont have it yet . I do. The next month they can write me a check becasue they are in it already.
You sound like a guy that would sell his truck with a check and let them drive off knowing you could get it tracked down if the check was bad. I guess you could if you could find them but who pays you for the damages?
Tim
Tim, I have never sold a guy a truck and taken a check. Possibly a money order...but I don't remember. Probably not. I usually give my cars and trucks away when I'm done with them. I have never been to any closing that had personal checks or cash. Certified bank checks are the only monies our closing agents accept. I would never go to a closing on a property that didn't have a proper purchase agreement, including the exact legal description. I would carefully review the legal description before I went to the closing table. If the documents at the closing table weren't the same exact documents that were supplied for review, I would "stand up". Of course, I'd be the only one in the room because theres usually only one at the closing...either the buyer or the seller. The only people that gain from dual closings are the closing companies. They get to tie up my time while I sit there and watch the other party close. I get really, really bored at any closing so I have no interest in being involved in one that I don't have to attend. Your poker game analogy is delightful and it fits perfectly. The thing that you aren't understanding is that it works exactly the same if there are dual closings or separate closings. Your physical presence of "standing up" is no different than my method. I get the closing papers in the comfort of my office. I read through them. When I see something that doesn't fit my original terms, I call the closing officer and alert them that something is wrong and it needs to be fixed. There is no threat of not closing implied...it's simply a fact...the paperwork is wrong and if they don't fix it the closing won't happen because I'm not signing the paper. I don't have to tell them that...they know it. So, the theatrics might be fun but I haven't found them to be necessary. When I go to a closing, it's in my home office. I review all the docs, sign them if they are right, then overnight them to the closing officer. It's very simple and I wouldn't do it any other way if I can help it. I would avoid the dreaded dual closing with every fiber of my being because they bore me to tears LOL. Maybe one of the reasons I'm not so thrilled to be physical at a closing is becasue I don't intend to try to squeeze anything more out of anyone at the last minute. I'm a handshake deal kind of guy. What I agree to verbally is what I will put down on paper and stick to it. The last deal I did, the guy verbally agreed to things and tried every trick he could think of to improve himself in the written purchase agreement. We wore our fax machines out sending me offers that were rejected because of the language. Every time, I simply stuck to my guns and referred to the verbal agreement that we reached. In the end, that is exactly what was done. Same results as you get but different methods. The bonus as I see it is my blood pressure never rose and I'm not close to a heart attack everytime I do a closing. Thats worth something in my book. Bob's next test date: 12/10/07
Thats becasue you dont do cash offers.
You always want to defer.
"Thats becasue you dont do cash offers."Thats not true sortof. The last deal I did put a new mortgage on it. So, the seller got his cash but we don't bring in wheelbarrows of it. We bring in certified funds. I put a $10 bill down on a 350k property at a realtor's office and it dang near panicked her. She didn't know how to handle the cash LOL. She ended up photocopying it and writing reciepts and generally speaking it was a pain in the behind. So, even if I was paying all cash or receiving all cash (done them both ways), all of my comments apply. Separate closings, with certified cashiers checks take the place of green. All the hud statements are available early and all the docs can be signed in the comfort of my home. I've even had the mortgage people give me my loans at my kitchen table.
Bob's next test date: 12/10/07
I have my house for sale and my sign is out in the front yard.Tonite my phone rang at 6 PM and a young sounding guy said "would you be interested in selling your house rent to own - I will pay $20,000 as a down payment"I have my house for sale for $99,900I told him I want to "cash out" and move on and I'm not interested in owner financeHe said OK thankstoday is saturday and one hour later the same guy calls me back and says "I talked to my finance guy and I think I can get bank financing"He said "can my wife and I look at your house this evening?|I said "no, not tonite but I'll call you tomorrow and see if we can set something up"Any idea what this guy is trying to pull?
No, I bet he doesnt have 20 grand .
I think pull is correct.
Tim
He's just finished a seminar on flips and he's searching for motivated sellers. Only, he forgot the lesson on how to identify them. Or, hes a confused buyer and just wants a house in your neighborhood and he's not the worlds most sophisticated buyer. Treat him like a legit buyer and grill him. You know the drill. Remember, buyers appear out of nowhere and you are looking for a buyer...treat him with respect until you know for sure he's not a real buyer. Then, send him packing with respect of course. If he's a newbie investor, he's just trying to earn a living like Moody. Bob's next test date: 12/10/07
lol ..... thanks for your input.If a realtor calls and wants to show this house it takes me anywhere from 2 to 6 hours just to get the house presentable.After a while you get tired of wasting time cleaning, vacuuming, doing the dishes, shining the toilet, etcI've gotten to where I just drive my car down the street and park it during showings and I watch the people as they go in and take a look.I time how long they stay. The last people stayed for 20 minutes. Which is a long showing and would seem to indicate interest but not so.I have had some people stay less than five minutes and they take off.
"If the agreement is structured properly, you won't have the ability to stop payment if you decide to get uptight about something. The payment becomes automatic and doesn't necessitate your input.
Smart GC...."
Nice speech Blue. Youre not any different than I am. Youre funny . Thats why you would not want someone like me at closing with your customer . YOU would want to dictate them. Nice buddy.
For those that dont know I took this from the closing company thread.
Tim
I don't know if you kidding me or serious. All I'm saying is if the builder performs properly on his contract and can prove it, the escrow agent will be bound to make payment. This will help the builder to avoid a wishy washy buyer who doesn't want to make payment because she doesn't like the pink brick and now wants the red brick. If the original contract calls for pink brick and pink brick is laid, the escrow agent will make the payment. At the very least, the money will be in escrow and the homeowner won't be holding it and earning interest. If the builder doesn't use a title company, the leverage factor is substantially increased in favor of the buyer. I don't blame the builder for wanting to escrow the money. It protects both of them. The way we do business here is they give me the money and hope I do the job. It's a risky proposition for the buyers. If one of them calls us on our method of payment, I would suggest using a title company jus t like the poster's builder is doing. It protects both of them equally. Bob's next test date: 12/10/07
"If the builder doesn't use a title company, the leverage factor is substantially increased in favor of the buyer. I don't blame the builder for wanting to escrow the money. It protects both of them. "
I think your view is tainted as I mentioned earliar or slanted to the builder . Anyone that is in business is looking out for themselves . Thats how it works as I explained to the op. Kudos for you . Aplause.
You had mentioned the the closing company would make payment whether the owner was happy or not and then again you used the pink brick . The first comment you made was a direct opposite to you keep mentioned it "protects both". Thats not true . We could go deeper in this but I dont see the point . The best representation an owner has is the bank and a lawyer. If an owner uses them he is protected as well as he can cover himself . The builder has less leverage in that case as you said which is surely true. If I was a builder Id be jumping for joy with your set up but not as an owner where I had less leverage .
The bank has the burden of the moola and protecting its course to make sure it finds its rightful home against the mortgage . I think thats quite fair . They want a dwelling they can sell after default .Afterall its their money. Not one that doesnt have a foundation because the closing company paid the builder no matter if the owner was jumping up and down over it . You mention pink brick but foul play would be a better description of the most encountered problem.
I was a building inspector and that gave me a good education of what some tradesmen try to pull off if someone is not looking to save a dollar . If they were all good ole boys we wouldnt need building inspectors . Im here to tell you we are in serious need. Its ugly out there ! I should also mention developers , flippers, heavy construction of utilites, General contractors , mechanical trades, truss manufactors, and you name it . You cant cant trust anyone so you have to be educated enough to cover your self . If youre not thats why they have professional people to instruct folks not educated.
The biggest problem here is 75 percent of the houses built are out side the inspection area. Our inspections here are only in the city. The result is that people building need to hire them to inspect anyway but they dont becasue they dont have the knowledge too. But when the house is up for sale they get caught by the buyer hiring a home inspector . Even then he can catch what I caught .
Tim
Edited 7/14/2008 2:10 pm by Mooney
And yet the houses outside of your inspection are still standing! Jim, may be right, get rid of the building inspectors!<G>
I knew when I made the inspector speech you werent telling your wife to be sure and send me a Chritmas card. <G>
Tim
Edited 7/15/2008 1:08 pm by Mooney
Just funnen ya!<G>
I know it but I remember a discussion years ago and I did not forget . I was funnin to and that discussion made me remember it .
Tim
Tim is there a Homevestors Franchise there where you're at?They supposedly sell houses to investors and I was just wondering if you had ever bought one through them.http://www.homevestors.com/modules/sell_a_house/sell_house.php?refid=1&keyword=homevestorsthey used to advertise a lot and they came across like they were helping people by buying their "ugly house"I think they were flipping a lot of houses a few years ago but I'm not hearing much about them nowdays.At one time they seemed to have the inside track on buying homes directly from the public.
Never heard of them.
There was a professional group buying houses at repo auctions but since its got bad they arent doing it anymore here. Looks like the same people . I never learned how to buy from them.
I was never sure how they did it . Im sure they are sitting in offices doing all the work but never understood how they could buy without ever seeing it . They could track the houses and their sales but they would not know the condition.
Tim
Tim, I bought my house five years ago and walk my dog every nightWe walk by a nice looking house here in my middle class neighborhoodBut it's been vacant since the day I moved here.Looking back over the years I have seen many homes just sitting there vacant.The house I'm referring to - someone is paying $150 to $200 per month for taxes and insurance.They probably don't owe anything on the house. But why let it just sit there vacant?
heck thats my house,is the rental sign down!!!!! larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I think youve guessed it pretty well already.
They can afford it . Someone can.
I used to work those type of houses. A kind , no thanks came when I offered a lot of times.
Ive looked at the tax books and found out things .
A lot of it is relative related. Too may to list . Just about any thing you might think of as a reason to.
Old folks homes have lots of owners.
People die with several properties and people with money can inherit them in another state or what ever and just not take care of it for a long time.
Houses somtimes get tied up by the state when someone dies and stays in limbo. Theres a long time period somtimes.
5 heirs and two or three wont sell.
Sometimes for different reasons heirs somtimes have to wait . All heirs have to be contacted. Some of them may be "out of touch". Criminals, homeless, ,missing, lost track of for a ot of reasons.
Somtimes heirs have to be declared dead for the other heirs to act legally. Family members dont want to do that . They want to hold on to hope .
Tim
Sometimes the heirs have died and the estates have to be opened up to properly fill out paperwork. Guess how I know that. Bob's next test date: 12/10/07
homevestors plan is pretty good as long as it works,if something goes wrong the will leave a lot of banks in the hurt.
with all the advertising they do they get people to call them that no one else knows about. i'm not sure what their ratio is but they look at buying in the 40 -50% of value. now most of these houses are in need of repair.
so they know how to get in ,foo foo it up and get it on the market. i believe at this point they finance it out to the bank at 75 ltv.
now they put it on the market at about a 125% of value and will let people in for very little down and carry it,by doing a wrap around on the first mortage.
so they got all their money plus made probably 10% when they financed it, now they take a 3k down payment and charge a high intrest because these are bad credit people,so they make another 150. a month.
now you see this coming ,people quit paying the just boot em ,grab some more white paint and do it again.
the amazing part to all this is what they can buy a house for,i don't know what pitch they give people ,but it must be pretty good. i saw them buy a house that was worth in it's present condition 40k,all fixed up maybe 60. they got this bought for 17,500 threw some money at it and retailed out for 69,500 on a carry. sweet. the whole thing is very similar to the tote the note on cars.
they buy so many house's they will sell any they have as is,the one above they would ask you as a cash buyer 37,500. and go on and buy another one. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Tim, all of your concerns can be covered in the build agreement. I knew framers who wouldn't build for homeowners who were paying cash. That sounds strange but hear me out. If the homeowner is paying cash for his entire house, he isn't afraid of a lien. So, after framing the house, the homeowner could withhold 20k because there was a crack in a trim board that needed patching. Who would the framer appeal to? How would he get his money? If the contract was set that the escrow company would release the funds upon the passing of the rough frame inspection, then the homeowner would be taken out of the equation. The framer would present the proof that it passed rough inspection and the payment would be made. Now, lets look at it from the homeowners shoes. If there was something seriously wrong, he would contact the building inspector and point out the deficiencies. If the concern was legit, the building inspector would not pass the frame. How is that unfair? If the work is done in areas that don't require inspections, the homeowner should contract with a competent third party inspector and both the owner and builder would agree to some mutually agreeable third party inspection. Upon passing of the inspections, each payment would then become automatic by the escrow agent. How is that unfair to either? Bob's next test date: 12/10/07
"How is that unfair? "
Blue , lets not change the text already written becasue thats what I responded to.
With out going back , coping and pasting , you made a statement that said in effect the builder would get his draw whether the owner wanted to pay it or not.
I made the statement about no foundation I believe .
When you have an inspection as to the "work done " , they come out "after its done " and sign off for payment . How would an escrow agent even know there wasnt a footing underneath those blocks ? Im back to paying that draw no matter what as you said .
Right now theres not a lot of framers that are picky since they are mostly out of work. Ive never heard of a contractor refuse cash . If one did , he could be eliminated easily out of the line that would . Whick brings up a new point . Ive already mentioned a lawyer and a banker . Ive also mentioned having control. As long as I can gain control I wont give it up. He would have his butt out there patching trim boards if he wanted his payment . In the morning so he could pay his bills . Its all about leverage . He agreed to do a job satisfactory in my contract including within the current codes . Patching trim work is not in the codes . In fact they could do sh^tty work and the inspector would pass it . Thats not how codes are designed . Thats why the word satisfactory comes into so many contracts.
Clint Eastwood said there are two kinds of people . One with guns and the other digs .
That was a funny quote in a movie but its best fits the description of real life . Contractors work for people with money. Its always been that way. There is always someone in control of the money in every agreement . I try to be that person. Probably my biggest beef is giving someone any control thats not invested. I dont like a buyer putting down 500 dollars earnest money and tieing a house up for a month when Ive paid for the house already. But thats where most of the monney comes from selling homes , so IM forced to work for them and their banks if I want to get paid . They represent somewhere around 90 somthing percentile of the buyers. They have the gun and I have to shovel.
I also detest giving a contractor 50 percent down when he hasnt got his shovel out of the truck yet . So far I havent gave up that control because Im the one with the money. As long as there are people that work to get paid , Ill keep my style of payment.
Arguably the biggest complaint with contractors is they dont show up for various reasons. There have been so so many complaints written here that goes like this ;
I paid this contractor and now he wont come back . What should I do? [well for one you shouldnt have paid him before the work was done duma&&] They normally are out the expense of hiring another one and worring about that one but they are severely gunshy. So the next contractors chances at a relationship are slim to none and somehow that contractor must make up for what the last one did . He can go to court but he doesnt have any control. He gave it up. Its a lot harder to get money back or the work it stands for becasue now the contractor has the gun . If he did come back he would not have to please as you say , just complete the work and leave . He has no incentive .
I think your biggest misconception is thinking that business is fair. Its never been fair . People agree to business deals but its never been fair . Thats a thread by its self.
Tim
Edited 7/15/2008 10:53 am by Mooney
Edited 7/15/2008 11:27 am by Mooney
"How would an escrow agent even know there wasnt a footing underneath those blocks ? Im back to paying that draw no matter what as you said ."An escrow agent would be looking at several documents on their desk to determine if there was a footing. They'd be looking at a sworn statement by the contractor saying it was done and they' be looking at an inpsector's statement saying it was there. "Thats why the word satisfactory comes into so many contracts."We use a different term. We use "substantial completion". That term provides for payment when the property is useful for it's intended purposes. That means, payment is due, even if there are service items like a cracked board. That means, if payment is due and you decide to withhold payment, the penalty clauses that are written into the contract will be enforceable, including collection costs, interest and stopping further work until payment is made. I specifically used the cracked board to demonstrate the issue because I knew you'd take the hard line and say that nobody will get a penny till that board is repaired. Well, maybe the board was good when the carpenter nailed it up and maybe the roofer cracked it. I've seen that situation at least 50 times in my day. Are you going to withold from the carpenter because of the roofer? What if the backhoe operator damaged it? I've seen that situation before. I've had cars roll down a hill and smash into the house. Would you withhold payment then too? I'm trying to point out that sometimes there are legitimate reasons why payment might be due, but there are also some very hard nosed indivual homeowners who use their paychecks as battering rams. Guess how I know that???!!!!And so, you and I will probably not agree. I don't think you are trying to understand how it's possible that the use of an escrow can be fair to both. You're trying to make the case that business isn't fair and I'm just trying to explain that it's possible to make things "fairer" from both points of view. Everything you're telling me tells me that you want all the power stacked in your favor, if you are the homeowner and that would be a very big red flag if I was contractor. I don't think you and I would ever agree on terms. I've been battered by too many homeowners with your attitude over the years and I'm pretty sure I'd pass. Like I said..."smart GC". Bob's next test date: 12/10/07
Were more alike than we are apart although you wont want to admit it .
We both want control. I dont care if you want to admit it or not . Ive known you for a long time now and Im not basing my opinion over yesterday and today. You want to present a sales approach to getting there . I just know you too well. You dont come on here every day for years with out members thats been here knowing you. Seems strange since weve never formally met but its close to the same thing . Enough for me to call it .
Of course you know me as well. If anything I might should try to hide it but like you said before thats not my style . If I was to guess I got most of my style from landlording and that helped what little inspecting I did . I also got a lot of experience from doing cash sales . I said a long time ago on here that I wasnt a salesmen. Im not and Im not at my best if Im presenting to someone . Thats not my cup of tea and you enjoy it . I really dont to tell you the truth. In the same breath I dont mind confrontations. We both handled crews and IM sure we were very different bosses. Same with business . As you said before you got your style of getting it done and I can tell your comfortable . You should be . I am too.
Nope we would probably argue till death ended it by natural causes on some things like this . We would probably have fun working around each other. It would not be a good fit as you said building for me . You know why of course and its not personal at all. Ive got friends I cant hire for the same reasons . No ones makes a lick on me or Ill do it myself . I cant disagree with someone wanting to make more money and gain an edge by being controlling . I just dont allow it on my job when Im paying the bills . I pay when the job is done and up to standards or else I dont till it is . I pay as soon as your done and I like to pay in cash. Theres no need to send a bill . Ill meet you on the job before you get loaded. Thats why they work for me . Since everyone has to be paid then I might as well meet them with cash on the spot since they did what I wanted. I owed them till then so I dont make them wait. I do them all that way. They never question not getting paid or worrying about it . Thats part of the image I wanted . Ive got to do somthing good to go with being controlling .
So cash talks and bull sh^t walks I guess.
Tim
You want fair ? Ill show you unfair , lol.
Apraisors are GOD. They are responsible for setting the worth of the world. On their opinion I might add thats only an opinion you cant sue them for but none the less their opinion is the final word. They might as well be in the bible .
The bank hires them and we pay for them. They work for the bank though so their apraisels are indicative of who they work for .
500 bucks says that I can hire an apraisel through a bank and out sell him on my house. I can beat one 10 out of 10 times. I can always sell a house higher than the apraisor hired for my loan through my bank. Its certainly not fair but what does that have to do with anything ? The banks got the gun.
Apraisels done off sq ft is about like framing houses by the same and taking one and all for that price . Thats what they do. In 1990 the bank hired an apraisel that I paid for or they thought I would pay for ,....
I bought a house in an auction on the court house steps conducted by the US marshal. I had a letter of credit that I gave to the marshal after being successful. He gave me 90 days to pay in full so off to the bank I merrily went . Banker orders an appraisel for me but I cant order it becasue it has to be on their list of ones they use. Wonder why? I change the locks and put them in the lock box in the office forgetting to give one to the bank or anything else . I go on vacation in Vegas for 2 weeks . I get bank to find out the papers are ready. What about the apraisel? Its here in front of me the banker said . I mentioned that he did it without having access to the house because I forgot to leave keys . I was planing on running over a key and thats why I called really. I wanted to reject the appraisel and told them so. That would be the right ting to do. However they would have to pay for it and I would have to go to another bank. It was "enough" to make the loan work which is what the bank wanted but niot what the house was worth. I let it slide becasue everyone got what they wanted but fair ? Of course not . That is never a fair practice but it holds up every day. I didnt think I would ever use it again but I was wrong . I should have held their feet to the fire. No one ever does so the laws on it never change. However its still a form of hiway robbery as the expression goes.
Lots of practices not fair are accepted practices.
On the other hand I can surely see where a contractor would want to have more control and dont blame them for wanting more . Id like to hire my own apraisors and control them. Its not gonna happen.
Tim
Edited 7/15/2008 1:38 pm by Mooney
i have no idea what his game is,but if he has a loan officer that ok's him at 6pm on a sat eve. i want the loan officers name.
usally it's buyer beware,maybe here it's seller beware............ let us know how it goes.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Thanks LarryAs a realtor I'm supposed to treat everyone the same and I'll be honest I have never screened anyone.If my phone rings and someone wants to see the house I bend over backwards and jump through hoops and let them see the house.When people come to the open house, it's very hard to get them to open up and even have a conversation about real estate.They are very nervous and assume the realtor is going to treat them like a used car salesman.It's really difficult to spend 5-10 minutes with a perfect stranger and be able to establish some kind of rapport with them and have them accept you and choose you as their realtor and be the guy who takes them around town showing them houses a day or two later.
i understand where your coming from,alot of people don't even want to sign the sheet with there name.
what use to hook me ,and this is back in the dark ages,is when the agent would hand me their mls book and say"see what you can find" they had me for a customer right there. i did have a guy a few years back just pull up on his notebook and tell me to start searching,worked out well,he sold me a house.
it's the same when i was in the car bussiness,people truly don't know what they want,what they need,what they can afford.it is hard to get people talking about what they really are looking for.
one of my stupid salesman tricks in the cars was, i would hand them cash to stop and get gas for the test drive,except what i gave them was a 2 dollar bill. 90% of the time the people would not spend that bill,they would just pay with dollars. my theroy was when they got home that night,there would be that 2 bill and they would remember me and the car they drove.this worked pretty well.
so using that stupid idea ,how about your bussiness card with a real kwikset key glued on it,you know"the key to there new home?" you can buy blanks on ebay for about .25 a pc.it would say to me your willing to try something different,lets give this guy a shot.
reread your post,forgot about the car salesman reference ,lol so maybe that was a bad example..................if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
lol I like your idea Larry.I've got just a plain ordinary card and I hand it to people and they have a blank look on their face.thanks again
Larry I don't know if you can help me with this or not but I have been in sales for six years now and am struggling with one aspect.On each and every deal, we all start out as friends.I show the house and the buyer is interested and on the way home I call the other realtor and tell her the good news.There is excitement in the air!!!But then we make our formal offer the next day and when they see our offer they are hurt, insulted, disappointed or they feel disrespected.We negotiate back and forth and over time the feelings go back to warm happy feelings and we are moving forward. We come to an agreement on price and the seller signs the contract and the house is "under contract" or "contract pending".Anyway, this process continues and there are hurt feelings & insults again when the inspection is completed and the Buyer asks for something.I guess my question is when you were negotiating all those years with a car buyer and you had to say no to their request, How do you get them to recover and move back to a more positive state of mind?For example, they make you a low offer and you come back to them with a higher number and they are angry, hurt, or disappointed, mad, and frustrated that you won't cooperate with them.
In Kansas City the market is down. I think that sales are down about 50%.I am not sure, but I think that price drops have only been moderate. But might be more in the older lower cost houses.It is hard to tell by the newspaper articles as they talk about average prices and, as they admit, it is not also the same collection of houses being sold.The most price drops are in Jackson county which includes much of Kansas City's older areas.Anyway here is an article on banks auctioning off repo's.http://www.kansascity.com/115/story/702907.html"Bidders find huge bargains at real estate auctions
By STEVE EVERLY
The Kansas City Star
Richard Keller of Kansas City has several rental properties and is a regular at foreclosure auctions. On Saturday he was “looking for bargains†at the auction of 91 properties in the metro area.
Richard Keller of Kansas City has several rental properties and is a regular at foreclosure auctions. On Saturday he was “looking for bargains†at the auction of 91 properties in the metro area.
Sam Marshall of Hudson & Marshall Inc. raised his gavel in preparation for a sale of one of 91 foreclosed houses Saturday at the Sheraton Kansas City Sports Complex Hotel at I-70 and Blue Ridge Cutoff. About 250 people attended the auction.Marjain Breitenbach arrived at a real estate auction Saturday hoping to snag a good deal on a foreclosed home in Independence. He wasn’t disappointed.The two-bedroom home at 2328 S. Claremont Ave. had been purchased for $69,000 before the owners fell behind on the payments and the lender foreclosed on the property. Breitenbach thought he could buy it for $30,000. He got it for exactly half that amount.“I’m in good shape,†he said.""Saturday’s auction added to the gloom for those worried about sagging real estate, suggesting that, especially in some neighborhoods with modest homes, real estate values are being pummeled.Of the 91 houses auctioned off, only two were in Johnson County. A majority of the houses auctioned were small, with roughly 1,000 square feet of living area and one bath. A home at 3336 Wabash Ave., which Zillow.com, an online appraisal site, had estimated was worth $67,900, was auctioned for $5,500. It had been on the market for about half the appraised value.The auction was held by Hudson & Marshall, one of the largest U.S. real estate auction companies. The company said this wasn’t its first auction in Kansas City, and it was now auctioning off nearly triple the number of homes compared with two years ago.“The foreclosure business is very busy,†said Pat Harvill, a partner in the Dallas auction company.Lenders were once reluctant to auction off their foreclosed properties. But they have changed that stance as their inventories of the homes have continued to rise. Another sign of their eagerness to sell is that while lenders have the right in the auctions to reject a winning bid, they are increasingly declining to do so. About 80 percent of bids are now accepted.""Hudson & Marshall officials said that while the majority of bidders are still investors, the company is seeing more individuals wanting to purchase homes for their residence.Michelle Bishop of Los Angeles is one of them. Originally from the Kansas City area, she hopes to eventually come back here and wants a four-bedroom home for herself and her family.Shut out of the California housing market because of its high prices, she hopes to get a residence here at a bargain price.An auction, in short, is her way to the American dream of home ownership.“That’s exactly the way I look at it,†she said.".
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
definition of a good deal: nobodys really happy
everybody walks from the deal grumbling a little.when i read that i had to think about that. but that is pretty true as a seller if everything went my way the buyer probably left some money on the table.as a buyer if everything went my way the seller probably had some circumstances that made his bargaining position weak.
in negotiations your not going to or even want to make friends,your on the opposite sides.as a seller ,and i know you have no control in this,never be offended by any offer. worst i ever got was i had a place at the lake,asking 42,500 first contract they offered 12,500 . i didn't use up alot of the agents time thinking about it. finally they got to 36,500 and i got another offer the same day for 36,500 cash,i took the second guys offer,but i was never mad at the low ball guy. he liked my place he just wanted to buy it as cheap as he could,i was never insulted.
going back to the cars ,i remember those days of standing on the lot in 10 degree or 101 and finally the guy says he'll give me half. i wasn't always pleasant with my no,usually it was something like "i can't take that for it and eat supper tonight,but i hope you are able to find one for that price and if you don't like it bring it to me i'll give that for another one,shook his hand and walked to the office. now if a guy offers me within 10-15% it's time to start talking and usually when were done he would of liked to have bought cheaper,i would of liked to gotten more,but we both decided to live with it.
as far as you and the other agent involved i got to tell you i can't see where you aren't buddies when it's over,why? because your not the one that wants the guttering downspout rerouted,thats the buyer,and he's the guy thats paying everybodys wages on this deal so that makes him boss,now you 2 can go out after closing and bitch about the "boss" all you want,just like others do.
as far as keeping the buyer and seller happy all you can do is be honest with them and hope for the best. i'm of the old school buyer beware,i've bought some bad deals,but if i had seen the seller down the street out of gas i would stop,tell him how he got the best of me,hop in lets go get gas and laugh about it. but it's going to be really hard for both to be happy.
i remember my first separate closing,whats this? now i much prefer them,if i have a question i can get a answer,but i don't find any good things happening around a closing table.i think that is just a brewing ground.and in fact i closed on one 45 days ago that i made a special point to show up early and get my business done and get out,the seller was a squirrel and it was best just to let the title co. handle him.
another element involved that is human nature ,buyers remorse,sellers remorse ,i have had it at every closing,thinking what the hel am i doing .did i give to much ,did i sell to cheap etc.most people feel this somewhere along the deal i think.one more reason for separate closings.
not sure i really answered anything here,but your not all going to be friends when your done most of the time.to much money involved.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Larry, I went to an estate sale today and they had a 1993 Buick LaSabre for sale It has 60,000 miles on it and they are taking offers starting at $1,500It looks like a one owner car
Yesterday I reported that a young guy had called me and wanted to see my house with no notice.He wanted to buy it rent to own.Anyway I called him at noon and got his voice mail and told him I'm having an open house from 2 to 4 PMI didn't hear anything and called him again at 2 PM and left another voice mailHis wife called me a few minutes ago and said they couldn't make it to the open house today and would call me another time.don't you love working with people
I frankly think you didn't do what you were paid to do in this event. Part of representing the buyer is putting them at ease and in a comfortable position to get the deal done, as much as possible anyway.
If the negotiations were tense why put your buyer in a position of discomfort? Why not set up a seperate closing? Just because you think people "should" be able to get along certainly doesn't mean it will happen so why risk it? In my mind good customer service would have meant a seperate closing.
My question on the utilities is why didn't the buyer have them switched already. I always call the Monday of the week of closing and give the go ahead. That way there is no break in service. Stuff like that is just details and part of business. Homeowner often only buy two or three houses in a lifetime and count on the realtor for advice in these issues. Unlike we old war horses that enjoy the deal as much as the house.DanT
I met my buyer at the parking lot on the morning of the closing and asked her if she wanted to go forward or wait a couple of days until we had resolved a couple of items.She said "lets do it" and so we went ahead and proceeded.We had postponed one closing already and so we did not have a firm closing date. She really did not have a firm date to give the utility co's to have the utilities put in her name.She transferred the utilities to her name within one hour of closing.You commented about my decision to go ahead and spend 10 minutes in the conference room with the seller making small talk and I just wanted to let you know that was my client's choice to do that.She was asked if she wanted to do it this way and she said "yes, I want to talk to her (the seller)"She had some questions to ask her and I think she wanted to shake her hand and tell her thank you and how she and her daughter are looking forward to owning her home.I think it was her way of having a happy ending to what has been a difficult process and who knows maybe even making a friend out of a difficult situation.(Now where is my fire proof clothing - I'll be getting flamed even more during the next few hours)
No, no flaming here.
I just made an observation based on the info you gave. So you did what I thought you should have, good job.
Just a thought though. I usually call for the utility transfer the day before unless it is already agreed on by buyer and seller. What would it cost me? $30? I just want a seemless transfer so I can get started.
And the only reason I felt the utility thing was a big deal is because you said you though it was and were mad about it. Frankly if I hadn't called for a transfer I wouldn't have been surprised at all the utilities were off. DanT
when things go south crazy things start to happen.It's like a game of chicken.Here's what I mean.As a buyer You do your final walk through and there are minor details you're not happy with.Do you cancel the closing over minor issue such as carpet cleaning?It's like a game of chicken.Deep down, neither party wants to cancel the deal. We're all in it too far.Deep down, Neither party wants to postpone another closing. We've juggled around our schedules to do this.People want to "just get it over with"If you cancel the closing on the day of, the closing officer is sitting there with all the loan documents which are dated.New documents will be needed for the new date.Closing Statement (HUD-1) must be re-calculated (loan interest, anything that is pro-rated such as property taxes)I'm guessing "old school" is to just walk away if everything is not 100% how you want it.I will tell you that I have seen one situation where the other party walked away at the last minute. I was working with the Seller and my eyes popped out when the Buyer just walked out the door and drove away. She was not happy when she looked at the closing statement and saw all the fees and expenses related to her financing costs.(yes I realize she had all of this info in advance of closing so I really don't know why it hit her at closing and she walked away)The woman did get things straightened out and she did buy the home 4-5 days later.It's an interesting process with a lot of emotions.
"Do you cancel the closing over minor issue such as carpet cleaning?"
No, but then I do this as a business. So carpets being dirty to me is a given. If they are not then it is just a bonus.
You are right that it involves a lot of emotions for people. People like Mooney, Jim and I count on that fact at times. One of my favorite bargaining moves is to tell them I want their new mower or tv thrown in with the deal. They often become very possesive of that object and less so of there home. I've used it with success a few times during the closing negotiations to get the price down a bit more. Ahh, emotions. Great business thing. DanT
:"It's like a game of chicken."
Exactly or it can be .
I look at it like this from my perspective .
I read the table of all its members. Somtimes theres a banker there . two buyers, two sellers, two agents and the lonley closing lady in the middle of things. The closing lady doesnt always have enough knowledge to go deeper than what the contract says . Shes just there to sit with us . At the first sign of trouble and I start asking questions she runs and gets the owner and he or she acts like a floor man at a gambling casino. I know shes not gonna weather the storm alone. They need to close to get their money for the closing and finish the deal.
The agents just want their money[their check] . They want to close and hit the checkered flags . Thats all that matters to them and I dont blame them one bit.
The banker wants it closed becasue as you said everything is figgured up to that day. Not tomorrow. They want it done and to close their brief case.
That leaves the owners and sellers . Buyers normally are foaming at the mouth with anticipation of getting their new house . If they are signing quickly thats my read. As a seller if I want somthing its a perfect time to stand up. Everyone knows what standing up means. Its the same if a buyer has a complaint and stands up. Most of the time its not a bluff but its a wonderful time to pull off one.
Leaving can be a semi bluff . I can walk out of a closing and say nothing which is often best. I havent stated my intentions so they dont actually have a playing card. Is it over ? I didnt say it was over. They sit and talk about it and decide to call me . The whole room is put on guard and it depends on what the party wants thats still sitting there . Most of the time things get changed to suit the walker . Afterall it could be 4 to 2 against the ones still sitting there.
If I walk as I said before the most I could lose is the sale and some costs. If its wrong I dont owe the costs. Most of the time they want me to come back and close . IN that case Ive lost nothing . Odds are the risk is minimal. Its a post oak bluff which means I didnt risk my pot but Im putting theirs at risk. Say the house has sat for a year with out a sale empty. They have a pretty big pot to lose. They are already losers at that point. On the other hand if the buyers mouth is foaming to get the keys they think their whole pot is at risk not getting it the home of their dreams . Its purely emotional. They have no risk but in their emotional state they are weak.
Think that out the next time someone walks.
Tim
Tim, I understand that you like the fun but the goal is to close on your terms. I'd do as Dan suggested: go over the Hud statment a few days early and then have them close first. You close second. All the deeds would already be signed and in the possession of the closing officer. You'd be one of those guys that wanted the deed signed and you'd sign the check then make each other square up and offer each other the paper at the same time....then on the count of three grab! LOL!You are too funny! Bob's next test date: 12/10/07
Im plenty happy closing second but they wont do it . They want me first . I already been over this. Go ahead and leave your money on the table and sign the papers . Ill be in be in next week to look it over and if I like it Ill sign the papers.
Tim
I was thinking more about this while working around the house this morning (ok, I was dusting) and remembered one that was a bit of a story.
I bought a house in the old money district here in town. Fixer upper but a nice old brick to move my family in. While signing the papers (seperate closing) I was having material delivered and planned to go over and put it in the house as soon as we signed our lives away.
The gas inspection called for a line test by Columbia Gas. A few months earlier Columbia had started to test residence with 90PSI instead of the old 8-12lbs. The realtor had the gas line tested by "Bobs Plumbing" or the like. I asked if it had been a high pressure test. They of course didn't know. So I wrote on the bottom of that form that I was concerned about this and if during the gas transfer (Monday as we were closing on a Friday) the test failed I would want to revisit this issue.
We continued through the closing and I left to go put material in the house. An hour later my realtor shows up in a panic and says the deal is off and I really screwed up. I ask why and he say by writing that it puts the closing office, buyers and realtor at risk and they want everything back and the deal is off till the gas line is re-inspected or I sign off on it.
I say BS. I didn't not follow the contract, they did. I signed everything in good faith, have the keys and I am busy! He stammers and stutters a bit and says but I don't understand, they are really P*ssed and I have to do what they say, after all the title company owner is a lawyer and the realtor has been doing this for years and knows her stuff yada yada yada.
I get p*ssed and tell him "look, I own it, I have the keys and an inch thick stack of papers to prove it. They didn't follow their own contract and I am not going to suffer for that. Come Monday we will know if all is well and if it is it will be over, if not I will call them and ask them to pay for a gas line repair, simple as that. Now leave me alone".
He says everything he has already said again. I say "Get out of my house. And if you want the son of a b$tch back bring your lawyer, realtor, a warrant and a couple of cops because that is what it will take." I then went out in the front yard and picked up the for sale sign and flung it out in the road and said "And tell that b$tch to get her Fing sign out of my yard!".
He left and they appearently had a little convention and called my late wife. They wanted her to talk to me. She said "no, you've made him mad now, we need to leave him alone till tommorow and he will be fine. But keep in mind we didn't do anything wrong so why not just go with the flow and see how the gas test comes out." She said all this in her smiling sweet way she had and everyone agreed begrudgenly to do so in the end. I never heard another word from them about it. Gas line test passed and all was well. When we have used that closing company though they are a lot nicer than before lol. DanT
Great plan. So great as a matter of fact, that I used it on my last one. Then banks changed their parameters on what they were willing to lend investors, and I got stuck with the bill.
I don't think times have gotten bad enough yet to make the really good deals come out.
"Coming to recognize you are wrong is like coming to recognize you are sick. You feel bad long before you admit you have any of the symptoms and certianly long efore you are willing to take your medicine." -Charlton Heston. My job here is to see that you take your medicine.
Maybe not but this house is listed at 34900 and the SEV is 44000. The hosue will pay for itself and provide 400/ month for cashflow.
If they get better than that, i'll be all in.
How much rent are you getting on property like that now? Bob's next test date: 12/10/07
This house will bring in $800 easy. My duplex 2 blocks away brings 750 for the one bedroom upper and 900 for the lower.
I know I could get more for the upper. When I first posted it I got a call with in 30 minutes and had 3 couples at the door the next day that wanted it.
you mean to tell me that you can buy houses and rent them for twice the mortgage payment?
those are the numbers i think i am seeing?
that is insane, can i move up there and be your new partner/long lost brother?
there has to be a catch, that is too good to be true, it cannot go on like that, somethings gotta give.
Not usually. This is why i've been an emotional wreck the last two days. This a diamond in the rough. We were finally able to put in an offer but I suspect we wont get it. We bid 4 grand over list cause there were multiple bids 5 hours after I saw it. The bank cut off at 5:30 today. My broker talked them into waiting a few more minutes so we could get our bid in.
I have a feeling it will go for about 45k. The sev is 44k and they were asking 34900.
The funny thing, is that I almost didnt go see this house. MLS idnt have a picture and that usually is for a reason. The house was one block from another I was previewing and I couldnt believe what I saw. This place is almost move-in ready. I can get a tenant in there while spending less than a grand.
Most of the houses i've ever bought required months of work. This one would be a real treat.
Edited 6/13/2008 9:26 pm ET by MSA1
Edited 6/13/2008 9:47 pm ET by MSA1
Tim have you ever sold a house at auction?
Seems like that would keep you away from "first time home buyers"
The Buyer would be very motivated to close the deal in 30 days
(or they would lose their earnest money/deposit)
Most Buyers would never have the home inspected (since it has to be done before the auction)
This would save you some headaches and arguing about repairs recommended by the inspector
That alone is worth something
You can set your price - you don't have to sell it to the highest bidder
Thats probably a great subject for you and I.
Its a fact that Ive been thinking about just that for the last two months. Ive thought I could do as well my self !
4 months to sell the house at a cost to me @700.00 per month .
The house sold for 90 grand but their loan was for 100 and somthin.
I got 85 grand outta the deal.
I bought a book Ive still got thats, How to Sell Your Home In Five Days.
I read it but its been a while .
You advertize the auction in the paper saying you will start the bidding on the house above say for 60,000 opening bid. Thats supposed to generate interrrest open houses will not draw right now. You have the house open all week Monday through Saturday. You run radio ads as well. The house sells by silent auction Sunday . You get your list of bidders on a sheet . After the bid is opened you call round robin. The bid is now 65,500. What is your bid?
Ive always wondered about that book . Im an auctioneer as well and have no problem conducting an open sale but people do have a problem with open sales in that they cant make up their mind that fast and its final. An open sale is not a good way to sell retail although Ive seen a bunch sell at retail prices.
What say you ?
Tim
Tim a house similar to mine was scheduled for auction about a month agoI wasn't paying attention and when I drove by there a couple of days ago a realtors sign is in the yard so apparently it didn't bring enough at auction and the seller declined the saleI'm looking at doing something called a "silent auction" I think that's what you call itI have a friend who sold a fixer upper this way and I have called her twice today to get the details on how this works.She'll call me back tomorrowThe way she did it was to advertise that she was selling a house for the best offer on such and such a dateShe had newspaper ads and signs on the street cornersThe day of the sale was a sunday and she had an open house and I went to it.I think she looked at all the offers and then didn't sell it (even though she had promised to sell it to the highest bidder)But I need to find out more before I say too much
Edited 6/19/2008 10:52 pm by mrfixitusa
It sounds like the same book.
Its a phone auction actually with open houses before hand.
She doesnt have to sell it .
In her book she says people would ask her if she was really gonna sell it ? So evidently theres a lot of naysayers.
Tim
Edited 6/20/2008 9:50 am by Mooney
hold the bus! your a auctioneer? licensed? or do you have to be in ar?
if you can sell at auction your own property ,i think thats how you ought to go.
i auction a house 1.5 years ago heres how it went i gave 113 for it and it turned out to be a problem child with water in the basement,i missed it. so if i put it on the market i have to tell everyone just what the deal is,but auction i put on the condition report water below grade? yes.no more explaining.
auction day comes it brings 107,nets me 99.8 yea that sucks but my problems gone and i could of spent more and still had water. now at first thought it looks like i sold under market[i did]. but the buyer bought it to make money on it. so it sat on the market till about 6 weeks ago. so he had holding cost for 16 months [10k?],plus closing cost [he borrowed 109] . last i knew he had it listed for 124k,lets say he sold for 121 which would be pretty good offer on a stale house. so he had 119k in it plus he didn't get any real estate comm so he made a whooping 2k. big deal i'm glad i left when i did and went on down the street and put the money in a better house with no water.
what i'm saying with all this is,auction your going to sell maybe 10-15% under market but your saving 6% real estate fee right off the bat and your turning your money quick.no inspections,no contingincies nothing.
if i had a auctioneer license like you i would be advertising to sell peoples houses,worst case i make some good money for 10 hours work,best case your in the spot that if it's a steal you buy it.[well your wife does]
if you look up mccurdy auction.com here in wichita,this guy is a class act,there are some sat that he sells a house every hour from 10am till 7pm that night just going from location to location. the day he sold mine he sold 6 houses that day. each house was over a 100k so look at that number 6k x 6 =36k in comish in one sat. lonnie never even came out to my house until 30 minutes before the sale. what a bussiness larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I have been an auctioneer before it was necesary to be licensed. I never grandfathered in. I quit . I can still do it of course and I can sell anything thats mine.
I agree .
Tim