i don’t think it is the time to buy, but i did find a HUD forclosure that if i want i will have to get the offer in today.
the numbers are probably 32,000 to get it. it might go for more, but i doubt it. got to look inside yesterday and it needs gutting, the stench of animal
was pretty bad, couple of walls need to be moved, kitchen needs completely redone, it will need some attention to plumbing, heat and air, and bathrooms, as well as moisture in basement. exterior is ok for the most part, might need a few things and will definitely need a new deck/back porch.
i figure for $40,000 i can make it nice nice nice, but it is in a neighborhood right now where nice nice nice might go for $70,000 – $75,000.
this is a no-brainer in this market is it not? unless you really want to live there you don’t want it because the numbers just don’t add up. i am money ahead to just go to a wages job and make a mortagage on one thats done.
the thing that kills me is that i look all the time, i find one that might be a bargain, but on closer inspection it needs so much to make it right that in this market it won’t make money and might be stuck quite a while. should rent easy for $500 – $600, which is about what the payment would be so no negative cash flow, but the risk of real estate right now.
what say you?
Replies
Don't buy till your lowball offer proves you've squeezed them so much they feel insulted, hurt, complain, shout you down and then agree to sell.
be jewish bloods runs in us all
I was gonna contribute, then I read the fine print.
PAHS works. Bury it.
The knife is still falling, try catching it at your own risk. I'd wait until Time and Newsweek magazines both have front covers about the calamity in real estate and use that as a buy signal.
I did not buy, mind you this was a HUD foreclosure listing, which means as is where is. If you put in a bid and they accept it you are committed.
I feel bad for putting so much time and energy into looking for just such a deal and then when I find one I don't pull the trigger, largely because of the uncertainty in real estate these days.
this house could be fixed on the cheap, and rented or sold. realtor even suggested converting to duplex, it ought to bring at least $700 per month rent as a duplex, but you would probably have $70,000 invested, and what do you do if values go down even further?
Sad that I found a deal that in today's market is "no deal".
bid 20k for it!
I did not buy, mind you this was a HUD foreclosure listing, which means as is where is. If you put in a bid and they accept it you are committed.
According to your post in the "Indiana sues Countrywide" thread, I didnt think you were commited to anything.
see thats what you get for thinking, i am definitely committed to making money.
do try to avoid losing money every chance i get, and reserve the right to rethink my position on an endeavor i might attempt in order to make money, that turns out to lose money.
my bank does the same thing, how about your bank, how do they feel about losing money?
Okay, I just bought it big time on three of my properties with the new tax adjustment. I have equity though, should I bail or hold?
What new tax adjustment ?
Michigan has a "Homestead exemption" on our property tax.
What that means is that if you buy a house that some old lady owned since dirt was invented, the taxes could very well only be about $1000/ year.
When the house is sold and the new buyer (especially a non owner occupied), you can almost hear the drool hitting the floor at the Assessors office cause now they have a pay day.
My duplex for example had a tax bill last year of about $1300. Since I bought it the summer tax bill this year is $5300.
Some nice system, eh?
Escrow accounts are based on last years taxes so between the three houses I bought last year, i'm about $8100 short.
Edited 7/3/2008 10:51 pm ET by MSA1
well whatever you do don't walk away from your commitments, trust me you will never hear the end of it in here if you do, the ethics police are out in force.
:>)
didn't you realize that before you got into the rental prop bus?
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Yeah, I did. Its just that right now i'm not in the position I was planning to be. Actually as long as I cover the short I should be okay.
Mark, MI also has a cap on appreciation tied to some inflation index. I think it was the Headlee amendment that created that system. In that system, the house has been undertaxed if the homeowner owned it for a long time. When the house sells, it opens up the assessment and sets a new value based on the actual value at the time you purchased it. So, basically, you got hit with the double whammy: you lost the homestead discount and your property was also opened up to make up for lost assessments capped by the Headless amendment. Those are the pitfalls of the landlording biz and the calculations have to factor those big jumps in when you are making the offer. I know I'm not telling you anything you don't know though, LOL!But....this is another reason why a lease option becomes a valuable tool. If you had executed a lease option contract, instead of the transfer of the deed, you could have controlled the property and left the Headlee cap in place. In theory, you could enter into a very long rental agreement but in reality, they would look at that as a transfer of interests in the property and could theoretically hit you for back taxes when it was discovered. I think a practical limit would be a five year lease option but that is just a wild guess gleaned from reading things and my memory should not be trusted. But...look at the 5 year lease option numbers. The tax was 1300 with the homestead. It would probably be 2000 without it. If you left the deed in escrow and just leased it, you would not open the cap and you would save 3300 per year. That represents $275 per month cashflow that you are giving away because you opted for the "safer" form of control. Not every situation would be suitable for a lease option. You wouldn't want to buy a fixer and dump 30k into someone else's house even if you had the option, unless you had a lock tight option and were sure they couldn't encumber the property in any way. That's not always possible because an IRS lien could strip you of your 30k... The lease option would work perfectly on a house that didn't need any fixing. For a minimal amount down you could take over the payments, or make payments to someone that owns it outright. You would have control, and be able to sublease and keep the tax cap in place. There is little risk on a "nice" house that you get control of and lease out with a positive cashflow. You have an expert in Lease Options living in Lake Orion. You might do a little research on Wendy Patton to see if she's still doing business. I'm sure she is. She may have graduated from actually being out there doing the deals to selling training packages though. I met her before she was "famous" and was able to attend a weekend seminar for under $100. She has a great program and it makes sense for both the buyers and sellers and it will work in any neighborhood. She made tons of money in Oxford and Lake Orion. Bob's next test date: 12/10/07
you sir are a wonderful source of information. great presentation, just when the subject is up you provide the lesson. thank you.
Don't give me too much praise Segundo. I want my current crop of hats to fit. You have been looking for ways to invest in properties and raise investment capital. Lease options might be one of the easiest ways into the business. If you are willing to be a landlord, this might be the best way to do it. Wendy used to do all her deals with investors. She never risked any of her money in any deal. Her program worked like this: She was the expert in the real estate biz. The investor got to use ALL of their money and take 50% of the gain. Sometimes the gain would be made in option money. Sometimes the gain would be made in monthly rent. Sometimes the gain would be made in flipping the property. Each property is useful in one way or another. Wendy's program made sense for investors that wanted to get into the real estate business but didn't have the confidence or time. All they had was money, credit or both. It didn't matter, Wendy would put it to work and provide a safe entry into the biz. Bob's next test date: 12/10/07
A couple of things, first the houses I bought were mostly foreclosures and most were "hit". That puts the lease option out of the deal.
I did know the taxes would go up but as far as my duplex, 500%!? Come on.
As long as I come up with the money to bring me current i'll still keep my head above water on the rentals and for now thats good enough.
As far as the time being, i'm feverishly working on paying down my debt so I can start buying again.
I'll get where I have to go if it kills me. I have the drive and I wont quit, never never never!
I'm actually lucky. I could see where this situation would sink some people but I think i'll get through.
They say that alot of successful people lose businesses before they hit. Maybe i'm lucky and i've learned enough that this is as close to loss as I come.
That is not to say that I have all the answers, but that i'm open to learning where ever I can.
What do you mean...most were "hit"? Bob's next test date: 12/10/07
Just wrecks. I bought one from an original owner (from 1937). The roof got so bad that we had to drywall most of the ceilings, new kitchen, new wiring (I dont allow K&T), new furnace, new bath.
I know your response to this is that I bought the wrong house. But the way I look at it, I paid 60k, I out in 30k an its worth 160k (as appraised last January).
I dont think thats too bad.
I don't have anything against buying fixers. I just didn't understand the word "hits". Whats the real appraisal worth if you had to sell in three months or less? 120k? Thats still a good, not great, deal. Bob's next test date: 12/10/07
Actually I think Imay do a little better than 120k if I had a fire sale. The house is really nice inside, all new mechanicals and sits on a 300' deep lot. Maaaybeee $135/140?
I've been meaning to ask...How's your back? I've made some susbstantial progress on mine in the last two weeks. I've been dilligently doing my Pain Free exercises and doing some posture work from a new book I'm reading. I was amazed to be walking around the mall a couple days ago and mentioned to my wife that I couldn't remember the last time I could walk completly pain free, without drugs of some sort. My back started hurting in the 70's and has hurt every since but all of a sudden I am finding numerous positions without any pain. It actually scares me a little bit. Bob's next test date: 12/10/07
I think i'm about as good as i'm gonna get which actually is pretty good. I walk a little funny in the morning but for the most part i'm fine now.
I still work hard, I just work a little more carefully.
I was at the chiro last Saturday. I'd been going every two months, but this time I didnt reschedule, I feel as good going in as I do going out.
Glad to hear you're doing a little better yourself. Didnt realize yours still hurt so much. I think the last time you brought it up you had quit going to a chiro so I figured you were better before I was.
Edited 7/5/2008 10:12 pm ET by MSA1
The chiro wasn't really helping me with this latest herniation. Jim might have helped alleviate some of the pain when I was at my worst but the only thing that helped me was the Pain Free e-cises. I had been going to the chiro every day for about a week, then every other day for 3 weeks with no sign of improvement. I think I was on week 6 and contemplating surgery. I finally went for an MRI to decide whether to go under the knife or not. My timing was impeccable though. I had just started doing the exercises a couple days before I had the MRI scheduled. Without that slight improvement, I could never had laid still enough for the MRI. I just barely got through it. I was on 2400 IB and 2400 Tylenol and was keeping the times on a piece of paper. I'd force myself to wait for the time to take the next dose. It was hell and I'd probably jump off a bridge rather than continue like that for any period of time. Within a week or ten days, I was able to start walking. My first attempt at a walk outside was a disaster. I got to the middle of the next door neighbors house (about 50') and decided that I better turn around or I'd get stuck somewhere. I barely made it back home. Within two weeks I was able to start walking. 15 minutes at first. Then 30. I made rapid gains then but the herniation and general pain continued. I got lazy and quit the e-cises and just carried on like I had for years with the pain. A couple weeks ago, I saw a book in the Costco guide about posture and back pain. I read it and started her simple program. I also decided to do the Pain Free exercises daily as I should have. Its amazing. I don't know which is helping me more but I don't care. I actually went to the driving range last week and hit a bucket. I really believe that I'm going to suck that goop back in and stop all the numbness and pain! It's almost all gone in less than two weeks!The one book has given me a way to lay in bed at night and decompress. This speeds healing. There are methods for sitting that decompresses. Now you got me fired up...I'm going to read the next chapter LOL Bob's next test date: 12/10/07
Edited 7/5/2008 10:28 pm by Jim_Allen
Must be some book. I had my second MRI a year after the first. When we got the results the large piece of disc that was in my spinal cord cavity had all but worn away.
There is / was still a small piece sticking out just enough to remind me about it once in awhile, like I said usually in the morning depending on how I slept or if I do something stupid like sit on the couch too long.
The biggest thing i learned from the whole ordeal was that doctors dont necessarily know everything. They would tell me "take it easy", "dont work too hard", "avoid lifting".
It didnt take long to realize that I always felt worse on Monday after a weekend of "taking it easy".
I decided to just carry on business as usual as best as I could and soon I felt alot better.
It didnt take long to realize that I always felt worse on Monday after a weekend of "taking it easy".
I decided to just carry on business as usual as best as I could and soon I felt alot better.
same here....
and yur body will remind ya when ya been pushing it a bit too much...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
curious to know while we are on the subject of backs if anyone has ever tried that new traction thing i have seen some chiropractors advertise, something to do with being based on zero gravity in space and how that affected the backs of the astronauts.
i too have noticed that inactivity (rest) doesn't seem to help, and that once loosened up i am able to work my back pretty hard still. my thinking is that as long as i can get it to loosen and it doesn't hurt while i am working but after as muscles are cooled and tight it is muscle issues and not disc issues.
i think there is a certain bliss in ignorance, i really don't want to know how bad it is or what i shouldn't be doing, but i wouldn't mind doing preventative measures for back health.
"i think there is a certain bliss in ignorance, i really don't want to know how bad it is or what i shouldn't be doing, but i wouldn't mind doing preventative measures for back health."I'd probably suggest that you don't remain ignorant because the "fix" is so simple. Esther Gokhale is the author of the book called "8 Steps to a Pain-Free Back". In that book, she details how to sit, stand, lie on your back, lie on your side, walk etc. Her entire program to a healthy back is essentially to train you to recognize why your posture is contributing to your "tight" muscles. Her "cure" involves no exercises, no special treatments, no doctors, no medicines...NONE, NADA, ZERO! It's all about finding the natural position that our bodies intend us to have. She uses pictures from all over the world to prove that people can live into their old age without back pain, even if they are bent over all day doing laborious chores or carrying huge loads on their heads. It is an eyeopening read for anyone that has joint pain in any party of their body. The author of Pain Free, Peter Egoscue, offers exercises designed to stop the wrong muscles from doing the job, which result in atrophy of the correct muscles. In my case, I was keeping my self erect using the wrong muscles in my back and buttocks and legs. I entered into his simple program that wakens up the dead muscles and tones them with simple pillow squeezing exercises. All of a sudden, the proper muscles are strong enough for me to do simple things like bend over and brush my teeth without drooling everything down onto my shirt and floor. I used to have to brace myself with my hand. Now I feel the muscles inside my groin holding me. In your case, it sounds like you have the right muscles doing most of the work but your posture probably is causing you "tight" muscles. You might not need the remedial therapy that I needed to get started toward a "normal" life but remember, I worked 25 years with the same symptoms you are talking about...once loose, I could work all day. My bane was bending over to pick things up and I now know that I was simply not hip-hinging when I bent over. I now hip hinge to lift myself out of a chair and can do so with no pain whatsoever. I can't remember being able to do that in my lifetime. You are right when you speak of your muscles causing the pain and not the discs. Egoscue explains all that in his book. It's not the joints hurting, it's the muscles that control the joints that are screaming for relief. Bob's next test date: 12/10/07
I think you're onto something about the muscles. When I was in therapy they gave be back muscle and abdomenal exercises to do. they suggested (like you) that it a lack of support from the muscles that puts additional strain on the back.
>>"and then when I find one I don't pull the trigger,....."Buying as an investment -- either as a rental, or as a flip -- still follows the same rules as always. Every penny that you can make, will be made on the day that you formulate your buying bid.And if the numbers don't add up, don't buy.And in my experience, the numbers won't add up in the vast majority of the cases.
Politics is the antithesis of problem solving.
just lowball the he l l outa it
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
bid 20k for it!
I bid frammer52's $20K!
<G>
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
I wonder if he knows that after the time period for bids is over, then you can negotiate.
good point..
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Do we hear $21K?
Anybody?
Going once...twice....
.
"Thank goodness for the Democrats! If you are terminally unemployable, enjoy living off of govt welfare and feel you owe society nothing you're in luck: there is a donkey waiting for you."
did frammer52 just buy a house?
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
He had the highest bid so yeah..
.
"Thank goodness for the Democrats! If you are terminally unemployable, enjoy living off of govt welfare and feel you owe society nothing you're in luck: there is a donkey waiting for you."
I am shooting to buy some houses in Sept or Oct., investments only.
Paying cash, at least for the first 2. Then we will see.
I don't buy HUD houses as they require most to be occupied by the buyer.
good luck and keep us posted.
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
some of the guys i know made it big on there timing, If you can get it fix it and be even your ok, If things do pick up you wont be getting this kinda deal.
Do a few like this take a risk, things pick up your a genius.
Do nothing your a shouda couda guy like me;]