Real Estate

Assuming, the property is in decent shape and the tenants are paying near current market rent, I'd offer $1000-3000 more than asking price.

It seems that there is more and more talk about how any future housing bubble will be prevented. Bankers and monetary officials are discussing using interest rates and other means to prevent this in the future.

I don't know about you, but this doesn't sound like a good thing.

Here is one article discussing this.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072603338_2.html?sid=ST2010072605862

I know some of you are only doing month to month leases for flexibility and control. But what do you do if you have a really good prospective tenant who "needs" a longer term? Perhaps they just left their last rental early because it was sold or foreclosed on. Do you make exceptions to your month to month leases?

We have a house that needed the vinyl siding cleaned up. Had a guy powerwash it and the next day it looks hazy. I can almost wipe the haze off with my finger but not really sure what it is I'm wiping up? Anyone ever powerwashed vinyl siding, tips, ideas, maybe just soap before washing next time? Thanks

Thanks for the tips Bill.

Great thanks. I will of course include some protections, but I will make it far more concise and easier to understand.

As for the legal description, what do you recommend using? Would address & county PIN number work? I don't want to mess this up since I know that could invalidate the deal

Vacationing....

However, check back with me in a couple of months or so....

Happy Property Hunting...!!

Originally posted by Sean H.I have found J Scott's blog already and it is indeed awesome. He shares everything there is to share about his rehab business. I also purchased his business plans for flipping and multi-unit properties, probably the best $15 you could spend if you're trying to jump start a real estate business.


Robert, Sean -

First, thanks for the kind words...other than the business plans (which I only charge for because I end up spending so much time answering follow-up emails and questions), I don't make any money off the blog, so getting nice feedback like that really keeps me going...

I plan to start writing a regular newsletter that goes into more detail about the systems I use and how to scale (which will address some of your questions). It will be free, so feel free to sign up on the blog.

Anyway, to partly answer your original question (which I didn't see until today, sorry), the way we have evolved over the past couple years is that we keep a spreadsheet of all the materials we might ever use, most of which come from Home Depot. As you suggested, the spreadsheet is broken up into lower-end and middle-end rehab materials (we don't do anything high-end yet), with Home Depot SKU numbers next to each.

At the beginning of each project (about two days before we want all our materials), my project manager or myself goes down the spreadsheet, and marks off how many of each item we need for the project. Once we've done inventory at the house to determine what we need, it takes about 5 minutes to fill out the spreadsheet.

I take that spreadsheet and fax it to a guy at the Home Depot Contractors Desk that I work with regularly. He submits it to get a bid (if you buy more than $2500 at a time at HD, they'll submit the order to corporate for a bid that's generally 10-20% off retail). He calls me a couple hours later to give me the price.

I'll negotiate over the phone a little, and then when we agree, I give him the property address and my HD Credit Card info. He'll charge the card, and they'll deliver the items right to the house. Either my property manager or a trusted contractor will verify the inventory, sign the paperwork, and we're done.

This is how we do it, and it makes things very easy...

Putting together the spreadsheet took a while, but it was a great opportunity to spend about 20 hours in HD getting familiar with the prices and the various materials available. In fact, when I started rehabbing, I had absolutely no construction experience, so this was my first major lesson.

Of course, there will be materials that we have to get from other suppliers; in some cases, we can do something similar and in some cases we have to go to the stores to pick things out by hand. But, these tend to be the exceptions.

As for building materials (paint, lumber, sheetrock, siding, etc), we have our contractors supply all of that. We only purchase the finishing materials. This makes things a lot easier, even if there is a tiny markup in price (it's worth the tradeoff in my mind).

Originally posted by Bryan Hancock... Foreclosures at the courthouse aren't worth bidding on.

...

Bryan,
Is this supposed to be a blanket statement, or just certain areas in TX where you are at?

The VAST MAJORITY of foreclosures at the courthouse certainly aren't worth bidding on, but there are those very few that turn out to be worthwhile IMO.

One thing to consider is the time it can take to just do one short sale deal. Plus you must have the home owner, lender and creditors on your side to make this deal work. In the end it can take up to one year to do 1 shor sale deal. Bank REOs are fast and you get them with a clean title. I have a video on my blog that explains this check it out if you like please leave a comment: http://ultimatebulkreo.com/bulk-reo-sweet-spot/

We have been talking a new process through with our attorney for months now and there are a ton of good questions to go over. One of the main points is the question about what happens if the seller is up against foreclosure. We have a tidy little letter that we send certified mail, read receipt requested to the servicer and 30 days later they object. The problem is that the seller goes to auction before that...so it seems problematic.

There is also the question of whether or not putting the lender on notice actually serves any tangible benefit. The lender should technically still retain the right to call the note on sale even if they are informed. Does anyone know of any case law on this subject?

It seems the right process kind of depends on the situation of the seller. If there is ample time to inform the lender and get consent then that seems like the prudent thing to do. Does the lender generally send you something in writing saying that things are okay?

If the seller is up against the gun it seems that disguising things may be the right course of action rather than goofing with the sevicer and/or the assumption department. The seller would just have to sign the standard acknowledgement paperwork which could recite the fact that we are not informing the lender due to time constraints.

Thoughts?

Originally posted by Bill PattersonJason, I stand corrected! Thanks for the very good information that I was not aware of. I reviewed the website and information. It seems that there is a good program available.


Thanks Bill...

This was just created back in 2005 (credit to George W), and I have a feeling a lot of smaller employers don't know about it.

I forgot to mention it above, but it's also FREE...

Rich
I see many of your posts either mention "Cancun" or "Cruise". Are you bragging?

"Ammon said: I do not brag on my own strength or my own wisdom. My joy is full. My heart overflows with joy ... I do not brag about myself; I boast of God...."

Just yanking your chain a bit there Rich!! :D

I will be keeping Texas on my radar for the next few years, it should be a good place to invest!

Hi No Name,

No you don't have to live near a partner, however it really depends on what you're willing to do and not do. If negotiations is really the thing you don't want to do, then there are plenty of people out there that that's ALL they do. They would certianly be willing to work with you and negotiate, but if you're talking about meeting with the homeowners, collecting info etc, that's a bit harder. I've aligned myself with some agents and that has worked out well. They don't necessarily live near me but live in the radius of where I'm comfortable investing so they meet with homeowners and I offer up contracts. They take pictures do comps, etc.

Make a list of what you're willing and not willing to do and that will give you the answer of whether or not you need a partner close by or not.

GOOD LUCK!

Hi Leland! Unfortunately we do not provide funding in Florida right now. You can view our page for the states we serve in:
[LINK REMOVED]

I'm still looking. Thanks!

If you aren't an agent then legally you wont have to worry about the other disclosures. Yes you can cross that section off and mark as-is sale.

I would ask the seller if they have a sellers disclosure alerting you to any problems with the house that they are aware of. You are the buyer so you are the one that needs to know about the house. If you ask, they must provide it, if you don't you are assuming the risk.

I think honesty is the best policy. Being new to the game is NOTHING to be ashamed of plus it will lower the expectation of the seller. Remember this is a buyers market. You might be the sellers last chance to make something happen. They need you more than you need them so they shouldn't be quick to toss you aside just because you aren't a millionaire real estate mogul. I really believe if you are confident with yourself and respectful of the buyer, you will be able to win them to your side and then whatever you do will be fine because then you are directing the action.

The other thing you may consider if you really think experience is key is bring someone who is experienced with you. You may have to give up some of the deal but you will have your experience. How valuable is experience to you?

Todd,

I am not sure if you heard or read something about UCC-1 filing and their supposed benefits to delay creditors but I can tell you to tread carefully. A UCC-1 form, also known as a Financial Statement, is used in the commercial context to secure a lender's interest in a borrower's personal property as collateral for an extension of credit. (This also applies to securing a land trust interest or an LLC interest but not the underlying assets of the entity)

A UCC-1 form is typically filed with the state's Secretary of State Office and serves to put others on notice that the lender has a secured interest in the items listed on the form.

A UCC covers "Personal property" meaning non-real property used in operating a business, such as equipment, furniture, and inventory. On a few occasions a client will mistakenly believe that a UCC filing will cover real estate because a box on their form has a place to enter a "real estate description". This description is typically used for timber liens or for general fixture filings that cover an entire parcel of real estate.

Basically, the UCC-1 form serves as a public notice of a lender's interest in the assets for a business. Don't fall into any pitchman's trap about some obscure case or Public law argument lest you end up like Wesely Snipes. Strawman type transaction do not hold up in court and can only lead to problems down the road.