Real Estate Investing Forums

Real Estate Investing => Bird Dogs, Wholesaling => Topic started by: MamaKaranja on May 20, 2009, 10:13:44 am

Title: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on May 20, 2009, 10:13:44 am
So my neighbour has his house 4 sale for 229 days...asking  $135K....looks like they have to sale with contingencies....would I be low-balling them  @ these number's?

ARV - $8/sq ft x 1426 sq ft = $ 11,408
Selling  @                              $ 135,000
                                             --------------
                                             $ 146,408  x 70%= $102,485.60 MOA

Would I be insuling them with a Bid  @ $99K. Is this worth the chase?
I plan of flippng it for a quick profit. :cool

Home is good shape,great curb appeal ,even for a home 119 years old. Comps come in @ $190K. Great neighbourhood,with great private colleges around (The Obama's were here woeing us for votes late Oct 08') :deal / not ??

Rentals go for $800-$1100/month.




Title: Re: Neighbours home on Market 4 over 700 day's.How much do I offer them?
Post by: MamaKaranja on May 20, 2009, 10:26:48 am
Been on market for about 2 years now....gues it's been re-listed a hundred times.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: ljcramerproperties on May 20, 2009, 12:00:35 pm
Mama,
What I suggest you do is find out, if you can, what the original listing price was and look at how much lower it has come down in 2 years. See how motivated they are to sell. My guess is that they are not that motivated if they are still in but you never know. Go by and see if they will let you see the place inside and take a few pictures. Let them know that you buy houses and you might want to make an offer on theirs if the price is right.

Let us know how you do!
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on May 20, 2009, 12:49:54 pm
ljcramerproperties ,

It's an MLS listing and I see the pictures posted on there...just don't know what their game plan is .....won't know if I don't ask right?.
I've seen les than 5 people come for a showing and nothing after that....eldery couple ,laid back and not very friendly....I'll strick a conversation with them though.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: ljcramerproperties on May 31, 2009, 06:17:37 pm
hey Mamakaranja,
were you able to talk to the neighbors?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 02, 2009, 10:52:51 pm
made small talk with them and it seems like they are not in a hurry to go anywhere....they understand the market is slow and they are loyal to the realtor who sold them the house 100 years ago....so they will stick by her until it happens for them....oh well.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 08:31:12 am
"""ARV - $8/sq ft x 1426 sq ft = $ 11,408
Selling  @                              $ 135,000
                                             --------------
                                             $ 146,408  x 70%= $102,485.60 MOA"""

Your numbers look a little wacked out to me so it is hard to give you an answer what it is worth.

What is the after repair value of the house (ARV)? Surely the value is not going to be $11,408 when it's fixed up.
What are the costs to repair the house?
What are they selling it at now?


And if you are basing the value on it's rental value you can not give a spread of $800-$1,100 per month. You have to be exact or this information is useless.


"""Would I be insuling them with a Bid  @ $99K."""

Also, investors are not concerned with insulting someone. It's value is its value and your offer will be a fair investment property offer. Close to the same that any intelligent investor would offer.


Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 12:35:16 pm
The comps reflect an average of $220 K ( most recently sold properties ) Most of them have less sq ft than the house on sale.

My  calculations .....needs little paint job.
My understanding is that we should calculate  $8/sq ft x 1426 = $$11,408

MOA = 70% X $146,408 - repair cost - assignment fee

My estimation : $102,485.60 - $ 11,408 = $ 91,077.60

My asignment fee should be 10% of MOA = $9 K.

Is this still wacked out ?

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 12:47:41 pm
Forgot to subtract my fee :

So the amount I need to buy this thing is $ 91,077.60 -$ 9k = $82 K
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 02:06:48 pm
If you are confident that the ARV is $220K than
220K - 30% = $154,000 (70% of the 220K)
$154K - $11,408 repairs = $142,592  (BTW, those painting costs are high but that's Ok because the investor will probably want to do a few other things to make it sell quickly)

$142,592 is your maximum allowable offer, now subtract what you want to make from that.

Now, you are basing this whole thing on 70% of the after repair value. MAO is the Maximum Allowable Offer that an investor should pay. Keep in mind the word Maximum. Most investors are doing better than this, especially in this down market. That 70% is at the upper edge that an investor should pay. Not a dime more than that. They won't be making that whole 30%. We have holding costs and most of us figure in 6 to 9 months of them for a worst case scenario during this poor economy. 



Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 03:55:03 pm
I may be too ambitious in this deal....this is a twin and the house attached to it is valued at $144k...still the  comps give average of $ 220k....townhouses directly across from it are valued @163k averge.

so the numbers should still be as you suggest.
 Does this alter the figures...flipping is the exit strategy here,so holding cost does not apply....would walk away if it doesn't pan out as planed.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 04:08:12 pm
Let me make sure that I am clear.

What are you doing with the property? Wholesaling it to an investor as option 1 and fixing it up and flipping it yourself as option 2? The numbers are different based on what you are going to do with it. But regardless, if you buy it as a wholesaler would, you will benefit from the wholesale and the flip.

The house that you plan to buy will have an ARV of $220, right? The half of the twin that you plan to buy will be worth that?

If an investor was to purchase this property from you, what they are buying will be worth $220 when they fix it up. Not the whole house but the portion of the twin that they are buying, right? You are not talking about theirs and the one next door combined right?

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 04:13:15 pm
The ARV ,as determined by the comps reflect $220k....Realtor.com shows the other twin @ $144k value.
I am not factoring in the other twin at all.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 04:16:49 pm
So this is basically a house that shares a wall and one side is worth $220 and the other is worth $144. Right?

If this is the case I would do a little more investigation. This freaks me out a little. I would get down to the bottom of exactly why one side of a house is worth significantly more than the other.

My offers are always based on a worst case scenario.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 04:24:36 pm
am missing something....The asking price is $135 k after being on the market for 243 days to date....My ARV is what I figured based on the 5 most recently sold homes around it ,the past 6 months....am I not calculating this the right way?....Is this not the way to do it?....Also plese consider the other twins across the street @ $163k,built in 2001....the house am looking @ is circa 1860....am i missing something?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 04:30:40 pm
The asking price is $135 k after being on the market for 243 days to date....My ARV is what I figured based on the 5 most recently sold homes around it ,the past 6 months....am I not calculating this the right way?....Is this not the way to do it?....Also plese consider the other twins across the street @ $163k,built in 2001....the house am looking @ is circa 1860....am i missing something?

I am just trying to figure out if you are calculating the ARV correctly. I don't know how it would be worth 220K when fixed up and the asking price is 135K and all it needs is a little paint. Also the ones across the street are valued at 163K. Why is your Circa 1860 worth so much more fixed up than the ones across the street or the one next door?

Is your market booming unlike the rest of the country? There is something fishy here. Either I am not understanding something correctly or you are determining your ARV incorrectly.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 04:32:58 pm
Are the recent sales you are basing your figures on all comparable to this house you plan to put an offer on? Also twins? Within a few blocks?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 04:37:54 pm
The comps are from homes close to circa 1830,most of them are SR ,with large sq ft,....am sure am not calculating the ARV correctly...
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 04:51:15 pm
You need to get the value of that house based on other houses that are within the same area, are also twin houses and have sold recently but definitely not during the bubble. Something that is comparable in square feet would be good.

Check all of the property closely around that house. I go to the local GIS and look at every single property around it, finding the most recent sales. Be very conservative with your ARV as it needs to be accurate. This is the part that you spend some time with ensuring you are correct.

Then come back and report what you have found and we will tell you what to offer. I am buying at 50% of the ARV in this market. I see lots of wholesalers going for 65%. The thing is I also have lots of wholesalers contact me locally with their 65% deals that they can't sell.

You will need to put in many offers on many properties before you get a deal.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 05:41:10 pm
Okay..this is what I found out..most recently sold comps /similar sq ft and not during the bubble....ARV is $161 k.

Then the figures would change to:

MOA : $161K X 50%- REPAIR COST-FEE = $?
           $81,000.00- ( $11,408 + $ 16K) = $?
           $81,000.00- $ 27,408k= $53,592.

This is not an REO....been on the market  for 243 days....it would be a miracle to put under contract....or not?

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 03, 2009, 07:10:01 pm
You are now figuring this correctly.

The key problem here is the fact that it is on MLS. Read this thread to understand where the real deals are and why they aren't on MLS. Especially for a wholesaler.
http://www.reiclub.com/forums/index.php/topic,43179.0.html

That's OK though because you need practice working up the numbers on deals. You need to run the numbers on many properties so you learn to do this quickly and accurately. I learned on MLS and then jumped in the game where the deals really are for my first property. After a while you will get a good feel for it and will know by instinct about how much a house is worth in various areas that you concentrate on.

When I make an offer to someone I justify the cost by overestimated repairs needed. As if you would be using a licensed contractor to do the work where most investors would use a couple of jacklegs that would charge 1/3rd of the price.

I go through the house with the homeowner and write down every single little thing I find making sure that they realize that I noticed it. They often need to be knocked off their high horse and nicely smacked back into reality.

I use various techniques depending on the house. Lets say that it is a vacant house that has broken windows, and extensive water damage from the holes in the roof, peeling paint inside etc. What's a sheet of drywall cost? Not much. Cheap and easy repairs. So I act like a bomb must have gone off in that house and that this house is a little over my head and I look for these types of properties. My plans are to sink 20K into it on a rehab, in reality it is exactly what I look for. I tell them that the house likely needs to be torn down and ask them what the land is worth. Ok, so the land is worth 15K and it is going to cost me 10K to knock it down and prepare it so another house can be built. So it's value is 5K. I then give them the 5K offer.

There is uncomfortable silence and they say that they bought the house to rehab it 10 years ago and paid 15K and think it is worth 20. I ask them what they have done to it to increase the value. Well, they respond that they cut a few trees down and gutted a couple of rooms. I explain to them that gutting a room makes it less valuable. Now whoever buys it will have to pay all of that money to fix it. Most investors just cut out the damaged area only and repair it. And the house has been deteriorating since. I counter offer 10K and tell them that's all I can do. I tell them I am now 5K in the hole and I am in this business to make money, not loose it. I will now have to come down hard on my guys that help me rehab and make them charge me less if I can to recoup this lost money. I basically act like a real tight a** with my money and that they are the ones pushing me into the corner. All I'm trying to do is buy the house at a fair price.

Maybe you are talking to the executor or executee of an estate. The relative died and all of the family members live out of state. They don't have any emotional ties to the house and don't know it's value. You tell them how the house has deteriorated (they usually are as the elderly are unable to take care of them). Go through a little story. Possibly find some houses on GIS around it that could have sold years ago for a low price and tell them that one a couple of houses down last sold for 25K. The one up the road sold for $28K (in 1998). Yes, they could have been bombed out when they sold for that price but that doesn't matter. Who cares what the year was. That's not the point in this particular situation. Maybe you think the ARV is 75K and you want to pay 50% of that and you have $2,500 in repairs and $5,000 for your pocket. So you tell them 25K and you have a little breathing room to work up to the 30K you will pay.

First things first though. You need to build your list of investors that are presently buying property. You will get this list from emailing those who advertise apartments for rent on Craigslist, going to your local REIA meeting, meeting them on the courthouse steps when they are trying to buy a foreclosure, etc. Talk to each one of them, get the name, email address and phone. And ask them what they want. What are their buying criteria. Then you go and find houses for them. Amateurs find a house first and then a buyer. If you buy at 50% of ARV you will likely be able to find an investor to buy it but it may take a little time. Or you could buy property that you already know they want, perfectly fitting their buying criteria, put your contract on it and close on it right away.





Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 03, 2009, 08:03:33 pm
Thank you so very much.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 07:41:28 am
Hooch,

The fear of rejection is one if the things newbies struggle with....so ,we tend to reverse the protocol for success...or ,we opt for things like ListSource.com....what has your experience been with lead websites....should these only be supplimentary in addition to ,networking with our local cold calls ?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 07:45:58 am
Hooch,

What is GIS ? :confused
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 04, 2009, 11:54:54 am
After you put in a few offers you won't care about rejection anymore. I could care less if they don't like my price. I always give a fair investors price for the house and start a little lower than that because they will always want to negotiate.

Remember, a fair investors price for the house is low. You are in investor and you are doing this to make money, not loose it. Honestly think about it. Who cares if they don't like your offer???  If you can't work an agreement with them by the end than help them out. Give them some suggestions of getting rid of it for what they want. Tell them to put it on the market for what they think it is worth. Put it on there for $20,000. Subtract 20% because houses on the market today are selling 20% or more below their value. (make this number up to whatever you want it to be). You now have $16,000. Now subtract the $2,000 minimum commission that the realtors are going to require to split on a house with this low of a value. Now you have $14,000. Wait for a year or more to sell it like everyone else does. And you said you need money now? I am not even sure that you could convince someone to buy that house for $16,000 in the first place. It is going to have to be torn down or the person will have to spend $60,000 to repair it. $60,000 plus $16,000 equals $76,000 and no house around here is selling for that much fixed up.

It would have to be an investor that would buy this house due to the extreme amount of cash that will have to be put into it. I am offering you a very fair offer. $5,000 above what I wanted to offer! Code enforcement has been cracking down on houses like this and plan to in the near future start lawsuits. My offer stands. I can give you no more than 24hrs to either sell it to me or try to find someone else that has the cash to put into. I have other people waiting on offers to me and can't keep them waiting too long.

Now that's a little extension on the conversation on the low ball offer house. That is playing hardball with them. Your job as an investor is to play hardball. If you don't you will not succeed, making very little if anything on houses you buy.

After you have developed a few techniques on various situations and price ranges of houses it will be a cake walk. MOST people will not like your offer so you will have to get over this. It is your job to smack them off their high horse and bring them back to reality. This is what your house is worth to an investor. This is as much as any investor would ever pay for this house. We all buy with virtually the same buying criteria. No one would buy this house unless they were an investor due to the amount of repairs needed.

Then tell them that if they think they can repair it for less. Please do so and you will buy it from them. (Remember, they have no cash and they are broke). Not many people have 25-30K sitting around. Say if you think that you could fix it for 25K and they want 20K as is than it will be worth 45K and you will buy it at that. No worries, they won't take you up on the offer. They don't have the money to fix it. Even if they did take you up on the offer, if you don't think it's worth it you don't HAVE to buy it.

So ditch the fear of rejection because you will get rejected on 99 out of 100 offers you give.

I don't use lists. I make my own. If I am looking for vacant derelict structures I drive around the low income investment area and look for houses that have boarded up windows or appear to be empty. I write down the address and go to the Roanoke VA GIS and get who owns the house. I then copy down the address their taxes get sent to or I do a search on their name and call them telling them that I want to buy their house and when can I meet them down there to look at it.

GIS is Geographic Interface System. Many local governments have one of these online. Some you have to go down to the courthouse and get the info. 

Here is mine so you can see what I am talking about.
http://www.roanokeva.gov/85256A8D0062AF37/vwContentByKey/N264GSDL482JEASEN/$File/RoanokevaHomePage.html

Click the link GIS Real Estate.
Then click Search/Query
Then Click Street Name
Then type a random address like 401 Campbell

You will see the owner, their tax address, all of the info about the property, what they bought it for, etc. Everything you need to know to find them and make an offer.

Back to lists. If I wanted to contact frustrated landlords who are sick of tenants I may buy a list from the courthouse of recent evictions.

The courthouse can be used for all kinds of good lists that are relevant and accurate. Divorces, probate court for those family members who have to sell their dead relatives property, etc.

You look for problems and then you try to solve them. That is where the deals are.











Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 12:38:10 pm
Wow ,Hooch...I'm impressed by your wealth of knowledge...Okay I have 3 REO's to visit with my buyer's agent....I did an online search thro my local county office on the homes....smeof the info may/may not be relevant...so I need your guidance.

Are  these numbers inportant to us  or not....Taxable land  $$ ,taxable land $$ ,Taxable appr $$$.

I looked at the pix online..and determined a conservetive figre for repair cost....bottom line is that I am going in there with a figure to verbally offer/or fax them my offer ?(what document should I use ?) on each of them....this gives me upto 5 calender days to wire EMD to my title company,right?....
Also....I hear stuff about the need to be generous with the buyer's cut for their sservices to me ,the investor.How much should we be giving them ? Should I not take anything from themat all...am I entitled to some kinda cut from them?

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 04, 2009, 01:09:33 pm
"""Okay I have 3 REO's to visit with my buyer's agent"""

I'm not sure I understand this buyers agent thing. Please explain.

"""Are  these numbers inportant to us  or not....Taxable land  $$ ,taxable land $$ ,Taxable appr $$$."""

You should see that there is a number that is the total Tax Value of the property. Tax values are not always correct so don't count on them but are often relatively close to the value of the property. If you subtracted the taxable land from the Tax Value you would have the value of the actual structure on the land. But you want the Tax Value which includes the entire value of that property in the beety little eyes of your local tax man.

On an REO I like to know what the bank paid for it when they ended up with it on the courthouse steps. You can get that by calling the trustee that sold the house but to know this you would have needed to previously be watching the legal notices in your local paper or on their internet classifieds. What the bank paid doesn't mean too much as your offer will not be based on this anyways but I just like to know it. I also look on the GIS to see what the previous owner paid for it.

"""I looked at the pix online..and determined a conservetive figre for repair cost...."""

You don't just look at online pictures to determine a repair cost. You must see it and look inside. The house could be completely gutted for all you know.

"""bottom line is that I am going in there with a figure to verbally offer/or fax them my offer ?"""

Tell me what this buyers agent you are talking about is. If they are a real estate agent they will be writing the offer. You just tell them what you will pay.

""".this gives me upto 5 calender days to wire EMD to my title company,right?...."""

Sorry, what does EMD stand for? My brain is a little fried right now.

"""Also....I hear stuff about the need to be generous with the buyer's cut for their sservices to me ,the investor."""

Are you telling me that you are buying this from a wholesaler that has some how put a contract on a bank owned REO? The place investors buy REO's from is directly from the REO agent. No need for the middle man and I don't think it is possible for a wholesaler to get in the middle of an REO. The banks don't allow it as far as I am aware.

You need to be dealing with real wholesalers that find property the exact same way that I previously mentioned. As far as how much to give them it is the difference between the investors buying criteria and what they get it for. I could care less what they make on a house as long as the deal closes at what I am willing to pay for it.

If you are buying REO's you need to deal directly with the REO agent, not a wholesaler.



Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 01:32:35 pm
Okay...the taxable info I got ,may actually be the same info you get from your GIS...your city /local gov GIS is impressive elaborate,should I enquire again or is the info I'm getting the correct one?....local county tax assessors website ,is where I got my taxable info from.

Given this new info about the taxable assessmnt, I have a etter graspof how to play my numbers...but yes, I must go in and look at the home inside prior to making a verbal offer.....now,has it been your experience that these REO agents will try to bargain to get you to a favorable amount ,to benefit their pockets too ?..eg ,asking $102k.....total taxable value $82k....I want to offer @ 50% - $42k ( using MAO formula), @65%- $80k.

If I give her a verbal offer on friday..then that gives me 5 days to wire the Earnest Money Downpayment  to my title company ,right?

EMD--Earnest Money Downpayment  :smile

Sorry for helping in frying our brain.


I'm ot buying from a wholesaler....buyer's agent is infact th REO agent....so how does hse get compensated for her efforts for weeding out the REO's from the vast MLS ?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 04, 2009, 05:31:49 pm
"""Okay...the taxable info I got ,may actually be the same info you get from your GIS...your city /local gov GIS is impressive elaborate,should I enquire again or is the info I'm getting the correct one?....local county tax assessors website ,is where I got my taxable info from."""


You may want to confirm by a phone call to your tax assessor to make sure that the number you have is the total tax value. Not seeing it I couldn't tell you for sure.

"""has it been your experience that these REO agents will try to bargain to get you to a favorable amount ,to benefit their pockets too ?..eg ,asking $102k.....total taxable value $82k....I want to offer @ 50% - $42k ( using MAO formula), @65%- $80k."""

First of all, there may be some areas in the country that don't follow this but most areas property is selling at or below tax value just to the average home buyer. What they ask is completely irrelevant. I use that only for a basis of how crazy they are. If they are astronomical amounts above the tax value than I don't even bother because there is a high likelihood that they are off their rocker and there will be no deal, just wasted time. Wasted time is not a bad thing for a beginner though. You need to run the numbers on many deals so you can get your feet wet prior to actually buying one. When I see the tax value I would in my mind be saying, Asking $82, ARV is ??? $72 ??? MAO at 65% (if that is where you want to be) of what I found the ARV to be, so, $46,800 with NO repairs and most REO's HAVE repairs needed. You must find an accurate ARV of the property if you plan to flip it or wholesale it. If you plan to landlord it there are different formulas that come into play.

Will the REO agent push you? Yes. They are just real estate agents with a deal with some banks. They like commission. They like to "ACT" like everyone wants that property. It's a big game though. NEVER take the advice of a Realtor. You are an investor and investors know more than Realtors unless that Realtor is also an investor, which would mean that they are in their Realtor shoes and about to get you for everything they can.

Don't make hasty decisions based on this high pressure timeframe that they try to give you. Just bring your results back here and don't make a decision until you have enough of us confirming that you are making a good one. Then do the same thing for other investors once you have learned the ropes. Us investors are a tight group and like to help each other out.

"""If I give her a verbal offer on friday..then that gives me 5 days to wire the Earnest Money Downpayment  to my title company ,right?"""

I give $500 earnest money check to my REO and their company holds it and gives it back when the offer is rejected.

"""I'm ot buying from a wholesaler....buyer's agent is infact th REO agent....so how does hse get compensated for her efforts for weeding out the REO's from the vast MLS ?"""

If she is an REO agent and not just a Realtor than she is getting paid at the sale from the bank just like any other sale. The seller (which is the bank in this case) negotiates an interest rate with the Realtor (REO in this case) that they will pay her for the sale of the house. When it is sold she gets paid. She doesn't have any effort of weeding out anything as she is the one directly representing the bank, She is not representing you. If she is the REO of that property. Any Realtor can sell any REO. But the REO Agent is the one you always need to talk with.

The reason is this. REO's are sneaky little buggars. They have many tricks up their sleeves to attempt to get the full 5 or 6% that the bank is paying rather than having to split it between them and the Realtor that brought a buyer. You see, what they will often do is put that property up on Craigslist or something like that a week or two at first before they even list it on the MLS to see if they can find a buyer so they don't have to split the commission. This is ILLEGAL. They are required to put it straight up on MLS but they don't. Another little sneaky thing they do is lets say that you have a Realtor and you are trying to put an offer in on an REO. Your realtor submits your offer and the REO goes behind your back and tells someone else she is working directly with what your offer was so they can beat it by a couple hundred bucks and there again the sneaky buggar got their whole commission without splitting it. That is also Illegal. They know they won't get caught though so it is a pretty common thing across the US.

Your compensation to her is that whole 6% because you are dealing directly with her. If she is doing some Prior to MLS stuff with you and you know that she is ONLY talking to you about the deal than you may want to consider additional compensation. That would be one of those insider hookups and that is highly valuable as she is probably willing to submit some super lowball offer to the bank and act as if it was what it was worth on the Broker Price Option (BPO) that she has to get.



Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 06:12:36 pm
For starters here is the website I go to for Taxable Value of http://www.lehighcounty.org/Departments/Assessment/SearchRecords/tabid/315/language/en-US/Default.aspxhomes.

Look up :1249 Lehigh St.

This will give you the numeber's  I'll be looking at tommorrow.
Tax value is  $82 k....asking price is $102,300....ARV is  $120 k.

I visited a website for Realtor's and shopped for a buyer's agent ,detailing exactly what I wanted them to do for me...she is the only one who took the bait.
Now , the listings she forwards to me ...I am able to look up again on Realtor.com....I found out that the homes are not her lsitings but belong to a different Realtor...so she will be splitting the commission with the original listing agent,right?...this other REO agent,I had spoken too years ago and know who she is...I was tempted to contact her directly...this isn't illegal thing to do is it ?

This buyer's agent is the same one who advised me to cancel an appointment I had made to see another home and then turn around to book her instead...sneaky huh?...I asked her if there was going to be a problem....she said no,unless I make an offer and proceed to close....I see what you mean with her wanting a share of commission between her and the listingagent...maybe I should not deal with her in the coming future?


Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 04, 2009, 06:41:33 pm
Tax value is  $82 k....
I saw the site, this is correct.

asking price is $102,300....

I don't know why an REO would have an asking price higher than tax value in these market conditions. Usually it is significantly less, at lease in most parts of the country. Possibly different there. Here an REO will be listed at 1/3rd to 1/2 the tax value.

ARV is  $120 k.
Is this something that you have confirmed without a doubt. (Most important part!)

I visited a website for Realtor's and shopped for a buyer's agent ,detailing exactly what I wanted them to do for me...she is the only one who took the bait.

A buyers agent would be nothing more than a real estate agent. Real Estate Agent for a Buyer. She is not likely an REO.

I found out that the homes are not her lsitings but belong to a different Realtor...
All listings a Realtor can give you, you can look up for yourself on Realtor.com AND this other Realtor who is listing the property is the REO! You will be best off looking for REO's on Realtor.com, seeing who the listing agent is who is the REO for that property.

so she will be splitting the commission with the original listing agent,right?...
Yes, so for the reasons that I previously explained, you likely will not get the offer.

I was tempted to contact her directly...this isn't illegal thing to do is it ?
As long as you didn't sign any crazy contracts saying that this other gal you talked to is the only one who can sell you a house. You can do whatever you want to do.

This buyer's agent is the same one who advised me to cancel an appointment I had made to see another home and then turn around to book her instead...sneaky huh?...
Not necessarily sneaky in this case. She is just trying to fulfill what you asked her to do on that web site. To be your Realtor. If she is your Realtor and you have decided you like her you would want her to show you everything and get the commission for doing so since she is spending her time and gas money trying to find properties for you. The thing is, you are an investor, and you don't need her. You can solve this real quick. Call her up and ask her what properties she is an REO on because you would like to see hers. To be an REO she must be the person who single handedly is dealing with the bank. Not a middle man or middle woman in her case.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 07:05:16 pm
I'm not sure whythey have it jacked uo like that for an REO...your properties should be more expensive than in this little valley,but I'll go do the best I can with the offer..it's been on the market for 73 days.

ARV, is accurate according the recently sold properties  within 2 miles of the one on sale and of the same sq ft.

I need to look around the MLS myself...thing is I can't tell whih are REO'S unless they are in the worst area of town,burnt out  and priced at a really low price....I mean really bad places.


No I didn't sign anything to tie my me to her as my exclusive agent...I'll send her an email and request that she direct me to prop's that are her REO's... I'll go see what she has lined up for me ,then tell her to show me her REO'S...and I will go ahead and contact the original listing agent,for future REO's.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 04, 2009, 07:58:34 pm
ARV, is accurate according the recently sold properties  within 2 miles of the one on sale and of the same sq ft.

I would rather see you get recently sold properties within 2 blocks of the one on sale unless those houses around there are all a couple of miles apart. The square feet doesn't matter as much as the distance from the house as houses can change significantly in value by the block.

Look here and see what you do for determining the ARV based on the square foot in a situation where you don't have closely comparable houses that sold near by that are around the same square feet.
http://www.reiclub.com/forums/index.php/topic,43212.0.html

If you aren't completely confident that you have this ARV step down like the back of your hand than do not put an offer in until you do. You can always ask the realtor that you are working with to do one for you. They do know how to do this but I like to put my fate in my own hands.

I need to look around the MLS myself...thing is I can't tell whih are REO'S unless they are in the worst area of town,burnt out  and priced at a really low price....I mean really bad places.


The way I tell is by a combo of the MLS and the GIS. I look for houses in the price range that I think I may be able to swing a good deal and then look it up on the GIS after my realtor has told me the exact address. The GIS lists the owner and if it is a bank you know it is a REO.

You should consider going to your local REIA meeting and ask the local investors who the wholesalers are. Also you can find them on Craigslist.

You should also consider not going this once it is on MLS REO route. The deals are before the bank owns it, not after the bank owns it. After the bank owns it deals are the ones that all the other investors passed up.

Go here to learn more about that.
http://www.reiclub.com/forums/index.php/topic,43035.0.html

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 04, 2009, 08:16:20 pm
Gosh...am learning so much...so if the MLS listings are the ones investors have passed up,does this mean the MLS is not the way to go at all ?.....I looked in Craigslist and  It is somewhat confusing,I must learn to develope a discerning eye....you also mentioned that I should be able to build my buyers list from Craigslist...most of them do not allow people to contact seller's with offers for other sevices....is this a hard and fast rule?....
Are you advising that I try to snag pre-forclosures for deals prior to MLS lsitings ?.am having second thoughts about keeping my meets tomorrow....I'll go anyway ,if only for the practise.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 09:54:42 am
What is yout take on RealtyTrac listings...at least am assured the agents that reach out to me are REO agents...am I correct?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 06:39:16 pm
I would not count on them being REO agents. Remember, ANY Realtor can sell ANY property on MLS.

You could try this Google search and type in your city and state to find REO agents in the directories.
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=A8i&q=reo+agents&btnG=Search&aq=f&oq=&aqi=g10

The only problem here is that Realtors will pay to put themselves on these sites because they want to become a REO for banks and they are hoping that the banks will look there and call them. From REO's I know, the reality is becoming and REO requires doing BPO's for a bank for a while and networking with them continually asking if you could do some REO's. Eventually they get to know them and start feeding them to them.

BPO stands for Broker Price Option which is the crap work of the industry. Getting paid $50 to $75 dollars per house to go out to it and determine its value, take pictures, etc. Lots of work for no money. That's why Realtors don't like doing BPO's but they don't realize you have to pay your dues.

I would suggest you contact the largest property management companies in your area and ask them. They will know if they have been in the business for a while. The problem with asking another Realtor (who also know) will be that they will be pounding on you to just go through them to buy it.

You can also go to craigslist and search "housing" using the search term "bank owned" and there is a high liklihood that the person listing it is the REO. Ask them if they are the REO Agent working directly with the bank. Don't worry about if it is not in your price range. Tell them you would like to be on their contact list. Most have lists of investors to send an email out to when they get the property prior to MLS and along with Craigslist.








Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 07:26:46 pm
Wow....you are right..I went  & looked at the houses and told her I have to consult with my partner before I could get back to her...I asked her if she had her own listings ...she ran down her explaination of why most Realtors don't like REO's ...in other words she is not the REO agent...I want to look at the paper work she gave me and revisit the numbers based on what I saw,prior to your feed back. :huh Should she be telling me this ?
I will work on your suggestion and try to find REO agents.There has got to be enough REO's to go around.....too many REO's out there to be such a lack....Could I call on banks  & see if they may be able to devulge a name or two of REO agents they work with ?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 07:53:43 pm
I found 5 REO's agents in my area....3 of them are big in this area  & have set up shop/website with a bunch of REO's they grab from the HUD....two feature prominently feature as repeat buyers from the HUD site I view....how likely are they to send me the fresh bach of REO's....as a matter of fact , I contacted on of his Realtor's and she was not willing to work with me becoz ..."..newbies  don't know how to close on these deals and so I don't make money...". :eviltongue

I took their cellphones down anyway  & will call them and ask to be put on their list of buyer's.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 08:30:45 pm
"""I contacted on of his Realtor's and she was not willing to work with me becoz ..."..newbies  don't know how to close on these deals and so I don't make money...""""

Weird, you don't have to know how to close on an REO that is on MLS. That is the job of the person you were talking to.
Realtors are supposed to help you close, find financing, etc. That is what their commission is for. Not for sitting around on their A**es.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 08:43:07 pm
This Realtor is relatively new in her new found career and may not be familiar withhow hings are done...didn't even bother to ask if am using Private Lenders ....just assumed that I don't know anything ans just wanted to waste her time.....she knows me from church/ not as the investor that I am....so no confidence in my abilitites in this nw venture...maybe I came across as not very knowledgable about what my game plan is....in anycase I don't plan on giving her my business...at least not for a while.

I would be contacting her boss for help...or just pick whats on his website...that should be the way to go right ?...Question....why should I try to get deals from this guy ,if rehabbers are going to him ....prices are already low...wouldn't this be ...me acting as the middle man to deals that are already visible to rehabbers when they visit his website ?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 09:08:53 pm
I would be contacting her boss for help...or just pick whats on his website...that should be the way to go right ?...Question....why should I try to get deals from this guy ,if rehabbers are going to him ....prices are already low...wouldn't this be ...me acting as the middle man to deals that are already visible to rehabbers when they visit his website ?

You will need to explain this because I have no idea what you are talking about. Why would you be contacting her boss, who is he and what benefit to you is he? Getting deals from this guy? Who is this guy that rehabbers are going to? You need to be more specific because you lost me. And what is his website? Just a web site of a broker that is listing the properties that his realtors have that are on MLS anyways?

The only benefit a wholesaler is to a rehabber is if the wholesaler finds their OWN deals in some of the ways I previously listed. There is no reason they would need a middle man on anything that is on MLS including REO's. It is just as easy for them to just get them themselves.

Tell me exactly what your objectives are in real estate. What are you interested in doing and what kind of cash flow do you have to work with. Will you be buying the house outright? Getting a loan on it? Trying to do double closings or assignments? Also how is the credit? There are places for anyone in real estate but there are also limiting factors which can determine where you need to get started.





Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 09:37:28 pm
Okay...maybe all that I posted ( regarding this new discouraging realtor  & her bosses website ) is irrelevant....What I tried to do is find a REO agent in her..only to realise that she works for a guy who is infact a  bulk  wholesaler.

His website :
http://www.cassidonrealty.idxco.com/idx/3416/details.php?idxID=204&listingID=330953

This property was an REO :GIS reflects this info....

http://www.lehighcounty.org/Departments/Assessment/SearchRecords/tabid/315/language/en-US/Default.aspx
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 09:44:16 pm
"Tell me exactly what your objectives are in real estate. What are you interested in doing and what kind of cash flow do you have to work with. Will you be buying the house outright? Getting a loan on it? Trying to do double closings or assignments? Also how is the credit? There are places for anyone in real estate but there are also limiting factors which can determine where you need to get started."


I am persuing all deals as a wholesaler,with an eye for assignment/double closings.....cash flow? minimal of my own....will tap into private funding eg Coastal-Funding ,Ivisionary etc....credit ?....non to speak of...laid off the past 16 months & operating in grey... :help


Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 09:45:26 pm
There is nothing wrong with buying from a wholesaler. Wholesaler to wholesaler to end user happens all the time.

Wholesaler to wholesaler to flipper, possible but don't expect to make much.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 09:53:41 pm
I am persuing all deals as a wholesaler,with an eye for assignment/double closings.....cash flow? minimal of my own....will tap into private funding eg Coastal-Funding ,Ivisionary etc....credit ?....non to speak of...laid off the past 16 months & operating in grey...

Based on this, assignments and double closings will work for you, birddogging is another thing to throw into the mix, Subject To's will work, and sandwiching buyer lease options and that is all I can thing of off of the top of my head that requires very little money. If you want private funding from a hard money lender you will likely need to put some skin in the game, at least 35%.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 10:06:03 pm
You are going to be most successful if you drop this REO thing you want to do and go out and find problems like I said earlier. It's good to run the numbers and stuff for practice but if you are operating in the gray right now you need to make something happen and spend 80 hours a week doing one of the things I suggested. REO's on MLS are investors throwbacks.

The least expensive way to get this kicked off is finding vacant houses in low income areas, finding the owner on GIS and calling them while in the mean time developing a buyers list. There are lots of buyers for these bombed out areas. Mostly what  I buy are junkers that desperately need rehab. Also put some we buy houses ads up on craigslist and get some people calling you.

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 10:31:04 pm

You are going to be most successful if you drop this REO thing you want to do and go out and find problems like I said earlier. It's good to run the numbers and stuff for practice but if you are operating in the gray right now you need to make something happen and spend 80 hours a week doing one of the things I suggested. REO's on MLS are investors throwbacks.

Ouch!....thanks..I hear you. :eek2


The least expensive way to get this kicked off is finding vacant houses in low income areas, finding the owner on GIS and calling them while in the mean time developing a buyers list. There are lots of buyers for these bombed out areas. Mostly what  I buy are junkers that desperately need rehab. Also put some we buy houses ads up on craigslist and get some people calling you.

I did put some ads on Craigs list /Backpage,got the toll free number...need to ad one in our local paper.I've been skeptical about going to the middle of the city center for these junkers...even after I have heard that there is success to be had in these areas.Are you wholesalling these profitably too?



Yes....these number running sessions are expanding my brain...but I need to make something happen.
Thanks....now here is an example of one that I looked at today.....REO sold as-is ....note to buyer's.
"Buyer is responsible to order U & O (..don't know what this is..) or any repairs.Minimun EMD - $2500 certified funds...Buyer responsible for winterization/de-winterization..by cntractor approved by seller..Settlement Date to be subject to recording of sheriff Deed."

GIS info reflects :http://www.lehighcounty.org/Departments/Assessment/SearchRecords/tabid/315/language/en-US/Default.aspx

Asking price  @ $124,500.

Total Tax Value : $55k

ARV :$150k

MAO : $150k x 50% - $ 20 k- $8k
          $75 k-$28 k
          $47

Is this worth the trouble given the multitude of responsibility shifted to buyer ...winterization/de-winterization...repairs by contractor approved by seller...etc.

Alternatively offer @ 65% - $ 69.5 ( defeats the purpose ,especially since Tax Value is  @ $71,400 / or not)
              

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 10:35:00 pm
Pardon me...Total Tax Value is $71,400 not $55k.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 05, 2009, 10:57:34 pm
got the toll free number...

Toll free number? You don't need that. Wasted money. Only needed for the people who are buying houses outside their local area.

I've been skeptical about going to the middle of the city center for these junkers...even after I have heard that there is success to be had in these areas.Are you wholesalling these profitably too?

You can make plenty of cash off a junker. I don't wholesale any junkers. I keep all that I find and get the right price on and buy any junker that a wholesaler brings me that matches my buying criteria. Rent X 30 minus repairs.


Asking price  @ $124,500.

Total Tax Value : $55k

ARV :$150k

MAO : $150k x 50% - $ 20 k- $8k
          $75 k-$28 k
          $47


There is no way that the ARV is 150K and the tax value is 71K. Over 2 times higher. Did your tax man take off work for the past 15 years? Governments just love to make sure their tax assessment is right up there close to the real value of the property as they get more money.

Is this worth the trouble given the multitude of responsibility shifted to buyer ...winterization/de-winterization...repairs by contractor approved by seller...etc.

A great deal of rental property has responsibility shifted to the buyer. I don't understand what this repairs by contractor approved by seller is.

The deals you are finding are crap deals because they are MLS. And I am assuming that you looked at the property and know exactly what it will cost to fix it. If someone wants that much over the tax value they aren't really interested in selling their property. Is your market there BOOMING?

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 11:20:03 pm
OUCH...OUCH...OUCH...This REO has been on the market for 73 days....repairs? ...no I don't "...know exactly how much it will cost to fix it ..."

Toll free number is not that bad an idea....it's actually "call forward" instead of having folks calling my home,directly.

Junkers are good if your well versed in the intricate dealings/ and have enough cash to spread around to hold on to...I'm not there yet.

ARV :I must be off the target herre...care to look it up & tell mewhat it is I'm doing wrong ?

http://www.realtor.com/homevalues/#NEXHASHlat=40.561961999999994&lon=-75.500942&zoom=19




Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 05, 2009, 11:35:15 pm
Checked this out on : http://www.zillow.com/homedetails/3127-Salisbury-Dr-Allentown-PA-18103/9601385_zpid/....this appears to be more accurate...right?
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 06, 2009, 12:05:23 am
Links to your GIS and Zillow don't work.

Zillow uses tax assessed value to base the value of the property.

That is also not an accurate way to do it. You MUST see the house, estimate repair costs, look for houses in the area (very close) that have sold recently, if none close to the same sq ft, determine the cost per square foot for the others and apply it to yours.

There is something going on wrong with these ARV's that you are figuring and you need to fix the problem before buying anything. And drop this MLS stuff. I don't know how you will assign a REO when the banks are not letting people do that. Double closings will cost you as you have to pay for 2 closings.

If you're limited on cash flow do assignments instead of double closings.

Or subject to with a lease option.



Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 06, 2009, 12:26:40 am
Okay....assignments are what i'm targeting right now....I was reluctant about subject to's but it looks like I have to do that  also...assigning my pose a problem but I've heard about "quit claims" may be more feasable for me..

Try the GIS link again please.

Realtor.com....click on "Find home value"....3127 Salisbury Dr,Allentown,PA 18104.

Lehighcounty.org....click on  "Search Records "...plug in the address.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: CLEELLIO9 on June 10, 2009, 12:27:41 am
SUGGESTION, TREAT THEM LIKE PRE-FORECLOSURE, IF YOU HAVE CASH, MAYBE ADVANCE ASSUMPTION FEE THEN SUBLET AND BUILD THE EQUITY FOR SIX MONTHS OR MORE THEN MAYBE CASH OUT BY SELLING NOTE TO NOTEBROKER TO WHOLESALE KEEP INTOUCH TO FOLLOW UP
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 10, 2009, 08:14:15 am
You Have Got To Be Kidding Me!
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 10, 2009, 09:13:06 am
 CLEELLIO9 .........In my attempt not to make this complicated, I  want to stay with one strategy ,that of wholesaling period.

Hooch....you're choise of investing seems to have worked well  for you..I certainly thank you for your imput in individual  cases.

Having said that...am about to make an offer this morning....check this out for me .

Requested comps for an Estate Sale for on MLS.

Asking price : $140

ARV (per Realtor ) : $129,484 @ $97.21/sq ft.....my Arv is  $84/sq ft.
House price index : $163,799 ( is this important ?)

GIS total tax value :$85,800

No offere on the table yet...so I hope to offer  & see if it sticks...aware that this may have to be done several times.

My numbers...after looking at the house....needs carpet...paint and little else.

ARV :$129 x 70% - ( $11k + $ 6 k..assign fee)
        $90k- $16k
        $69,900 = MAO


ARV:$129 x 65% - ($11k + $5k...assign fee)
       $84 -$15k
       $64,900k = $MAO

How does this look....how does this work? ...I plan on sending her an email,which she will forward to the saler agent .
Is this where they get back to me with a yah/nay and then they ask for certified funds as EMD ?
I know I shouldn't antcipate the negotiations...but I must ready myself on how to counter.
           



Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 10, 2009, 11:38:28 am
Asking price : $140

ARV (per Realtor ) : $129,484 @ $97.21/sq ft.....my Arv is  $84/sq ft.


The Realtors ARV looks better than those ones that you were coming up with before. It still looks high in my opinion though. But I don't know your market. During good times the ARV is usually 15% or so above the tax assessed value. I would definitely confirm this with the Realtor prior to the offer. I would ask her to please show you the recently sold, close by properties, and their sale prices that she based her ARV on. Always confirm anything you get from a Realtor because you don't let other people put your fate in their hands. Smart thing to always do! I'm glad to see that you are using the Realtor to get the ARV since yours were wacked and this will help you learn BUT verify it as any investor would by asking for the data that it was based on.

House price index : $163,799 ( is this important ?)

Not to me

My numbers...after looking at the house....needs carpet...paint and little else.

ARV :$129 x 70% - ( $11k + $ 6 k..assign fee)
        $90k- $16k
        $69,900 = MAO


ARV:$129 x 65% - ($11k + $5k...assign fee)
       $84 -$15k
       $64,900k = $MAO


Please explain the 11k and the 5K on one and the 11k and 6k on the other. Are you saying that it is 11K in repairs and on one you want 6k and the other scenario you want 5K?

How does this look....how does this work? ...I plan on sending her an email,which she will forward to the saler agent

You give offer and she will come over to your place with paperwork and want like money for an escrow, I give $500 if it is to a Realtor and $10 bucks if it is to the homeowner. You sign the offer paperwork which there is lots with a realtor, and she gives it to the sellers agent.

Is this where they get back to me with a yah/nay and then they ask for certified funds as EMD ?

At this point my strategy is to give them very little time, like a day or two tops to make up their mind as I have other properties that I need to get to if they don't want to sell it to me. I found that waiting for a couple of weeks is nothing more than wasting your time when you have to go through many of these. If you are putting the offer in for a bank you may have to give a little more time. I then give a week. The banks will play these games and send you a note back that they are now in a competitive bidding process between you and other investors and to give another higher offer. I don't like to wait around and let anyone have time to find a higher offer.

I know I shouldn't antcipate the negotiations...but I must ready myself on how to counter.

You will start at your 65% OR LESS and you will be willing to pay no more than your 70%. There will be no counter offer over that. Maximum Allowable Offer has the word Maximum and you must never break it.

I think you are going to run into problems if you are putting an offer in on a REO and trying to assign it as the banks are not allowing that now.

Look at my other post on valuation of real estate. It is very detailed.




           

Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 10, 2009, 12:35:10 pm
Hooch...thanks again for all the insight....this home is not an REO.....Estate Sale.

I verified her comps and they are preety much what I should have been doing...all 5 comps are close to the home and have sold within the past 6 months.

I checked all of them to make sure she was giving me the right numbers...she was.


Question ...when I look at the GIS and determine the name  of owners...& looks like the owners have a differentr mailing address than where property is...cn I go ahead and contact them directly and try to deal with them instead....un-ethical ?...can I get into trouble for this..do I have to wait till their contract with realtor is up ?

The differet number's I show for the asignment fee is nothing more than my trying to be conservative....if I hope to move anyone I put under contract ,then it serves me well to minimize my fee...right?
The repair costs are based on formula gleaned from this forum somwhere....states that if repairs are minimal,charge $8/sq ft...if medium ,charge $10-$12/sq ft...if really bad,charge $15/sq ft ..multiplied by the home sq ft.

In this case the home is alright ...good curb appeal...could use some updates,new carpet/new appliances & paint...could be less.




Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: Hooch on June 10, 2009, 01:51:31 pm
Question ...when I look at the GIS and determine the name  of owners...& looks like the owners have a differentr mailing address than where property is...cn I go ahead and contact them directly and try to deal with them instead....un-ethical ?...can I get into trouble for this..do I have to wait till their contract with realtor is up ?

You can't get in trouble but the seller could as they have a contract with the realtor. No need to contact them though as they won't likely go around their contract. That is how you find the contact info for someone on a vacant house that you drove by and want. You contact the people on your own potential deals that you find when it is not listed.

if repairs are minimal,charge $8/sq ft...if medium ,charge $10-$12/sq ft...if really bad,charge $15/sq ft ..multiplied by the home sq ft.

That's about right on the really bad side but in my opinion pretty high on the minimal side. You could just need paint inside and out which may cost you 3K or less on a 1,000 sq ft home and compare that to 8/sq ft x 1,000 = $8,000.

It would probably very very accurate for a flipper though as they will do the new appliances, landscaping, etc. If you're selling to a landlord they will just paint it and fix any safety related issue for code enforcement.
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: MamaKaranja on June 10, 2009, 02:07:57 pm
Thank you again...guess I must jump in, with great anticipation & expect the best...learn from the experience and do more offers...your response gives me confidence that the time is ripe to place my offer...
Title: Re: Neighbours home on Market for 229 day's.How much do I offer them?
Post by: moellerryan on August 04, 2009, 12:21:17 am
Asking price does not matter.  Find the current or after repair value and the LTV you are willing to pay.  Then lowball as many properties as you can.  If you can write 100 offers to distressed sellers, do it and cherry pick the best ones.  I take ARV/2 - rehab to calculate my max offer and start my bid below that and play the numbers game.  No reason to get stuck on one deal.