With my limited about of knowledge & money here is my plan.

My Plan: Buy property anywhere in the US online from an auctioneer that is livable and needs no major repairs for cash. Then find an agent in that area to list the property to sell quickly for a profit-sounds simple right! (I will do my own research & due diligence)

Then, I found this site yesterday it opened up my eyes to a whole new vernacular with words like seasoned? Bird-dogging? Wholesaling? With acronyms & formulas I have never heard of ATV 70%? But want to learn everything about.

At first, I got excited; I was going to learn something new and special. Then panic set in because I realized that I don’t even know what I do not know? Is that such a bad thing?

My questions would be; Is it very difficult to buy/sell property out of state? What are your opinions about auctions & auctioneers (US government, REO, County tax default, etc…) and where is the best source to buy wholesale property from?

I would appreciate any comments & guidance you are kind enough to offer me.
Thank You in Advance for your Time!

Start local. You will likely get creamed in the auction market out of state, unless you know your numbers rock solid for the area you are buying in. And have a good real estate agent partner to help you.

Go to some auctions locally to see what actually goes on there, and what type of bidders there are.

Thank you Lori K! I am in California even in the declining market, investment property is still too rich for my blood. I would have to put all my eggs in one basket.

I do go to local on-site auctions here in California (I have not found any online for California, if anyone knows of some please let me know) the properties do sell at a good price, but its still too high for me.

The online auctions outside of California are more in my price range. Also, the human factor of the auctioneer trying to get a higher bid while it is funny at the auction, is something I’d like to avoid when biding. Thanks again Lori K.

Hi design101,

One of the things with buying a property out of state is that you are not seeing the property and you don’t know what conditions it is in. Not that it can’t be done but what I would recommend is develop a relationship with a realtor or if you have family member in the area you plan to purchase and have them take a lot of pictures and even then it is still risky. With a realtor he or she can due some due dilligence for you.

For example: The value of the property, the area and neighborhood it is located in ( you don’t want drug infested or crime areas ), will it need any rehab and what would be the estimated costs. The realtor can be your best friend.

As far as Seasoning. This means that if you buy a property today in a lot of cases the Title Company will not do the transaction of you selling the property in X amount of time. In some cases it could be 6 months to 1 year. The best way to get around this is to interview the title companies and see if their underwriting has a seasoning requirement and if they do find you another one that will do no Seasoning. They are out there but you have to search for them. Do a Google search for a title company in the area of your property.

Bird-dogging is a term used for refferal fee.

Wholesaling in most cases is a property that needs some kind of repairs but can be very profitable as long as you buy well below After Repair Value which is the value of the home after you have repaired it. The ATV you are reffering to is actually ARV which means After Repair Value. When they talk about 70% of ARV it means that the bank or hardmoney lender will loan you upto 70% of the ARV ( After Repair Value ). Lets say you find a home that needs repair for $100,000 dollars, the Hardmoney lender will loan you 70% of that which is $70,000 dollars. The best way to find the potential value of the home is through a real estate agent because they will have the best up to date comparable prices in the area you are purchasing.

REO’s are plentiful in this day and age because there about 1.3 million people that are going into foreclosure as we speak. REO’s are bank owned properties that they need to get rid of and this is a perfect opportunity for many of us to make a decent return on your money.

Some of the best places to find these properties are:
www.faniemae.com, www.ocwen.com, and rehablist.com, www.craigslist.com

Look in the news papers for Property fo Sale by Owner they can be pretty motivated sometimes.

Remember to do your due dilligence and remember wholesaling in most cases they need repairs but can be Very Profitable.

About the panic, it was a good thing that you syepped back to find out more because you don’t want to step into a blackhole. I read this book by somebody I have great respect for Robert Allen his book is titled “Nothing Down”. It will enlighten you in many areas of real estate.

I hope I answered some of your questions. Have a Happy and Propsperous New Year.

Take Care,

Enlightened Business Solutions

P.S. Please do your own due dilligence !!!

Investing out of state can be done but there are definitely other challenges that you will face.

I would suggest spending quite a bit more time on this website reading and learning the basics before you go out and purchase something. You can also learn some of the lingo/terms etc by attending a local REIA meeting even if you are not planning on investing locally. Who knows you might even meet someone who also invests out of state.

California may be tough. Do you have any close friends or family members in other areas of the country that you may be able to work with? Or that may be able to suggest local “team members” to help you out so you are not automatically relying on finding people “in the cold”.

Learning something new and different can be very exciting, but don’t be so excited that you make emotional decisions instead of logical ones.


Knowing what you don’t know…

That’s the most exciting time ever. The learning curve is never higher at this time.

This is what I see in properties that are listed for on-line auction that are in areas that I know, because they are in my state and are in areas that I have been in, and looked at real estate in.

By far the majority of them are garbage and in areas that are very poor places to invest. They have wonderful write ups and wonderful pictures of scenic areas that they are “close to”. I guess it depends upon what you consider “close to” but I don’t consider 200 mies away to be something you are going to be looking at out your window.

The properties that are in good areas and might be good long term investments are offered for far more than the local market price. You’d be able to contact a local realtor and get something the same for half the price.

If you do not know the area well, and you do not look at the property, you could be buying almost anything. Buying real estate is not really the best time to close your eyes, cross yopur fingers, and hope.

www.hud.gov has online auctions in every state. ebay has online real estate auctions. www.realtybid.com is another online auction site.

Title seasoning is an issue for lenders rather than title companies. Buyers can not finance their purchase with an FHA loan if the seller has not owned the property at least 90 days. If the seller’s profit is really substantial, then the lender will want the seller to be on title six months to a year before they will make a loan for a buyer to purchase the property. Many lenders have incorporated these rules in their own underwriting guidelines.

This was an excellent thread folks.
Many thanks for ALL the great info. :biggrin

The gurus like Allen make it sound easy cos they want to sell you their programs. They can get you fired up, though, and that’s a good thing! REI is really like anything else, the harder you work, the more you make. California may be tough where you are, but I’d guess within 100 miles, there are spots where bargains can be had. My properties run as far as 150 miles away, but I manage…barely. A manager here, a carefully selected tenant there…

When you look at auctions, always remember that the easier it is to find a deal, the more people will be looking at–and bidding on–that deal. That’s why so many of us run “I Buy Houses” ads, to avoid as much competition as possible by getting the seller to come to us. I’ve bought in many ways including at auctions (tax forfeit, bank REO, Sheriff’s Sale, Marshall’s sale), but good deals can be hard to find, as many others are looking and bidding as well, and you need to do some homework.

A little luck helps too, but the more you’re out there, the more you’ll make your own luck. The first step to luck is to show up! I bought 7 apt. units at a tax sale three years ago for $22,000, and five units were occupied. I still own it, great cash flow property. I bought an older 3 BR house a couple of years ago with a bid of $100. Not a palace, but I still own that too, it’s doing OK. Both are in rural areas overlooked by most investors. I’ve also “wasted” many trips to auctions where everything went higher than I was willing to pay. But it’s fun, educational, and still beats not being there when that great deal presents itself.

If you have cash to play with, you might consider getting close to a good REO Realtor and making lowball offers on long-listed bank-owned properties, or figure out a way to find people in pre-foreclosure who have a bit of equity and take the property “subject to.” There’s a lot to learn!