Questions from a Newbie who wants to invest in wholesaling of properties from out of state using the internet bidding – with no time to personally inspect the property before making a bid. :help
How do you recognize whether it is a good deal or not?
What would your basic guidelines be, to follow?
How would you protect yourself being ripped-off using the internet method of buying?
Thank you so much in advance for your time and effort providing your keen insight of the matter.
Seve.707
I would just put all your money in a big pile and set it ablaze!!! It will be the same result.
Mike
Or you could send the money to me… I could use it.
If you are a newbie buying sight unseen… WOW.
Or are you saying that you are making offers on listed properties that you will wholesale to other investors?
So, why do foreclosure wholesalers advertise at ebay and not to their own local area? Also, why is it that there are many takers (bidders) anyway?
If I follow your logic then what you’re telling us is – you can NOT trust the sellers at ebay and those who bids are stupid, would that be the case?
Thanks
If I follow your logic then what you're telling us is -- you can NOT trust the sellers at ebay and those who bids are stupid, would that be the case?
You can not trust ANY sellers. The fact is that the vast majority of newbie real estate investors fail in a short period of time. Sellers are taking advantage of that fact to advertise to newbies.
Call me when you’re get ready to set the money on fire - I’ll bring the marshmallows!
Mike
we have a saying around my office that goes like this…
Buyers are liars and Sellers are thieves. :bobble
[b]You can not trust ANY sellers[/b]. The fact is that the vast majority of newbie real estate investors fail in a short period of time. Sellers are taking advantage of that fact to advertise to newbies.
Is that right? So, if [i]“you can not trust any sellers” according to your logic – who uses internet to advertise their own listings – then, why is it that there are so many R.E. investors/buyers like you? :banghead
Thanks
Dude, if you are going to buy a house on the internet SIGHT UNSEEN then you are trusting the seller and taking his word that the house is in good shape, etc… BIG MISTAKE!!!
But if you want to do that call me too and I’ll bring the Hershey bars and graham crackers since Mike is bringing the marshmallows. Or better yet call me and I will set you up with some GREAT deals… 
Not trying to sound too harsh man but come on…
Oh, and I have used the internet to market the houses I have sold, but I have yet to have anybody just trust me and buy it sight unseen. That would be nuts.
I am SERIOUSLY craving some Smores now…
So, forget all those highly potential out-of-state investment (bidding) IF you would not be able to fly there (ie: east to west) and see it yourself, correct?
My humble apology, I was just looking at other possibility given the scenarios I have in the OP - ie: ebay bidding
However, there’s no need for repeated derogatory statements and insult. You are not better than me when it comes to logic.
Thanks
If I had somebody I had worked with before and trusted telling me about a property that was a great deal then I would consider buying sight unseen. Not on ebay and certainly not as a newbie.
No, I’m not better than you in logic or anything else, just sharing my opinion, that’s all. Not trying to insult you man, just havin a bit of fun.
Just let him go…he was warned. He’s going to do what he’s going to do.
He’ll fail and we’ll not hear anymore of it.
Keith
No problem, I understand. I was also having fun asking philosophical questions and see where you guys are coming from. :biggrin
Anyway, I guess, I was just being emotional (buyer) about those highly potential investment properties being offered as “wholesale price” – from out-of-state places that I am very much familiar with and have visited in the past.
While those REO / foreclosures properties have clear pictures to show their conditions, most of them are being offered “As Is” and guaranteed of clear title, ACCORDINGLY.
That’s why I asked those “stupid” questions, even though I have already done my research of their FMVs and have computed their potential ARVs.
Oh well, I guess I should not trust those “wholesalers” since I could not see their title documentations or deeds before hand. I might just loose my earnest money during the process - which is supposedly contingent upon the result of the inspection of my hired inspector… correct?
Anymore, alternative?
FROM THE OTHER THREAD:
[QUOTE]I would not focus exclusively on “foreclosure” deals, but rather search for the best deal from a multitude of sources. Limiting yourself to any one strategy (such as foreclosures) simply makes finding the best deals more difficult.
Good Luck,
Mike
[/quote]
So Mike, where do you search for these “best deal from multitude of sources” based upon your own post from the other thread – do you use internet search engine or advertising, perhaps?
Please educate us with your expertise, Mr. Moderator.
Thanks
Due diligence involves way too many things, and it’s getting worse. Any title company can sell you title insurance, and your concerns with title are basically over.
When you read the real estate investment forums and books, I think that you will find mixed opinions about out of state investing. Some find it to be the only way to find desirable gross rent multipliers (rent to selling price ratios), others say that you should start investing where you live.
If you are familiar with an out of state market, that’s great. Are you familiar with the out of state laws? Many laws relevant to property management vary form state to state. I have a recent post called Eminent Domain Abuse, and, as we speak, a property in my area is being seized by the City from a landlord, because the City has a development plan, and they want to negotiate terms with him, or get him out of the way.
In some low income areas, buildings are being condemned and torn down. In this case a piece of property can be a liability instead of an asset (the government can charge you for demolishing a condemned building). These are unusual examples, but you should not be blind to potential problems.
Does the building have mold, asbestos or lead paint? Does it have termites? Does it have dry rot? Does it have fire damage? Does it have aluminum wiring or copper wiring? Does it have Galvanized plumbing or copper plumbing? Does the tenant have a meth lab in the garage? There are many problems that a good property inspector cannot find, or may not tell you about, since they do not think of them as pertinent to the inspection.
I have had other investors tell me that a property that is too long a drive can be a hassle every time a problem comes up. Imagine having to fly to the subject property. It might not ever come up, but it might, especially if you are a new investor.
Some gurus will say that you should not hire a property manager until you have managed the property yourself.
Go ahead and buy an investment property that you think has a lot of potential, but do not underestimate the amount of time that you must spend researching all aspects of the deal. All of your offers should have contingencies that will let you out of the deal (and have your earnest money refunded) if you find something that you don‘t like, especially in this market.
Bingo!!! Excellent advise. I appreciate your honest opinion. Yes, I am familiar that each state has their own interpretation of law with regards to applying “Eminent Domain” to an existing neighborhood (ie: in Connecticut area). However, I could have easily neglect that as part of my guideline in pursuing out-of-state investment. Another example: State declared condem properties while I am very much aware of it – was not in my written guideline.
But, more importantly, the other check/punch lists that you mentioned above, also, were not in my mind nor I would have been looking for - such as, the importance between aluminum or copper wirings and galvanized or copper plumbing. That’s the main reason why I asked and open this thead. Your opinion and advise are well taken.
Thank you once again.
Seve.707
Does it mean we will not have smores and Hershey bars??? :O(
Seve.707 - I am glad you came to your sense… Good luck! :O)
Senses are always there my friend. :bobble
I just don’t know whether those websites (REOs) offering wholesale prices are legitimate and trust worthy. I just want to make sure that they are not running a scam operation, that’s all. Of course, as a Financial Controller of a large hotel, I always do my own DD.
Thanks
Most of them are not “scammers”, but they are looking to take advantage of ignorant (uneducated) newbies and people with big dreams of instant riches without work. The vast majority of newbies pay too much for their property; don’t understand operating expenses or cash flow; lose a bunch of money; and are forced out of business is a relatively short period of time.
Good Luck,
Mike
I see your point much better now. I take, deep inside, you really care about those newbies. You just want to make sure that we understand the ins and outs of the RE business – whether take a hard lesson now and save money or disregard it and lose our pants later on, correct?
Don’t worry, I am sure a lot of newbies are smarter than other people think. Most of us just need practical guidelines (critical path) when persuing alternative ways of doing businesss in RE investment – using internet websites as one of the source.
You sound like a “godfather” who takes pride of his business - “take it or leave it” approach. Thanks for clarifying, no offense taken.
Seve.707