Question, Dealing with a declining market

Foreclosures, Short Sales, Tax Foreclosures
1

Hello,

Up side is that foreclosure opportunites are on the rise but…

Things are beginging to go sideways in the LA market very fast. Even if I close a deal with say “40% equity, as compared to comps” by the time i go to sell say three months-market has droped by 15% (ie 15% of total price) my 40% equity is gone.

The only way to really protect against the current market price errosion is to initialy get a huge discount ie 60/70% equity but those deals are not born buy a market where HO are still believing in the last six months of sales figures…?

Any comments or ideas?

Thanks,

Aaron

2

Aaron, this is a great market =, great deals Buy, Buy Buy, dont sell yet use leases, then as the market turns (when ever that happens) sell, sell sell.

3

Hello

So, instead of looking to “flip” the forclosure hold on to it as a rental until the market starts to go up again. This sounds wise assuming that I (you) would only do (rental) cash flow positive deals.

What do you mean by lease (yearly rental lease)??

4

Remember, this is a great market, we will only pay up to 65% of property value, this insures pos cash flow, enough time for the change in the market. to then sell sell sell Thanks

5

Hello Derek,

Thanks for the insight. Are you in the LA market place?
If so can I email you directly with more questions?

Thanks,

Aaron

6

40% equity :cry: I have looked at dozens pre-foreclosures in Boston area and none of them had ANY equity. All are underwater or barely “swimming”.

I’d love to work a 40% equity deal…