I’m a straight up newbie to REI and just need to know how to protect myself in a worst case scenario.
Say I’ve found a house at $85,000 with an after renovation value of $150,000. I buy it using hard money, fix it up, put it in the paper to sell and have an open house or two. 2 months go by and nothing happens. Knowing that my hard money lender will be looking for their money soon, I’m desperate. There are a few home investors in the area that have signs like “We buy ugly houses” and “We’ll buy anything”. Should I consider selling to them? If so, what’s the average discount (and I’m sure they do) I can expect them to ask for? If not, what other options besides foreclosuredo I have?
Anyone who says it is easy is selling you a book. It takes a lot of risk and hard work. I just lost a condo that I could not sell for what I owed but just closed on another deal where we should have $50,000 equity after the construction is completed. I have another that is just sitting and not selling. I have made 7 payments.
My hard money lender requires 3 to 4 payments in advance. After that runs it it gets difficult. I just made the Oct payment yesterday on the one vacant house with draw funds from the current project.
The we buy houses folks probably will not even get at of the car unless it is a sweet deal with lots of equity. I could not even get a call back for the condo I lost.
I have no reserves and that is my problem. You should have funds to carry a project during slow selling times and bad rental markets.
Get the lendrs approval to rent the property before they loan you the money. One HML would not even let me rent out a duplex that I was going to do with them. I did not use their services.
One avenue to pursue could be purchasing raw land in the Branson, Mo. area. Once you research the area you’ll find that it’s one of the best places to own in America. Due mostly to low prices and rapid escalation of value. Certain areas and types of land are better than others, of course. I have one lot that will increase in value somewhere between ten and twenty thousand dollars within the next 12 to 18 months provided the golf course (rated the number two public golf course in Missouri)
goes private (this is supposed to happen in about 6 weeks and will cause the asking price of the lot to increase by about ten thousand dollars). The developer is MPI, Missouri Partners Inc.,
reportedly the largest developer in Southwest Missouri. (another VERY important thing to consider when purchasing raw land…MAKE SURE that the developer is not only honest, but has a good track record and deep pockets like these guys, so you don’t have to worry about them going belly up and you getting stuck with a piece of next to worthless land) MPI is also scheduled to put in a 30 acre lake within the nest 12-18 months which will also cause another price increase of about ten thousand dollars! Of course if you already own the land before the price increases come, and you sell after they come, you can see a handsome return on your investment, especially if you finance the purchase with only ten percent down!!! These are the type of properties and purchases I specialize in. I love them because there’s no muss, no fuss, no frustrations involved in playing the “Landlord Game”. You simply purchase the land, make the payments, and then sell after the asking price of the land goes up! If you’d like to see if there are any more lots of raw land like these available, just email me. I’ll be happy to help you if I can. Have a great day, and Happy Investing!
If you think you are going to put your house in the MLS and wait for some agent to sell it, forget it!
Here are some strategies I employ to sell my houses fast!
-Use an MLS Listing Service and offer 6% commission to the selling agent with a full-price offer. You can even increase the price 10% above market value. Watch how fast your house gets shown when you offer the selling agent 6%.
I have even offered 6% commission plus a $5000 bonus to the selling agent with a full-price offer, this works great also.
-Obtain a roster of all the agents in your area. You can simply look in all of the real-estate magazines at the grocery store and find out the names of agents and their fax numbers. ALso if you have any friends who are real-estate agents, ask them for their office roster. Go thru the MLS and search for the top selling agents, call up these agents and ask for their fax numbers so you can send them your properties. Then use a program such as WinFaxPro to broadcast a flier to these agents notifying them of your property and the 6% commission you are paying to the selling agent. I would also recommend sending a list of ‘Coming Soon’ properties. Using this strategy, I have sold houses before the rehab was even finished and before the property was put on the market.
-Offer no-money down! Use a program like Nehemiah or Hart.
-Put a huge banner on your property: “Buy This House, No Money Down” with your phone number. Make sure it is a telephone you answer regularly.
-Door knock the neighbors with a flier and ask them if they know of anyone who would like to buy your house with no-money down. Offer them a $2500.00 referral fee. They will spread the word quickly to their friends and family!
-Put an ad in your local paper:
3 bedroom, 2 bath, completely
remodeled. No money down
with decent credit. Call Today!
-Have your own Open House on a weekly basis. Sit in your house and show potential prospects. When you arent showing your house, you can read John “Cash” lockes course on 'Subject To" That’s What I do!
These are some of the strategies that I have employed to ‘Retail’ over 300 houses the past 10 years.