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Archive for the ‘Finding Real Estate Deals’ Category

Hello Everyone,

Hope everyone had a great Thanksgiving.  It’s back to work!

A couple weeks back, we made an offer on a great 3 family nearby.  It was recently rehabbed and de-leaded, rented with long term tenants and it also had a parking lot for extra income.   The cash flow would be at least $800 a month, depending on our financing.  We made a first offer of owner financing at 8% with a 10% downpayment (I looked at the on-line deed records and I thought the seller may have owned it outright).  The seller came back and countered with non-owner financing, he countered pretty close to asking.  We countered again for about 11k under asking. The seller came back asking about $6k under asking, but we said our last offer was highest and best.  We haven’t heard back, so I assume he’s not interested.  Our Agent told us that they also had another offer on the table, for the same amount (as our final offer).  Interesting, huh?   This one would have been great, but we’re not going to overpay.   The seller just bought this house back in April for $215k and wanted to sell quickly, but I guess he didn’t want to sell that fast enough, since he has it listed for $239k.   And I just got word that the house went under agreement today.  Another one bites the dust (cue the song).

Oh, and one of the REOs we made an offer on a while ago is back on the market again.  This means the property will be on the market close to a year and a half…and they wouldn’t take our offer?  These banks are really ridiculous.   I guess they want to go through another winter with maintenance, snow removal and the risk of  frozen pipes. 

In the process of looking at this deal, we talked to a lender about conventional financing for rentals. I knew this was a waste of time, since we are down to one income since my husband was laid off.  But, the guy I talked to was nice and suggested just going with my income, since I have long term job employment.  He was impressed by my (and our) high credit scores, but said my own debt to income ratio is too high to buy a rental, which I know, since we already have a mortgage and other bills.   But, I did talk to a couple of other hard money types that have been helpful.  There are some awesome people over at BiggerPockets.com (BP) that have been great.  BTW, if you are not a BP member, do join, it’s a great place to learn and connect with others.  The main sticking point is that we don’t want to take all of our reserves to use as a 30% (or more) downpayment, since that is a significant amount of money here with our local real estate prices.  So, I gotta figure out a way to make it work. I’m a little stuck in the private lending department, too.  It’s a long story, but with my 9-to-5 and the work I do, I do have SEC guidelines I follow with my day to day job, so private lending on the side is really not possible.  I need to find a way around this…I think I’d be ok with lenders with whom I have a previous relationship, but to seek out new people I think would not be possible.  I am still loving the PMBP course, and I knew my job would be an issue, but I may need to hold off private lending until I leave the job. 

So, in the meantime, we are still looking at REI and other ways of making passive and not-so-passive income…like getting back into eBay and stuff like that.  Anything we can do to make enough to pay our bills (to reach our “number” found in Shae’s Financial Freedom GPS), is what we need to do.

That leads me to my goals for next year.  I really need and want to be out of my job by next summer. I am willing to do anything I need to accomplish this.  I just wish all these things I want to do wouldn’t take as long as they should to happen!

Happy Investing!

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Amercian self-help writer Napoleon Hill (1883-...
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I just signed up for a motivational quote of the day by the Napoleon Hill website, naphill.org.  You can register for a quote of the day sent to your email box.  I even had the email quote sent to my phone so I have to see it daily.  It’s a great motivational tool.

And, since everyone is talking about Holiday shopping this week, here’s a great site for some Black Friday Deals!  I, personally, won’t be out with the people searching for deals at 4am Friday.  I’ll be shopping on-line for deals at home in my PJs, while still bloated from overeating at Thanksgiving, thank you very much!   🙂  The website has plenty of good store deals and also cyber shopping deals!

On a REI related noted, we have made an offer on a rental property with good cash flow and received a counter. Not sure if it is going to work, but I’ll post more when I have more news to share.   I don’t want to jinx this one!  In the meantime, if someone can recommend a lender that can finance a fully rented cash cow in MA, let me know.  A lot of local lenders are looking for really high downpayments.  Thanks!

 Happy Investing and Happy Thanksgiving!

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Things have been busy yet again this week.  With all the Halloween festivities and a super busy couple weeks at work, it was tough to get a lot of REI stuff done.  Even so, we were able to look at a few houses this week. One of which was on Monday night, but it was after dark, which is not a good idea, when the house has no electricity.  LOL!  Luckily, my camera got some good shots with the flash.  Although even though it was dark, we could still see the house needed WAY too much work. The listing said that 90% of the rehab had been done.  Yeah, sure…so I guess the other 10% includes  drywall, windows, floors, paint, etc! 😉

I also have been reviewing Shae’s Financial Freedom GPS.   It has some really great content.  Some of the things she talks about I have already thought about or are doing, but there are a lot of good exercises and time management strategies.  That’s the stuff I really appreciate – Shae had the same struggles many of us 9-to-5ers have – how do you balance a demanding job, family, kids, tons of other stuff and your REI biz?  I can handle all the “work” involved with REI.  I mean, I am really organized and determined, but just finding the time in a given week is so hard sometimes.  I swear, I could be kicking some serious butt if I didn’t have the 9-to-5.  And like Shae says in the book, I also hope and want and wish to get laid off all the time.   With my years of service, I’d get about a years severance pay, which would be pretty darn awesome.  But I digress.  Anyway, I also did the exercise of coming up with our “number” for financial freedom – this is the amount we need to cover each month for all our family/household bills.  If we can come up with enough passive income to cover this monthly amount  (with a bit of a savings buffer), we’ll be set and I can quit.    The only variable in our “number” is the cost of health insurance.  I added in an approximate number, but that could be higher or lower, since the costs can vary widely, especially for a family plan. 

By the way, I noticed this article over at Tim Ferriss‘ Blog.  It talks about being clear with your requests to your virtual assistant (VA).  While I agree with most of the info, there are things that need to be more detailed, especially if you’re dealing with offshore VAs.  For example, most of the world formats their dates in the DD/MM format, not MM/DD, as we do in the US.  Also, you need to be very clear regarding acronyms, abbreviations, nick names, etc.  In my “day job” we deal with this a lot and you need to be crystal clear with your requests/documentation, or they can easily be misunderstood.  For those of you that use VAs, what are your thoughts?

Happy Investing!

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Well, it was a slow week REI wise.  I had a really busy week at work and also was not feeling great.  Also, a lot of REOs we were interested in were no longer available this week.   I assume this is because offers were made, not due to the recent suspension of foreclosures.  We’re going to get going and look at more properties.  I am thinking we may need to start looking at less REOs, if the suspension of foreclosures becomes more widespread.

We also sent out the rest of the inheritance letters a few days ago.  We also sent follow-up letters to people who had contacted us as a result of the first mailing, but were not interested in selling.  I’m hoping to get some bites on those letters.

I also have been doing some private money research.  I was looking at the county deed records and noticed this one person’s name show up over and over.  Well, from what I can tell, this dude is a big time private money lender, lending to real estate investors and development companies.   I figure I can send him a letter asking him to see if he’s interested in investing with us.    However, I do want to be sure I’m SEC compliant and do things the right way.  I also don’t want to look like I was stalking him or something.  I need to check my PMBP course to see if there a letter template for such a scenario. I haven’t found it yet, but I only looked quickly so maybe I missed it.  I need to do  more research.  In the meantime, I thought I’d draft a letter saying something like I noticed he lended to other real estate investors and wanted to see if he wants to invest with our company.  Any suggestions would be helpful!

We’ve also been talking about changing our investing strategy a bit.  Not that we don’t want to rehab or wholesale, but we are also thinking about focusing more on rental properties.  We have seen a lot of good deals lately, so we have been looking at more multi-families instead of focusing on single family homes.

Have a great week!

Happy Investing!

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Remember the house that we were waiting forever for the Title V (septic) inspection (the same house that the bank’s listing Agent was “insulted” by our low-ball offer)?  Well, we told our Agent that even though they lowered the price to $159k, we were not going to increase our offer by an amount that the bank would accept, so this won’t be a deal.  Interestingly, I noticed today that the listing is now inactive, so I’m curious what the offer turned out to be.

We also looked at a couple more REOs this week.  One was pretty lousy and we’re not intersted.  Another house was a 3 family where 2 of the units were in good shape but the top floor needed a full rehab.  The first 2 floors were basically move-in and the rents there would more than cover the property.  Rehabbing and renting the top floor would be pure gravy, as cash flow goes.  The listing of this house had special stipulations that they were taking offers from owner occupants or municipalities (for Section 8, I suppose?), then after a couple weeks, they would consider investor offers.  The house is listed for $90k, which is a great deal for a 3 family. We’re hoping that we can make an offer on this one.

With the news of Bank of America suspending foreclosures, I think we may need to alter our plans for getting leads bit, since we look at a ton of REOs.  We are going to mail out the rest of our inherited list mailers and will be buying a new list soon.  I decided to buy a new list with more focus of certain zip codes instead of the entire county.  The “whole county” approach didn’t work well since some parts of the county are 45 minutes or more away and the areas are really out of our target farm areas.  I also have realized, though, that I don’t like talking to sellers all that much.  I think I’m good at it, and I should be since I have tons of years of customer service experience, but I just don’t like it. I much prefer vacant/REOs, but there’s a lot of competition for those.  Plus, fielding motivated seller calls during calls during business hours is not possible and my calls go to voicemail.  Maybe I can outsource the call backs or something.  We also don’t do bandit signs.  I know they’re effective but we really don’t have the time or energy to so it…and we also don’t have the time or energy to get slapped with fees, either.  The signs get pulled down pretty fast around here. 

I’ve noticed that the hours/days/weeks slip away and I don’t have enough time to do all that I need to do for REI.  Even with my husband helping out, there are some things I cannot outsource to him, and some things that are more more my specialty (like number crunching the deals).  Thank goodness he’s been a contractor and is still a licensed plumber, so those are the skills I really need from him! 🙂   So, anyway, I think I gotta start using a virtual assitant or two to help us out.  For those of you that are outsourcing things or using virtual assistants, which companies do you recommend (elance.com, odesk.com or others)?  Because I deal with outsourcing at my 9-to-5, I have some very hands-on experience here (and I have some very strong opinions on the topic!), but I’d like some guidance here for REI businesses. 

Oh, and since none of our offers got accepted, I didn’t meet Steph’s 30 day challenge to get a house under contract in September.  Can I get a do-over on the do-over? 🙂

Unfortunately, I have to work Columbus Day (boo!), but to those of you that are not, happy rest of the long weekend! 🙂

Happy Investing!  Happy 10/10/10!

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Photo of Bank of America ATM Machine by Brian ...

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I’m sure you heard, but if not, here’s today’s big news: Bank of America suspended foreclosures in all 50 states!

What does this mean to you and your REI business?  What about those of you doing short sales?

BTW, did you hear about the new Flip VIPs  program?  Finally an affordable mentoring/coaching program for Real Estate Investors!  It sounds awesome.  I might need to take the plunge!

Happy Investing (or maybe not?)!

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Georgian Colonial home of the Rev. Benjamin Wa...

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Still no word on our previous REO offer we made at the beginning of September.  The listing Agent did alert us yesterday that the list price would be reduced soon, which is was today ($175k to $159k).  However, there’s still no word on the Title V (septic) inspection, so that’s still in limbo. 

We saw a short sale house last Tuesday. It was listed at a super cheap price of $79k, so that drew in a lot of interest, especially since the ARV is conservatively around $180k.  In fact, when we viewed the house, there were 2 other couples there. It is a cute, older colonial home, 3 beds/1 bath.  The house was in a bit of disarray (think: Hoarders), but not in too bad of shape. It needs windows and such, but mostly cosmetics.  We put in an offer of $84k the night we saw the property.  Then, our Agent emailed us saying they wanted our “highest and best” by Saturday at 4pm.  We put in an offer of $103k and removed the part about the bank paying the closings costs.  We got word last night that we were outbid.  I wonder by how much?? 

We’re still getting bites on our inherited property mailing.  Seems some people held the letter over the summer and waited until now to call.  Hopefully a deal will come out of one of those leads. 

Another exciting bit of news is that I won Shae’s contest.  She posted a survey last week and she picked me to receive a free copy of the new product she’s releasing soon.  I’m so excited.  I cannot wait to get it because I really gotta move forward if I want to be out of my company by next July. 

We just gotta get a deal going soon. I know many people say is that it can take 20 or more offers to get a house under contract…but we’re getting pretty impatient. I am trying so hard not to get discouraged and I don’t want to throw in the towel, I want to and need to keep moving.  I know my husband was really disappointed we didn’t get the short sale house! 

I had such a busy week, especially at work, so I didn’t have as much time to review my PMBP course as I would have liked. I’m hoping to do that later this week, since I’m taking a couple days off from work. 

Happy Investing! 

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