Advice On Where To Go From Here
I've made done several deals over the last year or so, and made OK money (8k, 23k, and 15k). I have tried the conventional route through realtors and listed properties, but we are in a pretty strong sellers market, and anything decent will get snapped up by realtors quickly (like less than an hour on the market). HUD repos are being bought at 95%+ of FMV. I've called banks about REO's but it seems they always list the properties, and, can get close to FMV, even with major fixers.
So...we have been focusing on trustee sales to find our deals. Trouble is, most properties don't make it to the actual sale, and those that do are bid up to the point that the margin is pretty slim. Deals can be had though, but there are not enough to keep us in business.
The direction I am thinking of going now is with short sales or subject to's. I have about 200k to work with; any advice on which way to proceed would be appreciated,
Thanks
Wow, your market situation sounds identical to mine, where are you located?
What area of the country are you in? Have checked the sight for bird dogs in your area. Do you know what the appreciation rate for property in your area is?
Subject to is definately the way to go. Catch people when they have to get out. In a hot market, you should be able to lease out or sell the property in no time and make a good down payment.
Hi bc1,
I think you answered your own question! If you are having trouble buying properties for the right price at the auction, hit the pre-foreclosure market with a massive marketing campaign. You'll find some of the NOD's that you can Sub-2 with a little re-instatement money, and others that will make perfect sense to Short Sale! If you have that kind of capital to work with, it will certainly help you to the next level faster!
Best of Success!
BAMZ
Hi all,
Thanks for the input. I am in central Oregon, where appreciation has been about 6-7% or so in the last 9 months. I have also checked the bird dog forum, but no one is in my area.
OK, so here is what I am thinking: for those properties with sufficient equity, and a homeowner in preforeclosure, attempt a subject to sale. lease option it back to them, with the option price such that I make 10k (is that too much?...too little?) What is the most effective form of marketing? some ideas I've gotten from this forum are 1. Knock on doors, 2. post cards and letters 3. door hangers
As far as short sales go, I geuss I have a hard time visualizing why a bank would want a sale that is enough below FMV to make it worthwhile. People do it, however, so it must work.
Thanks
BC1-
In general, it may not be a good idea to lease option back to a preforeclosure owner. If they cant pay the bank, they probably will have trouble paying you, either now or later.
A L/O would be agood exit strategy though for another buyer. I wouldn't limit myself to onyl making $10K, that kind of number doesn't get me excited at all. Make the number work to your benefit, you may be the only option a prefore owner has!
Short Sales . . . they do work, and can earn you a large paycheck. It cost the banks time and money to foreclosure, they are going to lose money regardless in most situations. It is your job to show them that the Fair market Value of the property is less than what they think. A soft BPO will escort your Short Sale Proposal to the finish line! Read more about them in both forums.
Best of Success!
BAMZ
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