What Is The Best System For My Area?
I live in a market that has very little appreciation2-3% on average Anyway, I have been doing the preforeclosure thing for about a year. The problem is that every deal I come across has a 1st with an LTV that is too high or a second that brings it way over the value in many situations. Not a lot of 70% deals here in my area, even if I can get a discount on a 2nd mortgage. My experience has been so far that 1st mortgages are only giving me 3-5% discounts on a good day. Perhaps I should be able to get bigger discounts on firsts, but to date most of them are pretty firm and I have researched and spoke to banks at least 100 times over the past year.
My thoughts are this: Either I have to figure out a way to get 1st mortgages discounted or I need to find another system for doing REI in my area. If there are others here who are doing REI in areas that have little apprectiation and have found a system that is constantly bringing them deals, let me know. I have done about 6 deals, but for the work I am doing it seems that I would be generating much more profit. I have thought about getting these subject to the existing financing and doing some more creative stuff, selling to buyers with bad credit/no credit. I also see a lot of risk in this, compared to just flipping the properties for a quick buck.
This is my dilemna [ Edited by godaddyo on Date 01/12/2004 ]
Your best bet is to move. California seems nice
godaddyo,
Where are you? It's kind of hard to help, not knowing where you are looking to get into CREI.
If you read your post the answers to your problem is there. Don't do what you're doing now. For many years I lived in an area where the appreciation rate was never over 3%/yr. But, it was steady year after year.Hence, time will make you rich.
Holding over-encumbered properties over time will be O.K. you just can't invest much ( if any) money into these properties. If there's no equity in the property there's no cash to the seller. Just take the deed.
Everyone has to pull money out of their portfolios from time to time so a flip every now and then is needed, but quick flips is not the road to riches.
pejam,
I live in OHIO...
SammyVegas,
I get what you are saying. That is what I am thinking of doing, which is a revamp of what I am currently doing. SO, instead of looking to make killer profits on a flip, I may be better served just getting those deeds and doing creative things to earn money on those properties, especially if I am getting the sub 2, then I have unlimited finance potential and I can always fall back on conventional when necessary. It seems that the real money will be made finding tenant buyers in my area, as opposed to quick flips for cash..If I am wrong about low appreciating areas, someone please let me know
GoDad..
What part of Ohio? I am in SW Ohio and am in the same boat as you. Would be happy to share experiences. PM me with the info.