I'm baaaaaaaaaaaack....well, actually, I never left! (long) - Posted by Kathie E.

import · November 29, 1999, 10:53pm

Posted by JohnG on November 30, 1999 at 09:28:07:

Its doing the same thing over and over and expecting different results.
If what you have been doing doesn’t work, then stop it. Go and do something else.
This may be a case of being real busy doing the wrong things. One thing I get from your post, besides your ultimate frustration at “spinning your wheels” is a great determination to get ahead for you and your family.
This is the main ingredient.
Most of us spend way too much time on the “how to” and not enough on the “why”. You know why you are exposing yourself to all this frustration and humiliation. That is a great place to start from.
Next point - you mention your own credit and the difficulties there in financing. This is not where you should be. Get Ron Legrands course on Lease Options; Wholesaling and For Sale By Owner. You do not need to spend your own hard earned money and use up your dwindling supply of credit.Do lease optionsand flips; and one really great place to start is wholesaling to rehabbers. Find a great deal where you can make 3-5K for tying up a property for a few days and then flip to a busy rehabber.
Keep on keeping on and this machine will work for you. Its great when it all comes together.

import · November 29, 1999, 10:53pm

I’m baaaaaaaaaaaack…well, actually, I never left! (long) - Posted by Kathie E.

Posted by Kathie E. on November 29, 1999 at 23:53:13:

:::::::::::::sigh:::::::::::::::::::
We are getting soooo discouraged, folks!
My hubby and I have read numerous books, all of the articles on this site, all of the daily posts to this site and have attended the weekly sheriff’s RE sales for months to observe the “pros” in action. While shopping for a home equity line of credit, (remember? our current home is in a 70% equity status right now…)we have found that most brokers promise us their new 125% equity lines and the banks are singing the same songs, but when they get down to business, they just GIVE us the “business”! We now have a broker offering us 80% of FMV, which will give us enough money to buy our first and possibly SECOND investment property, and not require us to begin making payments on a loan until we FIND them.
Here’s a major problem:
We’ve noticed that the properties that are offered for sale at the auction have been “sold back” to the plaintiff nearly EVERY time! We subscribe to the local Daily Reporter that lists the sales and who the plaintiff is and how much they “paid” for the property at the sale. Our question is WHY these homes aren’t being bid on when the room is full of investors who we are CERTAIN are winning the bid on a few properties weekly that are in the higher-priced markets. One home in particular is just south of where we live and in a really nice neighborhood…it was bought back by the plaintiff (the bank) for a 2/3 (opening) bid! No one went for it and it was a WONDERFUL rental property! We understand that it is a buyer’s market right now…investors are in a position to be more choosy about what they bid on, but we can’t understand what’s happening here. We contacted the bank about that property and, as usual, NO ONE knew anything about their REOs or who to contact regarding them. Also, the first few weeks of observing the sales, most properties were purchased by investors…now, we notice a steady rise in the plaintiff winning the bid and most for the opening bid at that!

GRRRRRRRR!!! We have been trying to break into the business for over a year now and spending every free minute that we find gathering all of the info that we can to make it happen. When a curve-ball like what we’ve been witnessing has been thrown at us, we feel like we are back to “square one”.
Are we missing something here? Also, our FICO score has taken a beating due to all the equity-line/loan shopping we’ve been doing…no one wants to give us a pre-qualification based on our stated income and all have wanted to pull credit reports on us which, as you all know, reduces the score horribly! I think we have done more to hurt ourselves than help and it may be a long time before we can make our dreams come true. Meanwhile, my husband works like a dog to provide a great life for me and our children…I wish I could do something to help us break into this business!!!
Thanks for listening…if I didn’t get this out, I’d have screamed and awakened the entire house tonight!
Best wishes to all…and hope you all had a great turkey day…
Kathie E.

import · November 30, 1999, 3:08pm

If at first you don’t succeed… - Posted by Carmen

Posted by Carmen on November 30, 1999 at 16:08:58:

Stop! Try something else!

I agree with JohnG on this one. You seem to be limiting yourself to only buying at Sheriff’s auctions. Why? These are not the motivated sellers that creative real estate is based on.

Those sellers will be found by calling the ads (for sale and for rent) looking for someone who just HAS to get out of their house who will deed the house to you; or who will Lease/Option to you; or who will accept owner financing; or who will split the equity with you; or who will otherwise make it easy for you to “control without owning”. You will find the deals in the sellers who are entering the foreclosure process who value their credit and just want an out and will deed the house over if you make their payments for them (you will find them at the county courthouse). You will find them in the ugly, beat-up houses with the weeds growing out front, whose owners are out of state or too sick or elderly or just disinterested in making anything of it; but if you make them a cash offer (from a hard-money lender), they would take it. Or, you could find a rehabber/investor in your area who would gladly pay you your $3K fee if you find and then assign this house to him, at 65% of FMV. Or you could buy one of them wobbly boxes for $1,000 or so, and get your start this way, selling it for $500 down and $250/month for 24 months, owner financed.

Or better yet, get them to come to you. Get the word and your name out - hundreds of gaudy “I buy houses” business cards at the post offices, the laundromats, the dry cleaners, the grocery stores. Cheap “I buy houses for cash” ads in the Pennysaver ($40 for a month!) Flyers you pay your teenagers to distribute door-to-door (avoid the mailboxes! you could get fined)to work a “backwards” deal (find the buyers first, the houses after, and flip to them retail).

Or… well, you get the picture. There are a hundred ways to get started - don’t get stuck in one mode.

Read the articles here and try a few of the techniques. You should be able to start your REI career with very little money up front, and no credit, if you want to. You can always try something new, and find your “niche” once you’ve tried a few of the techniques first. It may be that, in the end, you are happiest buying homes at Sheriff’s sales with your own cash after all - but by then, you will have a slew of new tricks up your sleeve to handle any number of situations.

Good luck!
Saludos, Carmen

import · November 30, 1999, 10:21am

Why??? - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on November 30, 1999 at 11:21:59:

Why are you limiting yourself to only BUYING properties at Sheriff’s sales? You mention that you are strapped for cash. Thus the need for the home equity line. Why not get to these properties before the lender forecloses and the property goes to the auction? Get the seller (who is usually very motivated at this point) to lease-option the property to you. You don’t pay any money down. You can lease-option the property to a tenant/buyer. Get some option consideration, and net a monthly cash flow. This method comes from Ron Legrand’s materials.

Also you mention that a property was bought for 2/3 of the amount owed. Do you know what the property is worth? Nowadays, many people owe much more than what a property is worth, so 2/3 of the amount owed may not be a bargain.

I can see from your post, you want to get into landlording. Believe me, I own 13 rental properties, and have for over 2 years now. Rentals can wear you out, both mentally and physically. Nothing can take the wind out of your sails like returning to a property that you fully rehabbed 6 months ago, and it is trashed.

Don’t limit your possibilities only to buying properties at auction and renting them out.