Posted by Kristine-CA on February 01, 2002 at 13:24:44:
Nope, I’m not landlording from a distance. No interest right now in landlording, rehabbing, lease-options, etc. And, yes, I drive to the areas I work in and look for vacant houses and check on houses that I’ve found through research during the week. I’m trying to do wholesale flips. Have two under contract, with buyers lined up. Did a tax sale property before that (over a year ago) and decided that doubling my money was great, but it was a hard and limited way to find deals. It’s taken me the last six months to find areas where deals I can figure out are located. I’m good with the research and finding the deals, but my creative financing skills are pretty limited. One of my flips is supposed to be a double-close if all goes well, so that would be nice. Otherwise, it’s cash and re-sell.
Riverside might be ok, but my guess is that a lot of those deals are going to be low to no-equity deals, requiring subject-to and lease-options. But there always deals out there. I just prefer to be looking where everyone else isn’t looking.
I recently came across a property in the MLS that has been there since August. It is a 2/1 house in need of a roof, garage door, paint, and who knows what else. The house is owned free and clear by four people, one of whom is living in the house (I suspect that they inherited the property). My agent spoke with their agent, and found out that these people can’t agree on anything. They won’t help in the financing. The property is listing for around $450K (relatively cheap for this area). I found a rehabber in the newspaper who assures me that he can close properties in two weeks with cash; I’ve only spoken to him over the phone, so I don’t know this. I’m looking to make an offer on the property, and I was thinking of offering $325K for cash (hopefully the rehabber will come through) and a quick close (and subject to inspection, etc.). I don’t expect them to accept this, but I was thinking that this would get them talking and give me a better idea of what they might take.
For my entertainment, and possibly others, can you tell us what city/state you are purchasing this property in? It is very interesting to see 2bed/1bath homes, that need repairs, that still can get a $325k price tag. While I love seeing low priced $10k fixers in Pennsylvania, I also love seeing the higher priced fixer uppers too.
Verify the rehabber you are considering selling to will do deals valued this high. You do have an out though with the inspection clause so you can get inside the place to see if there is anything else you may need to fix. Try to get an estimate of what repairs, and their costs, may be so you can tell the rehabber. They will still want to get inside for their own verification, but try to get as much information as you can while inside.
Put a date a couple of weeks out for the inspection release to take place so you can get in to see the place, and you can come back with your rehabber. You don’t want to commit to $325k if your rehabber doesn’t want it, and you don’t want to rehab it yourself.
Actually, they’re asking around $450K, and it is conceivable that in enough time that they will get it, even though the house is essentially a “shack”.
I live in the “South Bay” in the Los Angeles area, which consists of the cities of Manhattan Beach (median home price $675K), Hermosa Beach (median price $500K, and Redondo Beach (median price $380K). The average amount of time from when a home is listed until it is sold is 24 days. Which, at least so far, has made finding bargains extremely difficult. So far, none of the techniques that I’ve read about apply to an area such as this - at least on a consistant enough basis to make a decent living.
The rehabber is in this area, so I expect that he won’t have a problem; it’s just that I don’t know that he will do as he says. I have put in some “escape clauses”, so I shouldn’t get stuck.
I’m sort of at my wit’s end trying to find houses that I can buy at wholesale prices in this area. Any suggestions would be welcome. As it is, I’ve started looking in Long Beach, where there is more inventory and prices are more reasonable (well, relatively speaking).
I’m an investor in developing two side-by-side lots (each 50x150, which is BIG around here) that are three blocks from the beach, in a nice neighborhood. Each lot has a small shack of about 800 sqft (which we’re going to scrape), and cost us $500K EACH (a steal!). We’re putting two townhomes (2500 sqft each) on each lot, which will sell for around $725K each.
Re: Need an offer strategy ASAP! - Posted by Kristine-CA
Posted by Kristine-CA on February 01, 2002 at 10:38:51:
Brian: regarding looking for deals in South Bay:
I live in Santa Barbara and I stopped looking at things in this county and the surrounding coastal areas about six months ago. May I suggest you take a drive inland? Victorville and Apple Valley have been appreciating quite nicely and continues to be a market for new and existing homes. In fact, any of the areas in San Bernadino county that have both decent commuting distance and some kind of local employment economy are expected to grow. And there’s plenty of activity right now.
Just my opinions of my searches in CA thus far… Sincerely, Kristine
Re: Need an offer strategy ASAP! - Posted by BCat (SoCal)
Posted by BCat (SoCal) on February 01, 2002 at 12:50:43:
What techniques for remotely locating properties works for you? Signs? Ads? Please don’t tell me you have to drive all the way out there, and drive the neighborhoods! How many deals are you doing each year? I was thinking of looking inland around Riverside.
When you find a property, what are you doing with it? Lease-optioning? Flip? Are you landlording from a distance?
