Posted by Shenesa on May 18, 2000 at 14:42:51:
You Go Girl!
Yes it is excitement because I feel the same way. Haven’t done a deal yet, but having fun learning and calling on ads.
Keep up the good work.
I’m cheering for ya!
Much Success,
Shenesa, NY
See, I have three paragraphs Eric:-)
No deal yet but still trying ( sorry for such a long post) - Posted by Stephanie Freeman
Posted by Stephanie Freeman on May 18, 2000 at 12:28:14:
First, thanx to everyone who has responded to my posts in the past, I have been trying to get a first deal and so far nothing, I wrote before asking advise on a FSBO home but so far this guy is firm on his price. I drove pass the property and its still for sale, He wanted $30,000 and he was willing to hold a second for $10,000 but through everyone’s advice with a hardmoney loan and second with him for 3 yrs the deal is too skinny just incase unexpected thing crop up,(like paying him his 10K when the ballon is due and the hardmoney), I’m rethinking this one but again thanx so much for pointing that out for me I could of made some costly mistakes. I’ll call him in a week or two and re-negotiate my offer, maybe offer a higher interest rate on his second for a longer term, and ask if he will lower his price. Maybe he’ll change his mind when he becomes truly motivated I’m hoping he will since he lives out of state and the house is just sitting empty, but for now I’ve moved on and need to ask a few questions about a house I just saw its a foreclosure sale listed with a realtor, the asking price is $17,900 all cash As Is, I ran some comps on domania.com (AKA) homepricecheck.com and the houses on either side have been assessed at $44,500 and $39,500. I drove by and the outside looks pretty good it has a deck, 2 bdrms 1 bth livingroom, kitchen & diningroom. My question is since I don’t have $17,900 cash and my credit is ok still rebuilding it, is hardmoney the way to go and should I offer the full asking price of $17,900 if I like what I see this weekend, or is it safe to offer less, I am not sure since it is already greatly reduced. I am still new but constantly trying to make something happen.
Hmmmm… - Posted by JohnWe (NoCA)
Posted by JohnWe (NoCA) on May 18, 2000 at 16:35:09:
Good instincts on the 1st deal…forget about it for now. He’s not motivated enough yet.
The second deal…smells bad, but you need to get your feet wet to build your confidence. Understand that mistakes are going to happen…but you get better with every deal. Don’t get caught in analysis paralysis, if it seems right, just do it. You’ll learn along the way!
If you’re wondering, the reason why I think it smells bad is because there’s a realtor involved. I don’t have anything against the profession as a whole – but DON’T TRUST THE REALTOR FOR ANYTHING. His job is to sell the house – that’s it.
And…never pay what’s offered by a realtor (you don’t know). In fact, it would be best to negotiate directly with the owner if possible. You have no leverage with the realtor.
With all that said, if you think it’s a good deal, and you’ve done your due dilligence, just do it! Your margins should protect you from getting hurt. Just make sure you KNOW what you can sell it for, and you KNOW how much money you have to put into the deal, and you know how much profit you want to make. After all that, if there’s still about 20 - 25% margin for error, you’re okay.
Good luck!
Re: No deal yet but still trying ( sorry for such a long post) - Posted by eric
Posted by eric on May 18, 2000 at 13:24:10:
First, cut down on the caffeine. Second, try paragraphs.
Like this, see?
I would say you have the right idea on the first one, follow up is key, but don’t get hung up on one thing, just move on ahead, and call back every 30 days or so.
On the second one, I think you’re going to get a lot of “need more info” responses. Is 17900 a good deal, should you use hard money? I don’t know - what’s it worth, in fixed up condition? Don’t go by assessments, go by comps, actual, recent sales. What’s the condition like? What are you planning to do with it, flip it, fix it, keep it? The answer depends on this. You mentioned the house is in foreclosure. Are there any other liens or encumbrances besides the mortgage? Hint: betcha there are, people usually stop paying their mortgage LAST, long after they stopped paying other debts. Think about it.
Re: No deal yet but still trying ( sorry for such a long post) - Posted by Stephanie Freeman
Posted by Stephanie Freeman on May 18, 2000 at 14:25:56:
Eric,
It’s not caffine, just excitement! As far as underlying debt, isn’t this something the lender who forclosed can tell me. I plan to speak with the realtor on Saturday about comps, my guess is he would know what properties have sold for in this area. I would like to buy and hold as a rental if all goes well. I’ll post again when I know more, but was just trying to get a feel for what to expect.(-: one paragraph) smile.
Re: No deal yet but still trying ( sorry for such a long post) - Posted by Ben (FL)
Posted by Ben (FL) on May 19, 2000 at 08:02:50:
Please, please, please…
Do NOT go on comps the Realtor gives you, alone. There’s a chance, a small one, that they are that rare breed of Realtor that actually cares about people, likes to help people, and gets satisfaction from helping others…VERY RARE.
What’s most likely is, they will find the 3 or 4 comps that make the property they are selling look the best, even if they have to look in the next subdivision.
Here’s what I do. First I go to www.iown.com and get all sales wihtin 0.2 miles of the subject property. If there are none, I go out to 0.3 miles. Then I go to the County Appraisers website and check every other property on the same block on the same street. If a property sold within the last 5 years, or so, I record the address, sale price, date, square footage, and whether it has any extras like pools.
I’ve read in articles in the paper, and stuff by lenders and the Chamber of Commerce that, on average, property appreciation has been about 6% in my area. What I do, then, is conservatively apply a 4 to 5% appreciation to all those houses sale prices that sold wihtin the last 5 years to adjust the price to this year. For example, if the house sold for $50,000 in 1996, then I do the following calculation: $50k x 1.05 x 1.05 x 1.05 x 1.05.
Then, I divide the number I get by the square footage. That gives me a price per sqaure foot. I do that for all the houses I listed and all the ones that showed up with www.iown.com. I take the average of the the “prices per sq. foot”, then multiply that average by the footage of the subject house, and BAM, I have my Fair Market Value.
If one of the values that you are averaging is way out of line with all the others, don’t use it.
So far, I’ve been within a couple thousand dollars, if not right on the money, 8 out of 9 times when compared with a certified appraisal from my bank’s appraiser using this method. The time I was off, I was only off $5k.
Hope this helps. Email me back if it’s not clear.
Re: No deal yet but still trying ( sorry for such a long post) - Posted by Anne-ND
Posted by Anne-ND on May 18, 2000 at 15:18:38:
Stephanie,
No, the lender who foreclosed will not necessarily tell you about other liens on the property. They may not even know about them. Get thee to the courthouse and do the research yourself to be sure.
Also, don’t depend on the realtor for comps- your best interests are probably not their top concern. They want to sell the house, and they may not be that well informed themselves, even if they do have access to the MLS.
You need to do your due diligence to protect your interests.
Good luck,
Anne