Now ed bare with me but I got a funny question, a hard money loan would only be utilized for a quick flip or rehabbing, correct? Also ed I need some assistance if possible, now I dont know how A personal purchase of contract is supposed to look as well as an addendum, if you got a n example of one that I can see and then tell me how to format it to suit my needs I would much appreciate it… The reason being I cant offer anything without my little papers in order. Ed one more thing as for making deals to sellers who wont carry paper, would it be wise to offer them maybe 2 or 3% more on their asking price and negotiate under my terms…
Ed I have an entire senario for you but first let me explain my history. Soon to be divorced, paid off wifes debts that were put on my account by her while I was stationed in Japan, trust me if I knew what she was going to do I would of protected myself alot better but I learned. As Of now I’m not sure what my fico is but am almost done cleaning up my credit. About 3 or 4 months ago my fico was 600. I recently tried just getting my feet wet and called up some agents listings. “Seller is motivated”, “Seller wants quick deal to move”, " Must sell owner carry w/20k down". Basically I’ve looked for the ones that are in my opinion highly motivated. I then asked the agents if the sellers were willing to carry a 2nd,all of them laughed at me, well not all but a couple. They all said that this market is very hot and that they wont carry cause they know they can get there asking or in sometimes get 7 or 8 bids at a higher. One agent told me that there hasn’t been a seller finance in the last seven years. I live in San jose, Ca Silicon Valley…
The properties that are listed are in very good neighborhoods, hands down and at good (low) prices. As for the other agents they wont even talk with me unless I have pre-qual paper. I dont have down money, closing costs, and have somewhat hurt credit. I am willing to go the length because I believe I can do this, I’m very motivated about rei and will be very dedicated I just need some assistance in the right direction. Also should I flip or hold my first deal, when starting out what is the best way for newbies.What do you think I should do? Your assistance would be greatly appreciated.
Hard to believe that the “Silicon Valley” type markets of N. California and elsewhere aren’t about to become problem areas. I mean I’m wondering about all those folks who were overleveraged based on the internet or other technology ventures. Some of the stock prices are down 90%. Even the market averages are down 40%. If the motivated sellers are not there yet…it’s just a questions of time. Don’t get too eager.
Posted by Ed Garcia on March 02, 2001 at 23:03:53:
Manuel,
There is no question that the Silicon Valley and parts of Northern California is a tough market. I just did a $400,000 loan on small 3-bedroom house that appraised for $600,000.
Manuel, I can’t believe that, that market is going to continue at the pace that it has. I know that everything is relative, but that area is ridiculous. I feel in the next few years that it’s going to bust.
Mean while back to your question. If you’re going to be a real-estate investor, Realtors are the last people in the world to listen to. Their mentality is retail sales. So what would you expect them to say? When we as investors tell them what price we want to purchase a property at, they tell us that we’re unrealistic.
I have a cousin who is building 5 houses in Northern Cal who is making a killing. So looking for dirt to build, or property with upside potential, is what you have to do.
Property with upside potential could be a 2-bedroom house that you could ad on another bedroom making it a 3 bedroom. A property zoned R 4 with only one dwelling on it, a teardown, and rebuilding, a condo conversion, etc. As far as there hasn’t been a seller carry-back in 7 years, that’s b/s.
thanks alot jpiper, its not that this market or the silicon valley intimidate me its just that they are serious animals when it comes to real estate, basically if its below 500,000 then you are in for a tough bid against some engineer that probably has plenty of money in savings and stocks not to mention whatever he can qualify for. The market is just solid around here.
first of all thank you for responding, I appreciate it. Next thing is this, I’ve been looking into properties to possibly add on and let me just say this, licenses and inspectors are beyond expensive and out of a newbies reach. I would really like to get into whatever I could. Ed it is a difficult market for an investor maybe thats why I havent really seen any serious investors out here or in the bay area for that matter. But I will remain looking and trying my seller finance who knows there just might be one waiting for me, and as for the agent saying no seller carrying I didnt really believe it either.
I know you think your market is solid there. I don’t think it is. Weakness is coming in your area. Takes a while for a guy that just lost his money in the stock market, to miss a few payments, for the banks to foreclose. Everything doesn’t happen at once in the real estate business. Re-read my post. Start looking ahead.
By the way, I’m giving you the Oklahoma Guarantee on my prognostications. If you don’t know what that is…ask someone in Oklahoma.
JPiper
Posted by Ed Garcia on March 03, 2001 at 09:41:23:
Manuel,
There are some serious investors out there who are making money even in this overpriced market. The serious investors have money and know the market. They’re running adds, making low-ball offers, and doing as I suggested in my previous post. But as Mr. Piper said, it’s a matter of time before the bubble burst.
Manuel, I don’t know how much time you’ve been spending working in the market, but if you’re a part time newbie investor with no money and credit problems as you indicated, I agree it’s going to be tuff. Tuff, but not impossible. Personally, I think I would go to the rural areas and do some shopping. I’d go more inland. I’m willing to bet you’ll find some deals there. If you need hard money, I’d be glad to help you.