Posted by Jonathan Mednick on October 28, 2003 at 09:14:40:
Tom,
There’s an 800 number. Call them and ask for the URL. It is buried on their site. For details on REAP, please check some of the other responses I posted regarding this subject. I outlined it for others who asked them same questions.
Best,
Jonathan
Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 08:38:55:
Hi all,
Just wanted to let you know of my latest deal. I recently completed a short sale on a property. Judgement on the property was $144,000 and the bank agreed to net $103K. Flipped $3K to the homeowner who was happy I got them out of foreclosure. Took me two months to renovate it. With closing in/out and holding costs, I am into it for about $133K. Just had the house appraised at $190K.
Took out an equity line of credit secured by real estate with Bank of America at 4%. Bank gave me 95% of the appraised value - $180K. I have a credit score over 700 and have done biz with the bank before which was why they were generous. It’s an interest-only loan for 10 years.
My payments are about $1200/month.
I love short sales but it takes me about 3-4 months to complete and there is a lot of paperwork involved.
A lot of folks ask me how I find out about foreclosures. I get the list from the county courthouse via their Web site, check the numbers on mortgage software, check it on the MLS and if the numbers make sense, I plot my route on Mapquest.com then hit 7-10 properties each day, six days a week. Yes, I knock on doors. I average about 60-80 homes per week. People are usually nice about it and when they let me in to discuss their situations, chances are very good that I will get the property.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Barry (FL)
Posted by Barry (FL) on October 28, 2003 at 15:21:08:
Hi Jonathan,
Where in FL are you? I had a look at the website you supplied as that software sounds great to me. I couldn’t find anything they called REAP though, even did a search and nothing came up. They seem to offer at least 6 programs and I was wondering specifically which one you were talking about. I especially like the comps and not having to research a few different websites to glean all info to make an informed decision.
I’m in Volusia county and the online records are good but the tax assessor seems to be about 6 months behind on recent sales and without MLS access, I have to do some educated guessing in a fast appreciating market.
I specialize in foreclosure properties and having all that info in one spot would save me alot of time.
Thanks in advance for your reply. Please take nospam out of my email addy.
Kind Regards,
Barry (FL)
Re: Sweet Deal!!! - Posted by Mercy_Al
Posted by Mercy_Al on October 27, 2003 at 21:47:00:
Jonathan,
Great Deal!!!
How does the REAP mortgage software work? Also, how long have you been using this system…Sounds great
Mercy
Re: Sweet Deal!!! - Posted by tom kirby
Posted by tom kirby on October 27, 2003 at 15:47:59:
What mortgage software do you use, and how much does it cost?
thanx, Tom
Re: Sweet Deal!!! - Posted by Johnny
Posted by Johnny on October 27, 2003 at 13:55:20:
Jonathan:
AWESOME! One question for you that has been stumping me, how do you get the foreclosure info from the county website? can you be a little specific about that. I know all counties are different, but mine has so much info online and i just can’t figure out how to get good foreclosure info without buying sketchy lists online that are probably very old.
do you look for just back taxes, w/ the assessor or a full blown notice of default?
any help appreciated. Great job again, thats really exciting to hear about.
Re: Sweet Deal!!! - Posted by Curtis
Posted by Curtis on October 27, 2003 at 12:59:10:
Congats Jonathan,
Just one question, how long did the bank give you to close on the 103K short sale?? I am also looking to do short sales with no equity pre-foreclosure deals but would appreciate any feedback you could provide.
Thanks
Curtis
NY
Re: Sweet Deal!!! - Posted by Curtis
Posted by Curtis on October 27, 2003 at 12:58:29:
Congats Jonathan,
Just one question, how long did the bank give you to close on the 133K short sale?? I am also looking to do short sales with no equity pre-foreclosure deals but would appreciate any feedback you could provide.
Thanks
Curtis
NY
Re: Sweet Deal!!! - Posted by John V, FL
Posted by John V, FL on October 27, 2003 at 12:49:45:
Congratulations on a great deal. How’d you manage to get them to use appraised value? I’ve alwasy been told that BA always uses the lower of appraised value or purchase price + documeneted repairs for the first year after purchase. Also is your loan a variable rate at prime adjustable monthly? I’ve been with BA for ages and also have tons of money with them and 700+ credit.
Re: Sweet Deal!!! - Posted by DaveD (WI)
Posted by DaveD (WI) on October 27, 2003 at 10:53:56:
Nice job Jonathan
One question: Why are you waiting to sell? You just sunk 30k into it. It will never look better than it does right now. Why not take a quick (big) nickel instead of waiting for a slow dime?
-Dave
Re: Sweet Deal!!! - Posted by dimpil
Posted by dimpil on October 27, 2003 at 09:39:10:
Well that great!!
However, what kind of interst only is that? I hooked my mother up with a interst only on 185,000 for about 590 per month on the note for 10/20. Are you including taxes and insurance??
GREAT DEAL non the less!
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 28, 2003 at 05:16:02:
Mercy,
Let’s say that you are looking at a property and they are in foreclosure. They need help and want to get out. They might consider selling.
I access REAP and look at the mortgage history of the house. It shows me all the past owners and the current owners mortgages, if they have any seconds, thirds, how much they paid, how much their mortgages are, I can access their tax records, it shows me if there are liens, and I can look at comps. Basically, I get the detailed picture. I know how much they are into the property for and how much I am willing to buy it based on the comps.
So, if I see that the property is worth $150K and they owe $110K. I will offer them about $120K. The theory goes that you want to put something in their pocket. However, if they have no equity in the property, I explain to them the short sale. Not a lot of investors in my area do it because it takes time and they don’t want to learn. They pass on those deals but I never do.
Many times when I meet with a homeowner, I already know their history. When they ask me how much I am willing to buy their house for, I can tell them right there and negotiate instead of telling them I will call them back.
REAP gives gives you all the tools to know the history of the property so when you do get in the door, you already know what you are willing to pay, what technique you are going to use and what your exit strategy is.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:27:00:
Tom,
Forgot to mention that it is $129/month per county. Search for First American Real Estate Solutions using Google. The software you want is called REAP. They have every county in the US. Most all investors in my area use it. Call the 800 number and they will hook you up with their local rep in your area. You can download the software from their site.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:04:26:
I use First American Real Estate Solutions which provides the mortgage history, comps and everything else you need. Search for them on the Web and the product you want is called REAP.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:08:51:
Where I live, the county posts all the info on their Web site which is free. Not many people know about it and each county is different in what information they provide. The counties I work in Florida provide it for free. The moment a Lis Pendens (foreclosure notice) is posted, I have access to the actual document with the legal description. I then use First American Real Estate Solutions which provides the mortgage history, legal description, comps and everything else you need. I search for the homeowner’s name through their software, REAP. I then make sure that the legal description matches and then I know I’ve got the right person. I then check the mortgage history and the MLS and if the numbers make sense, I am in my car knocking on the door.
Best,
Jonathancheck the legal descriptiption
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:14:31:
Curtis,
I am usually fighting the auction deadline so each time I complete a short sale, it is usually a week or so before the auction. So, with this particular property, the bank agreed on a Tuesday and we closed by that friday. I already have my hard money lined up, my closing agent, title insurance, and etc. If you can close very fast and for cash, the banks are more than likely to agree. If you tell them that you need time to get bank financing and you need 30 days, you are dead in the water.
Actually, I had to put this property in bankruptcy 40 minutes before the auction sales to stop it and the bank told me I was the only one that was smart enough to do it. It bought me extra time to negotiate the details before the bank agreed, once I had the bankruptcy dismissed. I do this all the time and it works perfectly. You just have to make sure that you don’t threaten the bank with bankruptcy by the homeowner, that you are trying to keep them from going into bankruptcy.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:15:48:
Curtis,
One other thing, it was $103K net to the bank. The 133K is what I was into it for total with in/out closing costs, holding, marketing, rehabbing, etc.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 18:21:21:
John,
Friendly advice. I rehab the prop first, then apply for the equity line. They initially did a pencil appraisal for $145K, then I told them I wanted more equity. They asked how much more and I told them $180K. They then sent out their appraisal who then appraised it at $190K. The house is totally mint condition now. Had I applied when I got the property I probably would never have gotten the increase.
Luck would have it, the house next to mine sold this past January for $180K and that was something the bank used in its appraisal.
The loan is at 4% adjustable but with BA, they can’t raise it more than 2% in a 12 month period. So, if rates jump up 3-4%, the most I will pay is still 6%. If, in the second year, it gets bumped up to 8%, I would possibly refi the house.
Best,
Jonathan
Re: Sweet Deal!!! - Posted by dimpil
Posted by dimpil on October 27, 2003 at 14:26:06:
BofA will do appraised but it’s all about who you know.
Re: Sweet Deal!!! - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 27, 2003 at 11:57:26:
Dave,
Good question. The answer is pure greed. :>). Property value in this area is sky rocketing and I also don’t want to get dinged on 28% capital gains right now since I need as much cash on hand to do other deals. I offset them by renting it out and writing it off. I’ve got the cash available so why rush it?
jonathan