WANNABEs or TRUE BLUE REIs!!!!!!!!! - Posted by Dfree

Posted by RichV(FL) on September 23, 2003 at 18:18:49:

Tampasteph,

Things are slowing down a notch here also. The rental market is very soft right now. I’m seeing alot of ad’s running for weeks on end.

It maybe a good time to call some tired landlords. :slight_smile:

Regards,

RichV(FL)

WANNABEs or TRUE BLUE REIs!!! - Posted by Dfree

Posted by Dfree on September 23, 2003 at 15:24:55:

I’ve been thinking about this for about two months now.
I often check the REI ads and the bandit sign messages just to check up on the competition. Of late I’ve been seeing a strange or not so strange occurence and it’s made me pondering a few things.

The question I pose is How many Investors were really out there and really dedicated to making their livelihood in REI(TRUE BLUE) and How many out there were just thinking it’s another get-rich quick scheme(WANNABEs).
Here’s What I’ve began noticing.

In my market it appears to be the majority sweeping to the later (Get-Rich Quick). Less than a year and a half ago my market was flooded with “Investors”, Bandit Signs everywhere, Ads in every paper from the PennySaver to the Chronicle. Bank REO’s being sold for 90% to 95% of FMV. Investor Lease Option & Owner Financing Signs speckled throughout neighborhoods, Homeowners facing foreclosure negotiating and/or holding bidding wars. Total Investor Chaos.

However Of late I’ve noticed a significant fall off in a few of those areas.

Bank REO’s remaining all the MLS for longer periods of time and selling at or about 75% of FMV. I’ve only seen very few bandit signs (could be City)and many of the ADs are gone and the ones that are left are disconnected numbers, no longer in service or some guy’s cell phone not expecting a RE call. To sum it up a fellow investor had a home go in foreclosure and he said he only received letters and mailouts mostly from BK lawyers only two investors.

Now Mind you This could just be my views or observations but I was wondering if this is happening in any other markets.

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by Kristine-CA

Posted by Kristine-CA on September 24, 2003 at 24:58:13:

I don’t know if it really matters whether or not investors in my area are in it for the long haul or they are in it to get rich quick. All I know is that they are competing buyers (but mostly at closer to retail prices). And because this is central CA and many investors that live on the coast have only so much capital, this is where they are coming.

I see lots of people trying marketing that they buy houses and doing lease/options–they will only last so long because the money’s not that great here. Maybe it’s because this is CA, but I’m not seeing any decline in sales activity where I am.

Sincerely, Kristine

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by Rob FL

Posted by Rob FL on September 23, 2003 at 19:46:30:

Your observations appear to be true from what I see. Alot of stock market and recession bail outs jumped into REI because it was the next fad. The stock market can’t be trusted and their jobs can’t be trusted so now they turn to real estate. Now that the economy appears to be turning around, the people who had their 6 or 12 months to struggle and fail in the get-rich-quick REI schemes are starting to disappear a little.

It’s a great business to make money in, but it’s an easy business to quit. Little investment equals little commitment.

Try hiring a carpet cleaner - Posted by Jack

Posted by Jack on September 23, 2003 at 17:37:30:

If you have ever tried to hiring a carpet cleaning company out of a two year old yellow pages book, you will know that 2/3 phone numbers in the ads don’t work anymore. And that is a business where the owner must make a capital investment of few thousand dollars upfront. Most wantabee RE investors don’t put more than $500 in up front costs into their business, hence less than 10% of them last a year. My personal observation over the six months that I have been taking illegal ‘i buy houses’ Sleaze Ball Signs (that reflect poorly upon me as a law abiding RE investor) I have seen more than dozen different phone numbers on the signs. Regarding mailings, most investors will not blanket mail to ever foreclosure. Most investors will filter by location and year.

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by tampasteph

Posted by tampasteph on September 23, 2003 at 16:32:54:

I think it goes in cycles. If you pay attention to when there’s a big REseminar in town, you will see an increase in bandit signs and ads in the paper in the weeks following.
The other day I had a seller call trying to get someone to take over her payments. She told me she called most of the “We Buy Houses” ads in the paper (there are a lot in the Tampa Trib), and I was the only one who actually returned her call. That was good to hear.
Steph

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by Dfree

Posted by Dfree on September 24, 2003 at 14:15:35:

“It’s a great business to make money in, but it’s an easy business to quit. Little investment equals little commitment.”

This reminds me of a conversation I had with my brother who’s a senior loan officer/underwriter at a very large Tx based Lender. He told me about a meeting in sat in on, where they were discussing the surge in Foreclosures and ONE of the major reasons was too many new homeowners with too little investment so easier for some to just walk a way. Basically homeowners getting new construction or fairly new homes and closing with as little as $1k to 2k in costs.
Little or NO Investment equals Little or No Commitment

P.S. He also mentioned that they feel Foreclosure might become the equivalent of what BK was some years ago. Remember a person w/ a BK couldn’t get anything, know that’s not the case. Likewise some years from now when a nice percentage of individuals will have had a foreclosure on their records it won’t have the same impact as it does know.

Re: Try hiring a carpet cleaner - Posted by Brian

Posted by Brian on September 23, 2003 at 19:28:54:

Just wondering why you say the bandit signs are sleazy…Illegal in some places yes but, sleazeball well thats just silly…Signs don’t make investors sleazy…Lack of ethics do, greed somtimes and even ignorance. It is however a great way to advertise in places where it’s legal and I highly doubt that you would drive by a remax sign in someones yard and say that it reflects poorly on you as a law abiding investor, and we all know that many many realtors are a bit sleazy. So perhaps you should consider what you say a bit more before slaming…Just a thought and happy investing

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by kgreen

Posted by kgreen on September 24, 2003 at 07:11:18:

I understand, I have to keep taping mine together for a while longer. I also believe Rich is right in his observations. The real estate market is very fluid and always changing. And like anything cyclic, when you have high spikes in market activity the “get rich quick” guys will always appear. The good news is that whent he market shifts the will also disapear. (to some extent)

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by kgreen

Posted by kgreen on September 23, 2003 at 16:47:46:

On the down side you were last on the list. May need to update your advertising.

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by Rob FL

Posted by Rob FL on September 24, 2003 at 19:18:30:

100% financing with seller paying all closing costs has become a rage where I am at. Often case the homeowner also gets an ARM loan and a huge pre-payment penalty. This crazy lending make me reminiscent of the late 80’s and the Resolution Trust Corporation. Sounds like an investor goldmine in a few years if all this crashes and burns, but what do I know?

Re: Try hiring a carpet cleaner - Posted by Semore Ovboius

Posted by Semore Ovboius on September 23, 2003 at 22:12:50:

He said he removes ‘illegal’ signs.

Re: WANNABEs or TRUE BLUE REIs!!! - Posted by tampasteph

Posted by tampasteph on September 23, 2003 at 16:59:15:

She didn’t say I was last on her list, or the last person she called. She said I was the only one that returned her call.
But you are right, the money I get from the deal I just signed (my first) is all going towards advertising. Most of it, anyway. I need some new shoes, too.
Steph

Re: Try hiring a carpet cleaner - Posted by Brenda Whittaker

Posted by Brenda Whittaker on September 24, 2003 at 02:24:07:

He also said the signs were sleazy, not the people. They are just carelessly placed and sloppy most of the time, and left there to rot, (the signs, not the people!!) unlike professional realtor signs.