Rina's DAILY JOURNAL: Chapter One - The Beginning

I'm e-mailing you! Where do I get the list??

You are CRAZY, girl!! RE CRAZY! Way to go!! You've gotta post some of the awesome details of your deals. That's exciting!

your sis,

Rina

I'd like to know where to get the list too! Can you send me an email? I did send you address right? Thanks Conny!

BTW Rina, I liked the pics, cute place! Does is come with a boat? LOL!

Dawn

Luckily that property is not one of my flood victims. lol

BUT I'll fill you in on something my realtor just called about. Prop#4 (I'll put a picture in later) is being worked on as we speak, by the seller's insurance contractors. My agent just called to ask if I want the hardwood floors refinished or do I want the downstairs carpeted? WOW! I wanted to put this in to say that a contract is a powerful thing! Just think what I am getting for my $67,500 now. A house that is pretty much being made over FOR me because of damage that happened AFTER I had an accepted offer but BEFORE we closed. One of the contractors was actually fired because he was trying to buy the house out from under me. If anyone in the process was unethical, I suppose anything could happen. But when you have a signed contract, there is a lot of power in that piece of paper.
And then there is still an inspection contingency, so when it is all said and done I STILL have the last word. I am finding that even with sold as-is REOs that I am getting under contract, the licensed inspector not only gives me all the information that I need to make an informed FINAL decision, they actually give you power to make adjustments. CBR wrote about this in one of his threads, which I learned much from, but I am finding out now personally that there are more benefits to this clause than any other I could use. And so far it has not deterred one bit the banks accepting my offers.

Hope that info is of help to someone.

Rina

How cool is that? Kinda like having your cake and eat it too!
Are you going for the hardwood Sis? They look soooooooooo nice! That's great news, can't wait to see the pictures, keep us posted.

Dawn

original hardwood floors refinished. I figure a person can always add carpet if they want to later.

Did Conny send you a list? I haven't seen anything in my e-mail.

Rina

Rina,

From reading some of your blogs, you sound like you purchase properties for yourself to buy/fix/sell. Is that correct? Do you ever do assignment of contracts?

Mati

Yes, mostly I buy and hold (LOVE rentals), but I would love to do some assignments. I have done a couple of bird-dog deals, but I would prefer now to do assignments. Actually if I could, I would keep every single thing that I buy because I am locking up properties that are great cash-flow sources (and all in GREAT locations), but then I would limit myself. I just made another $30K offer today. I know I'm only supposed to get an average of 1 per 25 accepted, but we're pretty good at narrowing down motivated sellers. Either way, they are all great deals.

I contacted a local investor today who has a group of 6 people in the area that are buying up props, rehabbing, and then doing lease-options. He said they are quite picky about who they let in. He has contacts with bank reps with lists of short sales available, and liquid cash to pick them up. We spoke at length. I'm looking forward to talking with him more. Sounds really down-to-earth like the investor I was working with this summer. I'm quite optimistic.

Are you asking because this is what you would like to do, assigning? Sorry I don't have more to share, but I will certainly post my experiences as they happen. There are people in the forums who have already been successful in this area, and I have learned a lot from them.

Wishing you all the best in your REI. Enjoy each day!

Rina

Dear Rina,

Congratulations to you on your success.

I am in the market to assign contracts to end buyers, do some bird dogging in the interim and generate some cash to be able to do what you are your husband do buy/fix/hold/rent ... what a great strategy!
It has taken me some time to find a couple of investors in NJ that are looking flip or rent out properties. They are open to rehabbing and want to find great deals.

This is where i need YOUR opinion:
First of all, i have been combing FSBO listings, Craigslist, etc. trying to find sellers that have key words in their ads that would lead me to believe that they are motivated "despirate", "must sell", etc. Now, let's just assume that i come across a home that is listed for $250,000, the FMV (assessed with www.zillow.com) is about $225,000, it needs about $15,000 in repairs and i would like to make about $15,000 in fee, how do YOU go about determining your MAX OFFER on the house. In my course with Dean, they suggest that i take the FMV, subtract repair, subtract holding costs, subtract my fee, subtract RE Agent commision and subtract closing cost, and this will give me my MAX OFFER $. However, i have read that some of the members here start off by determining FMV and subtracting 30% off the FMV, their fee and repairs, and that is their price. What would YOU do to determine a price if going to ASSIGN a Property.

Also, do you have any tools out there to run comps on properties. I have looked at Realtor.com, Zillow.com and Property.com. What do you suggest.

Do you research how much money is owned on a property (mortgage). Do you have an online tool for this too?

If doing bird dogging work for a investor for the first time, do you have a non-circumvent agreement or promissary note that you use with them.
Just how much work to you do on the property (assessing motivation, visiting home to determine repairs, running comps ...) before you pass the information on to your investor.

How and when do you get paid for your bird dogging?

How have you found investors that will use your bird dogging services?

Lastly, let me know some of your tips and tricks to find motivated sellers ... you said that you're "pretty good at narrowing down motivated sellers", just how do you do it?

Thank you so much,

Mati

wow.. I have to take a little time to think and answer all of that. By morning I will replace this post with my answers, ok?

I appreciate your determination to learn.

a fellow learner,

Rina

You're the best. I will gladly learn from you over a cup of coffee in the AM.
Thank you so much. Charge me a fee if you must!!!!
Mati

Do you manage your rentals or do you use a property manager?
I enjoyed reading your story in Deans new book.

Good morning. Got your coffee?

I would start by using the formula you have learned in Dean’s course. Your assignment fee will be determined by how much of a discount you get the property for. Actually, if you are using the Fast-Cash Offer formula taught in the Success Academy, your MOA (Maximum Offer Amount) will be very close to the 30% off mark, so you could use either . This is the maximum price that investors would be willing to pay, although I hear that some won’t go over 50% of ARV (after repair value) right now. Obviously, the lower you can get under that number, the more YOUR assignment fee could be. Honestly, I think it all depends on who you find as your investor, what they’re looking for, and how in-demand you and your finds are. If you have a number of buyers and are locking up great deals, you might have more competition for what you find. And I’m sure you will learn as you go, and be able to adjust your fee accordingly.

So far, I have only bird-dogged. I was paid $1500 for each house. My investors and I actually worked together on this. We both looked at the houses on-line. I may have seen the listing first, or they may have. But being they were out of town I did the leg-work, checking out the props with my realtor, taking pictures to e-mail to them, both of the houses (inside & out) and the surrounding neighborhoods. They used my realtor for each purchase, and I acted as the middle-man when necessary (You have to remember that my realtor was VERY skeptical at first and tried to talk me out of getting into this “scam” lol. She was a believer after the first deal.) I was paid the $1500 after the closing on each property. One investor, being more knowledgeable than myself in the legal area, contacted a local RE attorney and had him read over and adjust the contract he wrote up between us to make sure it was legal for WI. It also included provision for payment of me “assisting” him in rehabbing, finding contractors and renters, and keeping an eye on his properties, all for which we have set “assistant “ fees. It has been profitable for me and will continue to be so. I don’t know if normally this is what a bird-dog does, but it has worked very well for me. I have learned a lot and have moved confidently onto assignments.

As far as comps, I start by looking at the county FMV on our county website. This is in the ballpark in most cases HERE. (Actually, the banks up until recently were going by the tax statements FMV for lending. Now they insist on an appraisal) I then ask my realtor for comps. This is very hard because there are so few properties selling. But she also does a ton of BPOs, so she is very helpful. I also have an appraiser friend if I need a REALLY close opinion. But even appraisals can be relative. So I don’t get too stuck on comps, because within one month that number could change anyway. I estimate low. I don’t trust Zillow at all. On every RE website I’ve tried, for the houses I’m looking at they come up with “Not Applicable” or “none for this area”, or they use comps from sales across the state border, which are a lot higher than my city. And when it does show comps, Zillow is ALWAYS WAYYYY high for properties here. So I really can’t go by anything online. (If I did, it would look REALLLY good to investors!) Every property I’ve purchased or have under contract at this time is a great deal not only because of what a buyer would be willing to pay for it, but also because it would bring great cash flow for your money. It gives me a lot of options. Re-sale, assign, hold, whatever I want to do. Like I said, if I could I would keep them all.

As far as narrowing down the motivated sellers, Dean and Matt have some GREAT pointers in the new book. Also, you start to get a “feel” as to the timing of your offers in regard to how long listings have been on the market, tone of voice of private sellers, how fast a bank is dropping it’s price, how close to a deadline a short-sale is, etc. You take it all into play.

So, there ya go. I don’t know if I covered everything, but that’s probably a long enough read. Lol

Wishing you the best in your REI,

Rina

And yes so far I manage all our rentals. I love that part. I know as we acquire more, I may have to use a property manager as it will probably be impossible to do myself (take too much of my time). BUT I have to say I put VERY little time in for most of our places once there is a renter in. Actually, on average, I spend less than a couple hours a month between all of them. I don't know if that's worth paying someone else $75 per house?

Rina

a few more thoughts...

We have an on-line service called Landshark under the Register of Deeds page of our county website. You may have something similar. There I can look up mortgages and other documents/transactions by either property address/description or by owner. I don't think it will specifically tell what they still owe, but it will give me the original amounts of the mortgages.

Also, if a property is in foreclosure, the judgement amount should be posted (HERE it is posted in the local paper about 5 times bfore the sale, and is also posted at the library and at the sheriff's office), which will include the balance owed to the lender filing the case. It may not include other liens on the property, though. The best way to find out all this information is to have a title search done on the property. As far as I know that is the only thorough way to get ALL the information. (Somebody correct me if there are other resources).

Also, as far as being paid for bird-dogging, my investor sent a personal check for each after the closing. You could ask for it up-front, though. My guess is most investors will only pay if the sale actually goes through. Any other thoughts on that?

I have found investors on this site (I feel like just being active here is a good source of marketing yourself), and also by using Craigslist.

Rina

Hi Rina,

I may have posted this in the wrong place. I didn't get a reply. Here's what I posted a couple of days ago under "Ask a Question." Wrong place huh....? I'm still learning the website.......

____________________________________________

Hello everyone!!

This is my first post. I have just signed up and received the "Profit from Real Estate Right Now" and "Be a Real Estate Millionaire" books which I am currently reading. My reason for getting in you ask? Well, here's my situation. I live in Michigan and have a small business which is strongly connected to the automotive industry. I'm still struggling along with the business, but with the declining economy and struggling auto industry you might be surprised to know I'm looking for other means of income. My credit's in the crapper and my bank isn't going to loan me any money anytime soon. I have two (yes two) mortgages in addition to the original promissory note owned by a relative which of course puts my original house "upside down" according to lender terms.

So here's more good news, I've been separated for a good period of time and live in a friend’s house and pay rent. He has filed Chapter 13 and the house I'm currently living in is in foreclosure. I see an opportunity here but with no credit it seems all but impossible for me to purchase this property. Additionally, I didn't know about the situation until I recently got the foreclosure notice taped to my door. It was to be sold by auction today (3/4/09) but I'm told that because of the President's real estate moratorium the sale has been delayed until the moratorium has expired or lifted. I thing that's within the next couple of weeks. So here I am with an opportunity in my lap and no credit and I don't know what to do. It seems time is of the essence. Any suggestions?

Your help is greatly appreciated.

Dan

____________________________________________

Okay now the update. Yesterday, I spoke with my bank to see if there was any possibility of getting a loan for this house. They ran a credit score and it was fair at best. They also said my credit to income ratio must be at least 45% before even thinking about getting an approval. I'm not even close. And they want 20% down.

I'm thinking that I may just move back into my original house (regardless of the personal situation) and buy this property as an income property. If I go that way, area rentals are going for $750-1000/mo for plain Jane houses. This one is in a great location (2 blocks from everything you'd need), plus it has a pool and a full finished basement w/wet bar and 1/2 bath. There's around $140K owed but comps are going in the $50-75K range. If I can pick it up for $50K, the payment would be around $660/mo including taxes and insurance. If I could get $1000/mo that's $440/mo positive cash flow. The bank wasn't buying that strategy either.

So now, what's a fledgling rookie REI to do? Is this one too far gone? Or, is there still a way for me to get this property? Or should I step back and rethink my approach.

Thanks in advance.

Dan

Hi,
Start a new forum topic with your questions.
As you are new I sent you a PM with details. I think you have great questions, they just might get lost here though.

Thanks Angela. I'm still trying to figure out how to manuver and post the appropriate subject at the appropriate location.

hey... sorry it took so long to get back here..

How much time do you think there left on this house? I doubt you have enough time to do a short sale (it would have to be a short sale because of what is owed on it), BUT if you can find another investor to work with you or be your "credit", possibly the bank would want to negotiate intstead of paying for a foreclosure. You might want to talk to an RE attorney about the bankruptcy implications. It might just be safer to keep tabs on this property as it goes through the foreclosure process, possibly locking it up as an REO and assigning it to another investor. Either way, don't wait for this to be "the one". Be researching and making offers on several at a time (always including your escape clauses). And work on your buyers list so you have a place to "assign" them to.

And welcome to the DG family. It's good to have you here.
Best wishes on your REI!

Rina

P.S. Thanks Angela.

Thank you Rina. Life does get complicated at times. The good news is God never gives you more than you can handle.

As far as my place goes. I think the strategy is to wait for the bank to get the property back. I seriously doubt anyone will bid at the starting bid or what's owed. I think it would already be gone if there was any equity in it. The home owner actually came to me and asked if I wanted to take over the payments but I could't see paying more than FMV so I turned him down. The Michigan market is horrible if you're a seller, so I think I'll wait it out.

Anyway, thanks for your reply and your help. We'll have to see what pans out in the end. I'm excited to see what happens just for the experience. Nothing like being in the middle of the storm to learn all about it.

Keep in touch....

I don't know much about HML's, but you may be able to find a HARD MONEY LENDER.

I'm a beginner as well, so someone correct me if this is not a viable option.
Do HML's act as a bank (for long-term interest gains) or do they only work with deals that they'll be able to "cash-out" relatively quickly?

I am new to this website and forum. I've read days worth of posts and you guys (DG Family) are the best!!

I stay up VERY late a night gaining VERY useful information from you guys and I want to say THANK YOU!!... for the knowledge.. for the inspiration.. for keeping me in focus and motivated. (And to think - you don't even know me! )

This morning (about 3am) as while trying to familiarize myself with this site, I ran across this forum and thought it to be a GREAT idea to "vent"... and thought to myself that maybe by sharing the steps I was making ("venting"), that 1) I may be able to see things clearer. and 2)I'm sure to get help along the way....

So HEAR I AM!! I decided to "vent".

About 3am-ish, I was putting together a mailing list of owners whom may be facing foreclosure. (My list may be outdate, but I'm going for it anyway)In the midst of doing that, I decided to go to the city assessor's website to check to see how much the taxes may be on the properties, when I came across THE MOTHER LOAD of tax lien listings. And they're current. And they're liens that will be sold within the next 60 days. Some I know I won't be able to touch (even if I had the money to pay for their back taxes) Example: a building that has human resources (welfare) offices in it..... The only thing is the only chance I have of acquiring any of these properties is from the owners directly. (NYC doesn't allow individual investors to buy tax liens)

OK - So here's my question... If a $900,000 home has $20,000 in back taxes, what would any of you offer that home owner to sign over the deed?... and if [for example] they still owed (hypethetically] $400,000 on the property, how much should I offer to help them pay off some of that dept?

(Correct me if I'm wrong, but since the lender has a lien on the property as well, shouldn't they be contacted to ensure that once myself and the owner agrees on a number, that I will actually be able to take ownership? (assuming they come to an agreement to pay as much of the loan off as possible and cancel any other debt)... This isn't like buying a traditional tax lien from the government where I would be able to buy the lien and own it out-right)

Sorry Fam!! I know I have a lot of thoughts smimming through my head. I admit, I try to think of things from ALL angles. (sometimes it gets in the way of taking ACTION)

Let me know what you guys think. Any and all advice is welcomed.

THANKS A MILLION+

Rasheem S.

Hi Rasheem,

It appears you've made the same mistake I did (Look above for AngelaK's post on 3/6...LOL). If you want to post a note for everyone to see, just click the "Member Journals" button on the left and then click "Post a new forum topic." That way everyone will see it and not just the people in Rina's journal.

You'll learn as you go. That's what I did.......

Hey, thanks for popping in. I do see that you have a lot of questions and thoughts swirling around in there. That's GREAT!! Dan is right. If you start your own journal you'll get all kinds of great posts from everyone here, both in answer to your questions and also powerful encouragement. Sorry I don't know the answer to your tax lien question. But I'm sure SOMEBODY does. Feel free guys, at any time, to jump in here with advice or answers!

Rasheem, congratulations on taking action! I look forward to hearing more of your REI adventure as you move forward from here.

wishing you all the best,

Rina

I will post my question now...

Come to think of it, I posted a new forum almost a few days ago and I got 0 (zero) replies. I feel kinda rejected! ( just kidding)... but seriously, someone please post some incite on http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

Again, I'm trying to get answers on every angle!

And I'll be sure to only post my daily journal in this forum.

just sneaking in here to test a document Sissy wanted to post.
http://www.deangraziosi.com/ufiles/Sissy's%20document.jpg
hmm... that's not working. Any luck, Sis?

Rasheem, I'll check out your post.

Rina

I look forward to your incite.

Journal Entry:

Last night, I printed up about 20 letters to owners possibly going into foreclure.

Tonight: I'll print the envelopes.

..Had a hectic day, but Step by step, I'll get there.

Rasheem,
Sounds like you're on your way!
Hey, I was gonna say, while you are certainly welcome to post here, you could also create a journal of your own if you like. Just click on "Member Journals" at the left of the page and start a new forum topic. Name it whatever you like, and you can update as often as you wish. It's kind of neat to look back after a time and see how much you've grown.

Best wishes,

Rina

...and thank you for being the 1st to contribute to my forum. What's funny is I may be all over the place on my own forum!

I mailed out 16 letters to owners - potentially in pre-foreclosure.

Not such a big deal it comparison to 66 offers... but it's a start.

Maybe that's all it will take to get things started.

Also, I will soon be mailing out letters to owners that have tax liens that are due within 60 days.

Good start, Rasheem! Keep the momentum going. (and don't be comparing to anyone else. what may seem small to one is HUGE to someone else. )

Rina