Kristin's RI Journal

Kristin you need to learn the value of the property by going to City Hall in the Tax Assessors office and look up the property sold in the last 3 months in the area of each property you are interested in. i looked at Total view and Zillow and their estimates on a property were tens of thousands of dollars different for the same property.

Never listen to an owner, agent, broker as to the value of a property, you must do your own research.

Every owner i ever met says the same thing, rents can be higher (again you need to research rents in the area yourself). That may be true but we buy based on the current income. There are expenses involved with raising rents. Raise the rent $50 and 1 or more tenants move. Now the apartment(s) have to be repainted, new rugs might have to be put in etc.. now there is negative cash flow while the unit sits vacant. Better to keep rents $50 below market and having someone in there paying the rent.

i was driving around yesterday, there is a large amount of vacant property in RI.

michael

Received a counter on #2, a single family 4 bedroom/1 bath house with garage and fenced yard.

Asking $122300
offered $87500

They came down to $117000, down $5300 and asked for my best and final offer. Have 48 hours to counter and will need to calculate the highest I can go while still keeping room for profit. My plan A is to rehab and flip, but plan B is an assignment. Will keep posted.

Kristin

Kristen,

Total view gives you all the information you need. You need to know the square footage of the property, divide the offer price by the sf and you come up with a price/sf. Then take an average sf/price of all the properties sold in the area in the last 3 month. That will give you your fair market value. You want to be between 50-70% of that number. This is where the academy pays off, they teach you how to do this.

I did my calculations and came up with $106000. I think I did it right (and remember, I was an English major so math is not my cup of tea). The average sq footage of recent comps times the sq ft of the house (1684) and then multiplied by 50% gave me the $106000. I started at $87k and they did come down $5k already. I feel comfortable putting in an offer at around $100-106k, but since it is best and final I do not want to shoot myself in the foot for a few thousand. Decisions, decisions...

Kristin

Remember, it's a numbers game. If you've figured in repairs and the operating expenses, and you know the cost per sq foot, then it's down to the % you want to make. Like Chris says, 50% - 70% gives you a nice range - tighten up the range and see where it puts you. Our investors are excited to get 60%. Great work so far ... that Yankee determination of yours is going in the right direction!

I have been working Matt Larson's 25:1 system, get a list of 100 properties, narrow it down to the best 25 and put in low offers, on average one will be accepted. I got a change to speak with him at the EDGE and he helped me fine tune it a little. I changed the criteria of homes that I look for, and I changed the discount. The first round I went in at 50%, he said he goes up to 60% in the spring, so round 2 is a 60%.

Well, my perseverance paid off and I have found a mortgage broker who can work with me. He said I am approved and to start looking for a property. I told him I already found an REO and am waiting to hear if my offer has been accepted. Will bring him the rest of the required paperwork on Monday. I am so excited that he is willing to work with me and I can finally get a home for my family and then launch my investing career from there.

Kristin

I haven't started looking at mortgage brokers yet. I have been focused on the small banks for now. Go out there and get yourself a deal!

This is a local guy who has been in business for more than 16 years and went out on his own right before the crash. He is direct, easy to talk to, and on the ball! Located in a small office in Central Falls. I found him through an ad on CL originally about no-seasoning refinancing (which he can do) and now may be able to get my own family a home. Then I can refinance that one in 6 months (seasoning requirement for a cash pull out) and continue investing with my equity. Gotta love it!

Kristin

P.S. Waiting to hear back from an agent on an offer is torture! Think I will need to give him a call...

congratulations! having a great mortgage broker to work with is awesome. i found one too and just love her. have a great week!

Kristin it's so exciting all the things that are happening for you. Thank you for your support and encouragement in my journal. I can't wait to hear more about these offers and hopefully a deal or 2 and a home for your family.
Keep it up!
Cathy L

Just stop by to say Hi and i am glad to see you keep taking action. As long as you do this great things will happen, Good luck and keep us posted.

randy

Like waiting for that last drop of ketchup to come out of the bottle...that's what waiting for an answer on my offers feels like...tick, tick, tick tick...

But enough of waiting around doing nothing! I visited my new agent, Oscar, and asked him to run the lists that Bill O'Rafferty talked about at the EDGE. I have the current listings, pending listings, and solds all for the last 30 days in 3 selected towns I want to work with right now. And he had no problem running them for me, so this one may be a keeper! We will see when I am ready to submit the first batch of offers on them.

Have to prepare some ads for Craigslist to find some buyers and sellers for my upcoming properties.

Will update as soon as I have some info on the properties.

Kristin

Make offers, that's what!

I have the list from my agent and will be preparing 5-10 offers in one town and will work on the next town. It helps that I know this area rather well, so I have a good understanding of the neighborhoods and what the houses may rent or sell for.

I made contact with another local RI DGer and hope to meet to speak in person soon. They have much more experience than I and I would love to pick his brain about the current market in RI.

Stillllll waiting to hear on the 2 offers, but the one I wasn't sure I would get is now off the MLS site. Have high hopes for the second one which I want for my own family.

Kristin

Ok, here's what I accomplished today.

Posted 2 ghost ads "a la Carol Stinson" looking for some more buyers. I do already have about 5-6 on a list, but I want some more investors and retail buyers in the mix. (Thanks Carol for the suggested ads!)

I posted them on Craigslist, one about an estate sale and the other about an investor property. Let's see what this little worm can pull up.

Watched some videos on hard money and other real estate topics, and need to get to the new Empowering Conversation DVDs.

And I can have the property I wanted for my family, but they will not budge from $117000. This house has an ARV of $180k minimum, so for me it is worth it, but for a wholesale deal that price chops off my profit. When I mentioned to the agent that I would need to change to financed deal from cash, he stated that they wanted a cash deal with a closing in 1 week. This will happen when pigs fly, but I put in an email to the mortgage broker to see what kind of magic he can get done anyway, and will call him first thing tomorrow morning. I will keep faith that things can move quickly, but how quickly is another matter...

And when that bank leaves the closing table, that deal is cash to them anyway, no matter where I get the funds from. I think they just want to get out of this quickly and are concerned with a mortgage since it is an "as-is" deal, but tomorrow will bring me more answers.

I am proud I have gotten this far and want to get a home for my kids, and my first deal. Then in 6 months I will refinance and cash out to make another deal, maybe real CA$H this time!!!

Kristin

Keep at it, you are going in the right direction.

Well, here is where I stand.

The bank wants a quick closing, meaning next week, or the deal is off the table. The property is being offered to me at $117k and needs about $5-6k worth of work, mostly cosmetic and can be done over time. This property has an ARV of $185-190k all day long and is in a good part of a desirable town. There is one damp wall in the basement but seems to be because they never put a vapor barrier behind the panelling and water may have seeped in from the window over the washer and dryer when we had the recent flooding back in late April and early May.

My mortgage broker has me approved for a mortgage, but since they want a quick closing he also stated he can get me a hard money loan and then refinance once the deal closes. The problem is I need $10k to put down and I cannot get it out of my retirement funds fast enough to matter. I hate to lose this deal because I didn't start the process to request the funds early enough, but there is no where else I can get my hot little hands on $10k.

If anyone would be willing to make me a loan of $10k I can pay them back in 6 months with $12k making a 20% return in 6 months when I refinance and pull cash out. I know this is a long shot, but as Dean always says, you never get anything if you don't ask. PM me if interested!!!

This has kind of put a damper on everything, but I didn't let it stop me from continuing with real estate today. I went to Town Hall to look up some information on several properties. The one I sent the letter to came back "return to sender" and I got the new updated address. Sending that letter trying to negotiate directly with the bank again tomorrow on the brick duplex empty for nearly 2 years now.

Also got some responses back on the ghost ads and already have one tenant-buyer in place once I find the property she is looking for. Got her criteria and will do my best to find her something. Posted 2 ads looking for sellers and making up flyers tonight to hang in the neighborhoods to find some owners willing to sell and finance.

Viewed another property this afternoon that would be an excellent deal if I can get them to come down on the price. Nicely taken care of and recently renovated, this house seems to need just some cosmetic fixing. Nice and dry family room in the basement along with another full bath and plenty of room for another bedroom or office with a washer and dryer down there. Fenced in yard and driveway with a shed in the backyard. Has been on the market 406 days and asking $169900, reduced recently by $20000. My agent suggested offering $115k and see what they do. Wouldn't hurt but on this one I will most definitely put financing on the contract with 45 day closing. Learned my lesson the hard way.

This is quite long, so I will end here and update if anything else occurs tonight.

Kristin

Kristen,

Can you take a loan from your retirement account?

But unfortunately I have not been at this job very long and can only get my hands on $3000, which is 50% of my 401k balance. They will not let me borrow against the pension funds of an additional $2900. It is a third of what I need, so it is a start, right?

I will have the $3000 by Tuesday but it isn't enough to get it all done. A step in the right direction for sure, and if this doesn't work out then I have something to work with for next time.

Kristin

I love your faith and determination. Thank you. Just keep doing what you're doing. I actually am pulling from my 401k to assist with some of the rehab expenses I'm anticipating and some other things.
You Go Girl!
Love all of your action steps!
Cathy L

Doing whatever I can, and if the market was good for kidneys, I'd be down one right now!!!

Thanks for the encouragement. I may need it today since I have to go for a medical assessment for my work injury on my wrist. Perhaps if they decide there is nothing to be done and release me, I can get my hands on the remainder of the retirement money to use, and there could also be a settlement, but we will see.

Kristin

They lowered the asking price on that darn house and I can't make my move. I managed to get $3000 from my retirement but nothing else quickly enough to put in my offer by their deadline of this evening. Makes me frustrated that I got so close and can't move forward.

Thank you to all who asked questions about my situation and the suggestions made. I appreciate your thoughtfulness and willingness to see what you could do, basically strangers, when my own family won't support me. They have the funds but think I am stupid for trying to actually make a better life for me and the kids. When people call this the DG Family, it truly means that to a lot of people, including me.

Now on to the next offer!

Kristin

I was taking a ladies room break at the gym before hitting the treadmill for my C25K program when my music was interrupted by my agent Oscar calling me.

Even though they lowered the price and were receiving many offers on the property, somehow I found a bank with a conscience and they would honor my original highest and best which was $107500. I am signing a P&S tomorrow morning even though I have not yet come up with all the money I need. But I am not giving up and am determine to find that money some how.

As a last resort I can assign the property to another investor for a slight profit since the price is now $10k lower than their last counter. I am so excited to have my first deal under contract and want to bring this baby home.

Kristin

Way to go Kristen! Keeping on moving forward!

Kristen,

Have you searched the DG site for potential private/hard money lenders? There are a number of posts, including alerts on scams, so be careful. I found this one site that someone had used: http://www.equitydevelopmentcorp.com/ for financing ARV rather than cost.

Have you placed an ad, separate from your journal?

I'm looking for myself, too, so I'll keep you updated if I find anything that sounds good.

Keep that yankee chin up. There's got to be a solution.

You know us Yankees are stubborn, so I am definitely not giving up! I will check that site out and please keep me posted if you find anything good. Pulling up every stone and even the pebbles to find that $10000 solution, and I will do it.

Kristin

That EDC requires a higher credit score than I have at this time, so they are a no-go. Will speak with my father tomorrow and also my friend to see if she is willing to loan the money and make an excellent return in the process.

Kristin

Kristin hang in there and it will happen. As Joe says believe and achieve. This is kind of far out there but you know those cash places that you can get an advance on your check but interest rates are high. I don't know if it was from this site or somewhere else many of those businesses are hard money and I don't know if it would be worth calling some of them to see if they invest in real estate and I don't know their criteria but it might be something to check out but i know you are crunched for time. Also you could check Carol Stinson's website to see what's on there. Anyway just some ideas.
Blessings to you!
Cathy L

You are truly a RE fanatic Kris

Keep it up

I had already done my workout on the machines and figured on emptying the tank before walking/running on the treadmill. Had the headphones on the iPhone and when the call came in my first thought was "Who's interrupting this great tune?"

But since it was my agent Oscar I figured I had to answer and had my conversation right there in the ladies room, which was fortunately empty at that time. I was so excited that once I was done I actually jogged more than expected and had energy to spare.

Now if only my agent could call me with an accepted deal every time I had to run???

Kristin