Private money magnets

God is good. Today my husband may have secured our first private money lender. She's actually one of his massage clients and has been looking to invest in real estate. We just worked up a proposal for her to partner with us on the purchase of the Ft. Lauderdale property. It actually is a great property to keep as a rental (Section 8 is paying $1200/mo for a 3 bedroom) and if we can do it through a partnership with a private money lender it will be even sweeter. If we still end up selling it pretty quickly before renting it out (either before or even after the rehab) our investor won't mind anyway since it will be a pretty fast return on investment and then we can use her money again for another deal! It's not set in stone yet, but we'll be reviewing the proposal with her over the next couple days. We basically want to be private money magnets....that will help us do a LOT of great deals.

We're going to make some more offers now. Insanely low offers for $25-30K. We have buyers who are willing to buy rehab properties for $30-50K so if we can snag one we can have an easy flip. Steve over at flippinghomes.com just told us on the forum today that he snagged 3 REOs for 15% of the after repair value. And Steph over in Tampa just got a place for $18K. All I can say is wow.

The phone calls on the properties have been interesting. We have been hearing from a lot of people who want to actually live in the properties (owner occupants) vs. investors. We don't mind selling to owner occupants but we tell them that if we have to do the rehab work the price will obviously be higher when we sell to them.

That's all for now.

Phone is a-ringin'

The ads are definitely resulting in phone calls. Some are tire kickers and some have potential. I'm really looking forward to getting a virtual assistant in place to help us with these phone calls as well as some of the marketing grunt work. We're getting calls from the Craigslist ads as well as the newspaper ad (we're on day 3 of 10 of the ad). The bandit signs have all disappeared now and we'll have to decide whether or not to purchase more. What's really great about this process is that we're meeting investors from across the county and building our buyer's list.

Every week I spend an hour or two focusing on real estate investing education -- there are a lot of folks who do some good training via webinars. Sometimes they are chock full of sales pitches, but there is typically some great content too. I got some good ideas from Tim Mai and Pre$ton Ely on finding motivated sellers and I'm looking forward to trying out some new techniques once we're ready to look for more deals. I know we're supposed to run on all cylinders and do everything at once, but since these are our first two deals I'd really like to focus on these before finding more sellers and securing additional properties. Besides, plenty of banks are motivated sellers right now so even if we don't market to homeowners, there are plenty of REOs to make lowball offers now.

On Saturday morning, my hubby and/or I will go to a wholesale property showcase that is hosted by SoFla Property Solutions. This will be another good opportunity to meet with investors in the Broward and Miami-Dade area.

IndyMac is so slow.

So now I know what some of the other investors mean when they say that banks move as slow as snails. They are overwhelmed with their inventory and don't seem to have adequate staff working in loss mitigation and REO departments. Anyway, I say all of that to say that after a WEEK of waiting we FINALLY have a signed contract from the bank on the Sunrise property. Now its time to get busy marketing. Our classified ad started in the Sun-Sentinel today and we've already had a few calls so hopefully the phones will continue ringing throughout the weekend. As far as the first property, we've had some preliminary interest but nothing solid yet. More to come!

Gaining momentum - Selling time!

Since Saturday our focus has been sell, sell, sell. Our buyer's list is short right now, but we're working all the angles. There are 100 different ways to skin a cat (what a terrible expression...not sure I'll use that one again. LOL!):

1) Called all the people on our buyer's list - these are people who either responded to our bandit signs or people my husband called based on seeing their bandit signs.

2) We'll place a 10 day classified ad in the Sun-Sentinel tomorrow. Will cost about $150 but it will be worth it because even if we don't find our buyer with the ad, we'll be building our buyer's list which is important right now. We should have the property under contract before the ad run is over but we'll just keep talking to local investors and finding out what they are looking for.

3) We're working with another local investor who already has an extensive buyer's list because he's been investing here for a few years. He's sending it out to all his people today and if he brings us a buyer we'll pay him a finder's fee.

4) My husband's uncles invest in Ft. Lauderdale and know folks who are always looking to buy properties, so they are reaching out to a few people on our behalf.

5) Placed an ad via postlets.com which posted our ad on numerous websites

6) Going to a lunch meeting on Thursday with the Broward Real Estate and Business Network and meet others in the local investing community.

We've had interest from two investors so far who will be going to take a peek at the property. My husband may be meeting with one of them tomorrow.

Who would want to be President now?!?!

I shouldn't have turned on CNN. The stock market was a disaster today. Seriously....why would either Obama or McCain actually want to be in the White House in the middle of this terrible economic crisis? It seems like a no win situation. If Obama gets in it will probably be by the skin of his teeth and the pressure will be on for him to do something big in his first term. Not sure he'd get a second chance and not sure he'll be able to put policies in place to right the ship. If McCain gets in and continues to hold up W.'s policies (economy, war, etc), I doubt this ship will get right either. Add to this that there seems to be a lack of creativity in Washington to come up with better solutions to things such as the subprime mortgage meltdown... its just a mess. Nevertheless, I'm going to continue to stay positive, focused, and faithful and keep moving forward. I've heard that when other people are scared, that is the time to push forward and invest wisely but aggressively...and when people are investing aggressively and excited, that's the time you should be more conservative.

I've gotta get busy with this real estate investing to make up for the massive losses in my 401(k) and IRA over the past week.

That's all for now.

Even sweeter. Contract #2 :-)

Wow...I see that some of these lenders are hard up for cash which is good news for us investors. We got another offer accepted from the bank today. The property is located in Sunrise which is an even better neighborhood than our first property. God is good! Check it out:

The property was listed at $87K (reduced from $92K) and we are locking it in for $60K. It is a 3/1 and approx 1000 sq. ft. The after repair value is $120K and I'm not sure about the estimate repairs yet since I haven't seen the inside (in person)...I've seen lots of pics but who knows how long ago those were taken. I'll be checking out the inside tomorrow and if it has less than $20K of damage to it, we'll have ourselves a deal and will sign the addendums tomorrow. Oh, and I found a pretty nifty website that will do repair estimates online (and connect you to local contractors if you'd like). I did a sanity check with my husband's uncle who is a handyman and the estimates given by the website were very much in line with the estimates he gave me when I told him about the work needed on property #1. We still overestimate just in case...so if it says painting the entire exterior will cost $1200, we will add another $100-200 to that to give us a cushion.

We're going to hold off on signing a third contract until we can get a solid buyer for at least one of the properties. Then we'll keep it moving and work to get some more properties.

This weekend is all about getting on those phones and working to find our buyers. I have faith that we're going to get buyers - cash buyers - and we're going to find them fast.

Sweet.

Today's a good day. We got the signed contract from the bank so we're solid now. Now its time to pray for God's favor and market like crazy :-). We have about 15 folks on our buyers list now so we will get busy calling tomorrow. Of course I had a number of questions and this 60 days of free mentoring from Tim Winders is great because we're getting 24 hour or less responses back to all the questions we have. It's incredibly helpful to have someone to bounce ideas off of.

Here's what the property looks like (you can't see the carport that has all the graffiti on it and the windows are all jacked up now and need new glass). We'll have to take some more pics of it tomorrow so when we market it on the web we can have pics of the interior.


Oh, the bank did insist that we use their title company to close. No biggie. I spoke to the attorney at the office today and told her what we're looking to do and she said they can get it done. I'm taking the $1K earnest deposit over to their office tomorrow.

Another cool thing is that the listing agent told me about another REO her brother in law has in one of our target zipcodes. He hasn't even listed it yet because they just got the tenant ("the crazy tenant" as she called her) out of the house. She told me I can drive by it and make an offer through her as soon as I'd like, even before they list it. We'll go take a peek at it tomorrow and if it looks like a winner we'll make another one of our lowball offers...their list price won't mean much to us anyway!

More soon.

Woo hoo! More than a glimmer - its done (almost)!

I just got off the phone with the listing agent and the bank wants to deal! We're getting the property for $56.5K with a $1K earnest money deposit (much better than the typical 3-5% wanted) and it doesn't look like they are going to hassle us about selecting our title company for the closing. Now I just have to get a new contract over right away so we can seal the deal and move on to flip it to an investor with a double closing. I was pretty excited to share with my husband that the bank finally accepted our offer...my husband (in his typical MO) was like "That's good." Wanting more of a reaction, I told him again and he said "I heard you. That's good. But I'm not shocked. I fully expected them to accept it." LOL! Gotta love him.

A glimmer of hope

Today is a busy day on the 9-to-5 so I only have a few minutes, but there seems to be a glimmer of hope on the REO property. At first the bank countered our counter at $69K. $69K!!! A mere $1K less than their first counter offer and only $2K less than their listing price. This does not sound like a motivated bank to me at all. This was yesterday. Anyways, the listing agent asked me if I wanted to counter again and the asset manager also wondered if they could perhaps give us a $5K credit and do some of the repair work needed on the house....I told her no way...offer stands firm at $56.5K and we'll buy it as-is. The listing agent called me back this morning and said she told the asset manager that we're holding firm and that the property has been on the market for a looooong time so he should at least take that offer up to his manager and see if he can get it closed. Apparently the asset manager decided that was a good idea so we'll see what the bank decides to do. Time is ticking.

First counter offer on REO!

Good news! We finally got a counter offer on one of our REO properties that we made an offer on a little over a week ago. The home was listed for $72.5K and we offered $51K. They have countered at $70K which simply isn't going to cut it. The cool thing is though that the listing agent said they've been trying to sell this property for over 120 days now and they are motivated to get rid of it...apparently the asset manager told her not to lose me as a buyer and find out what we want. So we went to inspect the property today and did a quick repair estimate...looks like it needs about $10K worth of work. We believe the ARV is around $100-110K and we want to flip this thing to a rehabber so we aren't going to be willing or able to give them the $70K they want.

The property wasn't in horrible condition but it will need plenty of work...exterior painting (grafitti all over the carport), interior painting, carpeting, tons of cleaning, window glass replacement, and some drywall work. Oh and the bathroom was just plain nasty!!! But nothing that can't be addressed. Anyways, we're going to see exactly how motivated this bank is. If they don't like our counter to their counter ($56k) we'll just wait and see if it sits on the market for another week or two and then we'll resubmit. We'll see how it goes!

Oh...and my husband checked out that home in Hollywood...it needed a LOT of work...not sure we could even offer the woman the amount she owes on the place - $85K. We'll work the numbers but its not looking good for them and unfortunately they may end up in foreclosure. We just have to double check the comps in that area. We have someone who wants to invest in Hollywood or Miramar so hopefully we'll find something that works for him soon.

More offers...waiting...more offers

Ok, so we've made another 8 offers....mostly on REOs. We're also still waiting to hear back from last week's offers. Nothing yet. One bit of progress is that I got a call from a woman in Hollywood who is in pre-foreclosure and wants to sell her 3/2 home for $100K. She owes $85K on the mortgage and based on recent comps the value is likely between $130-150K. We'll check out the home on Friday and see what happens. Meanwhile I've sent out another 30 letters to folks in pre-foreclosure who have equity in their homes and hope to get some calls from that soon. The idea is to send out around 100 or so letters every month to 5 targeted zipcodes in Broward county.

We're still awaiting news on what our "leaders" are going to do with this bailout bill. I'm simply not convinced that there is much creativity in Washington. There has to be a better way to solve this problem than place a $700 billion dollar tax burden on the American people. Seriously. Dave Ramsey sent out an interesting proposal on how to deal with this situation. I think it has real merit and I've sent it along to my House rep and Florida senators for consideration.

Anyways, back to REI. Hoping we'll close our first deal before the end of October so gotta get plugging away.