Real Estate Investing

[twojman]

I currently own a 4 plex which I am thinking of selling. Once sold I was thinking of moving into a duplex in order to decrease the amount of leverage I am using. Is there a good place to find available investment properties?

I have looked on Craigslist, Iowa Realty and Fannie Mae HomePath site. Is there a way I can get an 'in' with banks for REO type properties? Yes, I would also like to try my hand at a flip or two. I studied and tracked foreclosure auctions for about 9 months in Polk county and attended a couple of them.

Any assistance would be appreciated.

 

[CycloneCJ]

Heard about a good deal on a house in Marshalltown in another thread...

(Mobile jmlad)

 

[twojman]

Heard about a good deal on a house in Marshalltown in another thread...

(Mobile jmlad)

HAHAHA! I'll pass. I do not even want to drive through that community let alone own anything there.

 

[Bestaluckcy]

I used to work with real estate from the lenders side. I would advise you to never ever purchase property at a sheriff's auction, as there is too much title risk. Allow the property to be foreclosed and then deal with a lender or government agency. You may find what you are looking for by checking with some REO depts of some smaller community lenders. (Credit unions, banks etc.)

 

[cycloneworld]

Me and a buddy own 4 rentals (1 is a triplex) and have done around 10 flips. The hardest part is finding properties...especially in this market. And cash is king (but hard to do). My few tips:

1. Don't waste your time with Iowa Realty/Homepath/etc. All of those are listed on the MLS. Use realtor.com or zillow.com and it will show you everything listed on the MLS. REOs are also listed on the MLS after a certain point.

2. You can certainly try to establish relationships with the top REO agents but keep in mind dozens of others are trying to as well. The best way to establish those is to buy properties. And always follow through. Getting your offer accepted by the bank and then backing out because you found something you didn't like in the inspection process is one way to really hurt your credibility.

3. If you see a property you like, don't wait. Go see it. And if you like it, make an offer ASAP. Most good deals will have multiple offers within a few days.

4. Margins, especially on flips, are A LOT less than they were 4-5 years ago. Unless you luck into a great find, I'd estimate $12-$20k is the maximum you'd make on a basic flip. And that's if you do the work yourself.

5. Build your team before you start. Lender, realtor, contractor (especially if you are new to budgeting), attorney (hopefully you won't need), etc. PM me if you are interested in recommendations.

We are always looking to add to our rental portfolio, PM me if you are really interested in selling the 4-plex.

 

[twojman]

I used to work with real estate from the lenders side. I would advise you to never ever purchase property at a sheriff's auction, as there is too much title risk. Allow the property to be foreclosed and then deal with a lender or government agency. You may find what you are looking for by checking with some REO depts of some smaller community lenders. (Credit unions, banks etc.)

While tracking the foreclosures I eliminated about 75% based on some criteria I had set up. This is without even physically looking at the places. Most likely only about 5% - 10% of them would be something I would even consider. I did do a title search on one I wanted to buy and it came back clean. You can get a good idea of how the title is based on the defendants.

As cycloneworld stated, cash is king. It prevented me from getting a place that would have turned a 50K post tax post repair profit!

 

[twojman]

Me and a buddy own 4 rentals (1 is a triplex) and have done around 10 flips. The hardest part is finding properties...especially in this market. And cash is king (but hard to do). My few tips:

1. Don't waste your time with Iowa Realty/Homepath/etc. All of those are listed on the MLS. Use realtor.com or zillow.com and it will show you everything listed on the MLS. REOs are also listed on the MLS after a certain point.

2. You can certainly try to establish relationships with the top REO agents but keep in mind dozens of others are trying to as well. The best way to establish those is to buy properties. And always follow through. Getting your offer accepted by the bank and then backing out because you found something you didn't like in the inspection process is one way to really hurt your credibility.

3. If you see a property you like, don't wait. Go see it. And if you like it, make an offer ASAP. Most good deals will have multiple offers within a few days.

4. Margins, especially on flips, are A LOT less than they were 4-5 years ago. Unless you luck into a great find, I'd estimate $12-$20k is the maximum you'd make on a basic flip. And that's if you do the work yourself.

5. Build your team before you start. Lender, realtor, contractor (especially if you are new to budgeting), attorney (hopefully you won't need), etc. PM me if you are interested in recommendations.

We are always looking to add to our rental portfolio, PM me if you are really interested in selling the 4-plex.

I found a home on zillow that was fannie owned. Assessed value was reduced from $202k to 74,900. This was due to fire/water damage based on the photos I saw. I assumed about $70k in repairs. I told my wife I would offer $75k for the house if I could, well it sold for 74,900. The repairs have all been done and it is now assessed at 220,500. I know assessed is not the proper valuation of a place but it is directionally sound.

Your #5 is great as I wrote out a long list of things I am going to do to get ready and every one of those was on the list!

Another quick story, I put a bid on a house for $30k cash. They had it listed at $60k, lots of work to be done to it! They countered with get this, $58k. (Bank of America) I did not bother to counter that. The house sold 5 months later for $37k. IMO, I was in the range.

 

[cycloneworld]

Another quick story, I put a bid on a house for $30k cash. They had it listed at $60k, lots of work to be done to it! They countered with get this, $58k. (Bank of America) I did not bother to counter that. The house sold 5 months later for $37k. IMO, I was in the range.

If you do it long enough, nothing banks will do will surprise you. We once offered $95k for a bank owned property, they didn't even counter, they rejected the offer. It sold for $85,000 30 days later.

My other favorite is the "we have multiple offer" card REO realtors play way too often. Like a property will be sitting for 6 months with little interest and once we submit an offer, suddenly they have "multiple offers" and ask for highest and best. We've stopped playing that game. We make one offer, label it highest and best, and submit it. We've wasted way too much time trying to low ball and get a property on the cheap. We know our numbers, what we want out of the deal, and go from there. Makes our lives simpler.

 

[SoapyCy]

I offered cash on a house owned by Bank of America down the street from me and they told me "it wasn't ready" to be sold. It's been sitting there vacant for 3 years.

 

[twojman]

If you do it long enough, nothing banks will do will surprise you. We once offered $95k for a bank owned property, they didn't even counter, they rejected the offer. It sold for $85,000 30 days later.

My other favorite is the "we have multiple offer" card REO realtors play way too often. Like a property will be sitting for 6 months with little interest and once we submit an offer, suddenly they have "multiple offers" and ask for highest and best. We've stopped playing that game. We make one offer, label it highest and best, and submit it. We've wasted way too much time trying to low ball and get a property on the cheap. We know our numbers, what we want out of the deal, and go from there. Makes our lives simpler.

I offered cash on a house owned by Bank of America down the street from me and they told me "it wasn't ready" to be sold. It's been sitting there vacant for 3 years.

Amazing, Bank of America is not good. We were going to put a bid on a house that needed work, had been sitting empty for a year. This was going to be for us to move into, not for investment. As cycloneworld put it the realtor told us there were multiple offers being reviewed. I rolled my eyes at that point. This one was owned by BoA also. We ended up not putting a bid in. I thought it was just the realtor messing with us but it sounds like it is a common tactic.

I have had other interactions with BOA just in my researching phase of investing and I do not like how they conduct business. No wonder they are on their 4th CFO in 8 years not to mention another new Chief Risk Officer.

 

[CloneAlta]

I currently own a 4 plex which I am thinking of selling. Once sold I was thinking of moving into a duplex in order to decrease the amount of leverage I am using. Is there a good place to find available investment properties?

I have looked on Craigslist, Iowa Realty and Fannie Mae HomePath site. Is there a way I can get an 'in' with banks for REO type properties? Yes, I would also like to try my hand at a flip or two. I studied and tracked foreclosure auctions for about 9 months in Polk county and attended a couple of them.

Any assistance would be appreciated.

A bit off topic from your request, but if you are not familiar with the 1031 Deferred Tax Exchange program available to real estate investors, you should get the details and consider selling your 4 plex under the rules of that program so you can avoid paying taxes on your transaction now (it gets deferred into the future and you can keep rolling that tax liability into the future). It is a huge opportunity to build wealth.

 

[phuoc_phuoc5]

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