You just never know

There is something that I always say, "there are some many ways to make money in real estate". This has proven it self even more true than I could have imagined. I am now flipping shortsales, and boy is this ever complicated. There seem to be many different scenarios:

Pre approved short sales- I am working on one of these now, the bank approved the shortsale and now the owner is selling it to me. I could be wrong but it would seem to me that once the bank approves it, it is then up to the seller and their attorneys to work out the details of the sale.

Shortsales (unapproved) I have unknowingly placed bids on properties that were unapproved shorts sales. On these properties, the sellers attorney send my bid to the bank for their approval of both the shortsales price as well as an overall acceptance of my offer. It seems that when this is the case the bank is at that point in the middle of the deal and dictate the terms or the sale. Enabling me from assigning the property to another investor.

I am looking for ways to deal with these situations.

- leveling with the buyer and tell them exactly what is going on with the deal. I would get them to commit to the sale price that includes my profit. Once they commit I simply ask them to cut me a check of my profit and the other for the sale.

- Set up my end buyer, then use of transactional funding to buy the property and then once my deed is produced sell the property to the end buyer.

I am also looking for alternate ways to handle and flip shortsales, so it anyone has any ideas please let me know.

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Lesson Learned

!#@^ Teller ave, Bronx NY-  A new agent that I am dealing with sent me this listing along with others.  The seller was asking 199k, I offered 120k.  My agent tells me that I have an accepted bid and to send him my POF and attorney info, so I do and begin to shop the property around.  I start my asking price at 165k all cash and get a few people that want it at 135-140k, and I mean these guys are hungry of this property. 

I tell my agent to make sure the sellers attorney gets the contract to my attorney asap so that I can assign the property only to find out that I didnt really have an accepted offer.  Turns out that the seller "accepted" my offer, but since this is a short sale, its not up to the seller, it is up to the bank to give the ya or nay.  Not to mention that the property is not vacant, it has tenants that are out of lease.  

Now I have people that are mad at me because I cannot deliver, and I may have ruined a great relationship with an actual "rock n roll" buyer, we will have to just wait and see.  In the mean time, I am putting pressure on my agent to get a hold of the bank and to find out if I can get an accepted offer and for how much.  Once this is done, I am able to get my contract and make a deal with the tenants so that they will move, a "cash for keys" situation.  Give them a few grand to move. 

I also have:
148 sackman, Brooklyn NY 1 family, which I have in contract, ready to move... ARV 428k, asking  200k, repair less than 70k.  Do the simply math, this is a good buy, only prob is that the mls has it listed at 208k so it makes people feel that they are not getting a good enough deal on it. 

So if anyone out there wants Sackman just call me at 917-544-6768

LESSON LEARNED!

Dont shop the property around untill my attorney tells me that he got the contract, included the "assingment clause" and I have it in my possesion ready for me to sign it.

Why Real estate

So why real estate you ask?
Because I've been doing it since I was 17 and because it makes perfect sense to me. also:
- you can't lose if you do your homework
- real estate is the only sure investment that will always appreciate
- rent increases are inevitable
- safest place to park cash, much safer than banks
- only industry I know of that you can make 2k-100k without ever spending a penny (BTW that's the program I'm on)
- and more than anything I think the biggest appeal is that there aren't too many "real estate investor days" that require you to "work" when you don't want too. - once you own enough properties to have a livable income all you really need is monthly checkupks with your property manager.

Oddly enough I have never had any great success in it. I've gone from being an agent in NYC to working with a bunch on different investors on their projects, but never on any of my own investments. So here we go, with 8+ years experience on my back, I'm going to strive for guru status! I know it will be a long journey and there is a gang of things to learn, but I'm on board for all of the potential this game has to offer.

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Snow Ball Effect!

I placed what I think to be 60 or so bids within the last two weeks and I came back with more than enough great properties:

Property one- Accepeted bid, sellers attorney agreed to assignment clause verbaly and my attorney and I are awaiting for everything to be placed in writting, while I work on my inspection.  Things are moving very well.

Property two- Asking price vs. ARV (after repair value) are amazing, I bid much lower simply because I have no idea what they are willing to do.  Waiting on my broker to let me know what their counter offer is, push come to shove, this is a great opportunity, fingers are deffinetly crossed on this one!

Property three-  Placed a low bid, waiting on an agent to get back to me, the property itself is worthless, but the land that it is one is amazing, 5,000+ square feet in the middle of the bronx.  Lets hope I can get the zoning on this changed, it is an R6 now, but if I can have it re-zoned for an R7 then this should be golden.

Property four -  Spoke to the seller direct, as is, its a beauty set up, great price, great location, location, location, and lots of spread for profit. 


At this point all I can really do is do my best to stay on top of things and people and pray on it that all 4 go through, who am I kidding Id be extatic if one goes through

Bless

Let's Rock

So I am waiting on the the attorneys to do what they need to do to make my deal work.  I have people lined up to take it off my hands so I hope that all works well.

Now, today I looked in my email and found a gem amoung gems,  I started my bidding on the property and now just have my fingers crossed.  If both of these were to go through, OMGoodness, this would be huge and just at the right time. 

In the meantime to keep myself occupied and moving, I am still out there placing other bids and looking for more properties.  The last thing that I want to happen is for me to make a few grandies and the lay back and fall off my grind. I need to stay just as hungry as I am now if not 10x more hungry.

I am starting to see a very nice trend at play here and I think i love it.  The trend is that 30:1 ratio that we talked about before, in addition to just putting you name out there into the real estate industry just as often as you can and virtually anywhere.  It seems that everyone is in on this money maker wagon and they are all willing to share info. 

I will have more details later..

jah

ACCEPTED!

I was so wrapped up in being overwhelmed with doing all of these comps and submitting offers that I forgot to mention that I got an accepted offer. I got this one from my first batch of bids early in the week. There are still alot of bids that I havent heard back from.  Now that I think of it, there are roughly 30 bids that are pending my attorney info, so really the ratio is 27:1, bids to accepted bids.

Lets hope that this really is the case, because then by tomorrow when I get my new attorneys info over to my new agent, then that will be 31 new bids, plus I did comps on 20-30 properties that I have to send out tomorrow. My fingers are crossed, so that by the end of the week I have 3 accepted offers, and may Jehova willing I have 3 assigned contracts. 

New Game plan

Just got off the phone with the new attorney.  Now according to him the double closing is not as easy as I thought and he suggested Simply doing an assignment of contract. 

Now this means that I have to make sure that the seller and the sellers attorney are cool with it.  He says that not all of them will go for it. 

BTW an assignment is where instead of buying the property, I get a contract that says I have the "option" to buy the property and then I turn around and sell this option contract to another buyer.  I also need to make sure that I have the earnest money to put down. 

Lets see how well this works out.

Lots of bids

I am trying to bank on the law of averages, but I have to say, this is becoming annoying.  last week I bid on 58 properties, and thus far this week 10 bids are in. Something has to happen and soon, I feel it. 

I am wondering just how many bids will equate to an accepted bid?
Furthermore, how many accepted bids will result in the the purchase then flip of a property?
Add to that, suppose that the ratio is something to the extent of 100:3 x 3:1, this would mean that in order to make an income of appx. 20k, I would have to close roughly 3 per month. 3 per month would mean looking at and doing the comps on about 300-400 properties a month!

Thats alot of properites, it takes me hours to do 20 comps.  How would I ever "get-er-done"?

sounds like a few months in trenches and then off to hire a small staff.  Well lets stop speculating for now, and get back to placing bids.

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law of average

so I'm banking on the laws of average to pull through for me. I have teamed up with a few realtors to find properties. they find them for me and then take care of the bidding processes. I've bid on 58 properties this week. I have roughly 60 more to look at and do comps.

I hope that I can get an accepted offer next week. I have some buyers lined up ready to take them off myhands, so let's hope for the best. I will keep u all posted with my end results as far as developing a rule of thumb for the avg number if bids, vs accepted offers vs flips..

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Keep Focused

I have put way too much focus on just one project!  Not good.  I need to be more active because after all this is a numbers game.  The more properties you work the better your chances of closing a deal.  I have decided to start buying my own REO's but my bread and butter is wholesaling.   It is just the same as when you are a licensed real estate agent.  Your rentals are your livable income because they are very prevalent, and sales, although they have big payouts, can sometimes be few and far between, and always take much longer to close.  Sales as an agent take time and typically are to many degrees difficult.

I feel that the same applies here, due to the fact that in this market there are a ton of investors looking to buy, and a lot of sellers looking to get out of a jam, and most importantly there is no other investment other than time and effort.  But with flipping REO's you need to have the investment capitol for each property, some you may want to or need to put money into and overall it is a much longer process, or at least for those of us that don't have a ton of liquid assets right now. 

Tomorrow I will look for a ton of new properties to wholesale as well as begin on the first steps in buying REO's.  I don't really know the first step But come tomorrow I WILL!

Fingers Crossed

There is a property I have been working for a while. its a 3 fam that can be converted into a four fam, 9 bed rooms, 3 bath and a 5 car garage, zone r6.

Now, this is an approved short sale with an asking of 365k, but I got a direct link with the owner and I have it for 340k. This house is in its own little up market with an ARV of 600k-650k.


I've been working this one for about 2 weeks before I gave up on it when out of the blue 2 works later I got an offer on it, some my fingers are crossed, I should have a good idea of weather or not the good lord will allow for me to get a big pay day this week, will keep yall posted.

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Bumps In The Road

Where I am now on my quest to become a guru is "wholesaling" properties, otherwise referred to as "bird-dogging". in the last week I missed out on 24k due to negligence! I could have been 24k richer, instead I'm 24k exhausted.

The short end of the story is 3 deals that didn't go through because I wasn't dealing directly with the end seller, rather I dealt with liars that claimed to have full control of the property, and buyers that lied about having liquid assets that the didn't.

The most frustrating situation occurred as follows. found a package deal, 2 brown stones on bushwick ave, collectively valued at 1.1M, had 2 very hungry investors, POF and LOI ready. the morning the contract waS to be signed I find out the the property is sold. Add to this nonsense, had the deal gone through, the investment firm with the "control" of the property was charging outrageous broker points on the property.

end result, no sale, no cash for my bank. but here is the great and very valuable result.


1- I learned to never attempt to do business without having the contract sent to me for my personal review BEFORE I shop it around.

2- GO STRAIGHT TO THE SOURCE! I will still try to wholesale deals because they are everywhere and you can make a few grand on them quite often. But now I'm going to start going straight to the bank for my own REO's.

now I'm going to either get my hard money lenders to outright buy the REO and double close. and or hold the REO with 5k-10k and double close.

so overall the week was great.

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