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Mn, the bottom line is that you made a post that made it seem like a cakewalk to go buy at auctions, and you clearly stated that they were providing drive by photos.
They were not providing an interior inspection report.
One reason they don't is because they would be providing an illegal trespassing service. Only the property owner can give permission to enter the property.
The other is that AZ requires home inspectors to be licensed. A licensed inspector would not trespass to do an inspection.
Therefore, the responsibility rests with the buyer to determine the condition of the property prior to buying.
I posted the pitfalls -which anyone contemplating bidding at auctions should consider.
You took exception to my posting the pitfalls. It was like you were saying how can a lowly commish mouth ignorant and unethical realtor know something that Mn, the quick study, savvy investor, soon to be shark, doesn't know?
So instead of discussing the issue in a mature manner, you proceeded with your smoke screen of rediculously accusing me of writing a 1600 word essay, when it was only 275, criticizing my method of writing and your realtor bashing and personal attacks.
But somewhere in the middle of your realtor bashing smoke screeen you finally agreed that I was right.
I don't bid at the auctions any more because it is more productive for me to buy from other sources. Bidders at the trustee sales are not competition for me. It makes no difference to me how many people are there bidding.
People who choose the auctions to buy properties are not potential real estate buyer clients for me either. They are looking to buy wholesale and I only work with retail buyers. So I have no horse in that race.
My advice was to prevent other readers from thinking they could hire someone to do a title search, and the other services they provide and make a buying decision based on drive by photos of the front of the house.
You can keep up your smoke screens and realtor bashing, and personal attacks on me, but if I've helped one reader on this forum understand that buying at trustee sales require knowledge and education, and that buying without an inspection is a huge risk, then that makes me happy.
It's interesting that when someone doesn't agree with what a realtor says, instead of debating the merits of the issue in question, they always resort to realtor bashing, and other inane type insults.
I disagree. Real Estate is cyclical. Feast and Famine. The nail salon business provides a service that many women and some men use on a regular basis regardless of economic conditions.
The biggest factor for one to be successful selling houses is that market conditions have to be conductive for selling houses. When the market is red hot, most active RE Agents will have success. When it is weak a very small percentage are successful. Bill, you are involved in more areas than just RE sales. Obviously just selling houses is not enough even for you.
Perhaps there is a reason states require much more expertise on the nail business compared to selling houses. Perhaps there is more skill needed in the nail business, in selling houses its timing and location.
Your perception of a hot market being the formula to success in real estate is the same erroneous perception as others who have gotten into the business and failed.
They failed because they thought they could come in and make a fortune in a hot market, but they did not have the education, nor the skills required.
Many of the agents who came into the hot market failed because they didn't know how to get listings. I was not a realtor during 2005 and 2006, but I know a lot about the agents who failed during that time. The agents who succeeded were the ones who were well educated in real estate, and had the skills and talent to get a lot of listings. They also did well in the down market.
New agents were hired into teams as buyer agents, but they couldn't buy houses because they were snapped up in front of them. Many of them failed during the feast years. The skilled listing agents succeeded because they had the houses to sell, and kept on getting listings from their vast sources.
I'm not a listing agent. I don't have that skill, and I don't feel suited to that end of the business. The great listing agents make a lot of money in any market. They have the selling skills and talent necessary to sell their service to sellers. They have the marketing skills required to attract those seller clients. And they work very hard at it.
I'm a buyers agent. I have that skill. That skill requires the patience to understand what a buyer wants and to be patient to give them whatever education they need, to be patient to learn what they need, and to take the time to help them find it.
I believe that skill is a customer relation type skill that I developed over my 28 years as an airline pilot for Pan Am.
Yes, I do other things. I have listed bank owned properties. I've done bpo's for banks, and I rehab houses.
I don't have to do any of that. I do it because I love the business. I had a great career as a pilot, make a comfortable living with my retirement funds, and work because that is therapy to me. I enjoy working with people, and because I work hard at it, I can confidently say that I'm good at what I do.
Rehabbing is my primary business because I take great pride in being able to transform a mistreated property into something desirable. It's a skill I learned in the 70's and found that it is what I like to do most today.
I also enjoy working with buyers, especially first time home buyers, who really need assistance, so I continue to work with buyers. But because of my rehab business I don't have the time to work with many.
Bill. Not all of us constantly write 275 word essays. I suspect that your essays are in the spirit of "filling the pipeline" to prove how much we need your expertise. Simply say these $3K services cannot legally get you in and move on. I was told that sometimes these homes have lock boxes still attached, or a back door is open, or people "get it other ways" (use your imagination).
In any case there was no reason to write your short story other than in an attempt to prove that you are the guy in the know (a.k.a. "filling the pipeline").
It's as simple as that. We can go back and forth if you chose but I'm not a "real estate basher" as you assume.
I was told that sometimes these homes have lock boxes still attached, or a back door is open, or people "get it other ways" (use your imagination).
Absolutely there are other ways to get in. The important thing for others who may consider trustee sales is to get in and inspect, understanding the risks involved, or pass on that house and go to the next one.
While it's possible, it's extremely rare to find a lock box on a trustee sale house. I was never lucky enough to find one. The realtors supra lock boxes are expensive and if the house was listed, the realtors are quick to remove their locks and sign before the trustee sale.
I have found a couple of windows unlocked.
Wasn't lucky enough to find a door open.
Sometimes some blinds are open, but that's not sufficient for me because I needed to get into the bath rooms and kitchens to make sure copper thieves haven't been in to do their dirty work, in addition to inspecting the structure.
Below are a few pics, for anyone interested, that show a small sample of what people will do. These owners just took things. They didn't do any malicious damage.
The house didn't sell at auction because the bank put the mortgage balance as the minimum bid. So they took it back and listed it on the mls at a very high price, and it took me 3 months of negotiating to finally get it at a reasonable price that reflected the condition.
The exterior of the house was ok, only needing minor paint touch up, and of course new front and rear lawns. But that is standard.
The seller took the entire kitchen, except for the island cabinets. You can't match cabinets, so I gave half to my landscaper and used the other half for laundry room cabinets.
Every ceiling fan in the house was taken, along with every light fixture.
A large chandelier was taken. It was hanging from a 19 foot ceiling.
The air conditioning unit for the upstairs was taken, along with the pad. They cut the tubing, requiring extra work in order to replace the missing ac unit.
They took the shower wall panels off the downstairs guest bath.
They even removed and took 3 doors.
Of course these are the type houses I like. This and worse. The uglier the better. We finish this one next week and it will be around a $32k rehab.
For the OP, the investment opportunities still exist but it is more difficult and you need to develop several sources to buy properties from.
A few "fixers" we walked into smelled like urine and other disgusting things and there were foot prints at the top of a 15' clearstory wall. Must have taken time to throw shoes at it. I love the fist size holes in every door and wall approach to venting. We also enjoy doing the work ourselves.
Your perception of a hot market being the formula to success in real estate is the same erroneous perception as others who have gotten into the business and failed.
They failed because they thought they could come in and make a fortune in a hot market, but they did not have the education, nor the skills required.
Mod cut: Personal
I have been rehabbing for 7 years. Both during the start of the boom until today. Perhaps you have been doing this longer, but I do have some idea of how the real estate market works.
Last edited by Grannysroost; 02-19-2010 at 09:02 AM..
A few "fixers" we walked into smelled like urine and other disgusting things and there were foot prints at the top of a 15' clearstory wall. Must have taken time to throw shoes at it. I love the fist size holes in every door and wall approach to venting. We also enjoy doing the work ourselves.
It can be very bad, and also very unhealthy. Once in Maryvale my business partner and I were looking at an REO to buy, and the listing agent happened to come by at the same time. He was there to get a back window boarded up because they had just had a squatter evicted.
The really sad part was that vandals had gotten in and torn everything up and threw feces all over the walls in several rooms. Yet the squatter, whom the agent said had mental problems, was still sleeping in that place.
We didn't buy it because the bank wanted too much money and there wasn't sufficient spread to fix it up and make a profit.
It is rewarding to take a property that is in bad shape and turn it into something that people want to buy and live in.
Below are some pics of the bath and kitchen in a condo that we finished recently.
The guest bath is a postage stamp and the shower was positioned so that water would go down the walls and was destroying the drywall.
We had a custom shower door made so there would be enough room for the door to open so almost any size person could fit in there. By demo'ing the shower wall we had enough space to do it. Now it's functional and doesn't look cramped like it did before.
The kitchen was outdated. We decided to gut everything and start all over.
It can be very bad, and also very unhealthy. Once in Maryvale my business partner and I were looking at an REO to buy, and the listing agent happened to come by at the same time. He was there to get a back window boarded up because they had just had a squatter evicted.
The really sad part was that vandals had gotten in and torn everything up and threw feces all over the walls in several rooms. Yet the squatter, whom the agent said had mental problems, was still sleeping in that place.
We didn't buy it because the bank wanted too much money and there wasn't sufficient spread to fix it up and make a profit.
It is rewarding to take a property that is in bad shape and turn it into something that people want to buy and live in.
Below are some pics of the bath and kitchen in a condo that we finished recently.
The guest bath is a postage stamp and the shower was positioned so that water would go down the walls and was destroying the drywall.
We had a custom shower door made so there would be enough room for the door to open so almost any size person could fit in there. By demo'ing the shower wall we had enough space to do it. Now it's functional and doesn't look cramped like it did before.
The kitchen was outdated. We decided to gut everything and start all over.
Thanks. However, there is a problem with what we did.
As I said, we gutted everything, and we also replaced the windows with new double pane windows, plus the front door with a built in blind, security door and everything. We demo'd the old clay floor tile and replaced it with new modern tile. It's really a brand new unit except for the structure.
That put us above the price of the other units in the community because the other rehabbers only did cosmetic stuff like new light fixtures, paint walls, and clean the carpet. Some painted the old kitchen cabinets and put in a stove, microwave, but no refrigerator.
We had people who loved it but were afraid it wouldn't appraise. So we took it off the market for awhile. We'll watch the market closely in the community and at the right time we'll get an appraisal ourselves.
We considered renting it because it will cash flow, but then we would have to rent it for several years to justify the cost of repairing any renters damage. So we felt it best to just eat the holding costs, which are reasonable, and put it back on the market at a better time, and after we get an appraisal.
We may put it back on during the first week in April because I expect there will be a lot of buyers wanting to take advantage of the tax credit and get a contract before the end of April. We'll see how it goes.
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