[jfkIII]

yes...those are referred to as "hot pockets."

[fishordie]

Olecapt, you and I will just settle for agreeing to disagree and that is great as it is just the nature of forums where facts and opinion sometimes do not always go hand in hand. However, we can perhaps do a bit of analysis to better understand the facts as you have stated them.

1. Olecapt states "For instance there are actually few shorts outside the MLS. It is very close to impossiible with most lenders to short a home without some months of listing in the MLS. So advice to intercept before the MLS listing is quite impractical."

FOD response: I have done 3 of these shorts in the last 6 months in addition to REO purchases none of which were on the multiples a day before my offer was accepted in principal and submitted to the Lender for approval. In the last 18 months I and members of my extended family including my Xwife who is a real estate agent and broker as well as my X brothers and Xsister in law have done a total of 31 units. Friends who I have turned on to the process account for another 10 units for a total of 41 properties in just the last 18 months. All were either shorts or REO's. In every case we were the first to submit our offer and in every case there were followup offers at least 20% higher than ours but required loans. Our cash offers were accepted over higher loan required offers about 25 - 30% of the time. Times are changing or have changed based on the time a listing agent has to wait for offers on REO's which again are what is driving my decision to move towards shorts. This market is constantly in flux as the government attempts to appear to help main street. As investors we must think out of the box to keep ahead of the curve.

Though we offered on about 150 properties total we did obtain the 41 noted units and have a very happy and productive property manager handling them all at only 100 dollars a month per unit all in including collection of rents, oversight of maintenance and repairs both immediately after purchase and during rental periods and tenant abuse (Of which we have been lucky with no abuse and almost no turnover of tenants). In every case we are providing some of the nicest homes in the area because we include about 1000 dollars worth of new or newer appliances, fresh and attractive paint, new or newer carpets, etc. as part of the roughly three to six thousand dollars in repairs/upgrades upon purchase of a property. Our units are always rented prior to the completion of the work with full security and prepaid rents for the upcoming period.

Somehow, we must fall under the catergory of lucky based on your assessments. I prefer to think we followed my advice as well as the fact my Xwife works non stop and has always been a work horse and learned a great deal from me. She understands the process intimately and based on the realtionship she has created with most of the lenders or lenders agents who know when she makes offers her clients never back out and the deals are done within 10 days or less of acceptance we are getting amazing deals. do not believe for one second we are unique as this goes on all the time with countless other investors.

What Olecapt fails to note is the lenders are relying on just a few agents or mediator services to perform these tasks especially for REO's. These are very coveted transactions and those few insider agents hold on to them very tightly. Knowing those agents as well as proper mediator or short sale transaction specialists absolutely does give a performing investor a decided advantange over an unproven investor requiring loan funding. Additionally cash buyers can close in under 10 days of lender approval where an individual requiring loans cannot come close. To say this is not part of the analysis performed by the lenders or their agents and gives a great edge to the cash buyer just falls flat in the face of facts.

2. Olecapt states "There are further tactics to minimize cost while waiting out a short that FOD obviously does not know. Or, if he does, he is keeping his mouth closed. "

FOD answer: I hope you do not expect me to put on an entire seminar of the information I have gathered in over 35 years in writing on this forum. I have told folks who PM me I will try to answer any questions they may have but this forum is not my life nor do I hold anything back. I do enjoy writing here though. HOWEVER PERHAPS YOU ARE WILLING to take the same amount of time writing that I have and enlighten the readers with this additional information. I am sure it would be greatly appreciated by all and would be much more helpful than the industry created and somewhat biased data you have been presenting on an ongoing basis. Statistics do not help anyone but definitive information on how to save monies certainly will. Perhaps sharing some of your knowledge might even bring you some new customers. I FOR ONE HOPE YOU TAKE ME UP ON THIS.

3. Olecapt states "It is always possible to find an agent who will cut commissions. They are the ones starving and the part time and those leaving the business. YOu may also find some PMs who really don't do buyer/seller RE who will take a low commission. You can also find listing only agents who will MLS your property for a flat fee. Or you can save it all and do it yourself. A knowledgable investor can do that or even get licensed...a small cost if you are really working at it. "

FOD answer: Hmmm, my Xwife understands the need to produce and is receiving a much higher split based on the numbers from the Brokerage she works under based on annual volumn not based on single sales. Enough of a split to make it not worthwhile to use her own brokers license as she can use the leverage, advertising budgets, etc. of the large broker she works for. She has discounted just about every fee as have every broker/agent I have used on the last over 35 years. When a buyer or seller knows all the issues and has done his or her due dilligence that individual usually knows more than an agent especially once the investor has paid attention to a few transactions.

By making the lives of my agents simple I have saved countless amounts of monies in commissions. Absurd to lump every discounting agents into the loser catagory. Smart Agents know 6% is no longer a standard fee but that is up to the individual. Those insisting on that amount will not get my or my referals business. Referals are the backbone of this industry and if you are not thinking out of the box you will lose out on future business. More importantly as the investors, buyers and sellers become more and more savvy, if for no other reason than necessity, they will continue to discover those agents will to do more work for less monies. No agent loses money on Shorts or REO's once they disover a true knowledgeable and able buyer or seller who is ready, willing and able to buy or sell.

The reason I never used my real estate license is the value of time. I want others to find and investigate potential properties for me and as I have noted I have legions of agents wanting my business. There is just no cost in agents doing this work for you however you can use your own license on the sell side. Unfortunately you also need a brokers license or you have to hang your agents shingle with a licensed broker. If you only do your own transactions chances are you will lose 50% of the commission to the broker split. Now, if you have a significant other who can sell properties or find properties while you are working on your present project this is a great way to go but you have to establish if your already working significant other makes more money in their present job. If they are out of work with little hope of finding work taking the classes and exams and earning your agent license is a good way to save monies. That could certainly apply in this job lacking economy.

4. Olecapt states "Note however if you don't know pretty precisely what you are doing this sort of tactic can cost you a good bit of money. We regularly see a lot of sloppy pricing some bordering on the inexplicable. REOs underlisted by more than 100K for instance.

FOD Reply: The asking price is a meaning less figure if you follow the advice I have noted for years on this and other forums. Once a buyer completely understands the "Value" of a given property they will not be driven by asking price. As you note properties can be undervalued or over vlaued by huge amounts yet will eventually sell to the best and strongest overall offer which undoubtedly will be much, much higher than an extremely undervalued asking price and well below an over price home. I have noted in the past this underpricing strategy is just a new way of getting the juices flowing in bidding wars which uses the proven methods of an Auction mentality to get prices above where perhaps they should be. This is another way sellers agents are thinking out of the box. Starting with a very, very low asking price gets the bids flowing and prices rising. There really is a method to that underpricing madness rather than just a rediculous oversight by the listing broker.

In my case and many others the best overall price is rarely the highest offer. Thus, uninformed buyers will continually fall short in their near asking price offers as savvy cash investors or buyers offer prices at true "Value" levels irrespective of the asking price. Again, knowledge and due dillegence are the key to being a profitable investor or an investor who loses their shirt or obtains no properties complaining they are always getting outbid.

5. Olecapt states:"I see little if any savings for cash. The banks pay very little attention unless the property is troubled when they simply ban all funding but cash"

FOD reply: Again, it appears as if your and my experiences are quite different or perhaps you have been unwilling to offer or accept the numbers buyers like myself are offering and sometimes obtaining. Many agents have been behind the falling market in advising their clients to offer or accept low price offers so they can just move on. Perhaps you prefer to represent buyers not as interested in making this a business rather they are looking for residences to live and nest in or hold long term. Retirment folks rarely fall into the investor category. Those buyers have little to do with what I am discussing as those buyers have to add value or cost to the emotionality of a residence and that is not a good or proper business decision based on my approach.

Of course the types of buyers or sellers you choose to represent are your business and you are the only one to decide who your are comfortable representing. There are many agents like yourself not willing to deal with self admitted bottom dwellers like my self and that is reasonable however for every one like yourself there ar 10 who love having a client like me. I even have some very high end agents who started out about the same time as I who are friends who think like you do and have never represented me. Very, very good agents but not the right fit for me. I do believe over the last 5 or 10 years those friends now regret their decision. The Mafia had the right of it when they stated this is just business... Nothing personal.

6. Olecapt states "In general cash buyers completely outbid the people financing in the low end of the market. They simply make bids that are well above the FHA/VA appraisal and quite dominate the market. There are effectively no FHA/VA sales below 40 per sf. What non-investor sales occur down there are HUD or similar."

FOD response: Not a single all cash purchaser I advise has ever been the highest priced bidder on any property... EVER. That includes myself and I have advised or purchased, as I have noted, on thousands of properties. The lenders will almost always look at the overall strength of the offer and the offerer and cash will almost always have a stronger overall position than one requiring a loan. However, the amount of difference in price will be property, timing and lender specific and will not be an accross the board hard percentage. I have made that lower than market percentage as part of my equation for success and therefore the majority of my offers are not accepted but who cares as long as I have had an ongoing series of successes with reasonable percentages of accepted offers to non accepted offers and profits in all market situations up or down.

A new investor who can save monies by doing their own repairs and upgrades can start their careets in real estate investing with lower margins both to start establishing a cash reserve and to use the experience to learn more towards the future. Those of us who have done this for years are looking for better returns and margins but again rarely rely on home runs to make our monies. Thus a new investor purchasing a $75,000 property in Las Vegas should expect to make $7500 to $10,000 on their first effort. It could be more and it could be less but the experience will be invaluable. If you start off hitting singles you will eventually hit doubles and triples. This is just part of learning the business. In addition to profit there will be some business writeoffs you might enjoy increasing your overall profit but that is something to discuss with your accountant. As the investor becomes more profficient the margins will increase as long as the Value is established at purchase.

As I have noted in the past savvy investors are just not interested in the 150,000 or 170,000 and above price ranges in Las Vegas unless they can get them substantially below market value. That market, in my opinion, still has a ways to fall based on affordability and the income and debt ratios required to obtain a loan in today's tough lending requirment market place. A smart investor will look a those FHA or other financed properties to evaluate where the resale market lies or at least as an indication of the FHA market. FHA loaned properties rarely depict the actual market valuation for investors as these are properties which were passed on at lower prices by the true market setters of today the investor. Most homes in this price range or above can be found being sold on the short or REO market to cash buyers for a large percentage less than what they sold to the FHA buyer for. This is where reviewing the comps of sold FHA or financed properties as well as REO/short sale properties comes in handy to see a true price picture. This is why strictly using comps to rely on setting the market is a huge mistake made by many neophite investors or buyers. In my book comps are only for information and not for setting a true "Value" of a property.

When properties were on the huge upswing Comps were certainly important but then again anybody could have made money buying and selling then. Today there is so much more that goes into investing, however, when you understand all the parameters, unlike most agents, you begin to realize the equations used in the past will just get you into trouble today and most likely tommorrow.

7. Olecapt states "There do appear to be some very interesting situations where people are picking up trustee sales for extremely low prices...I think though this is insider stuff with bank connivance. You don't see that pattern on shorts however. Very few shorts are selling cheap enough to be good flips."

FOD replies: You have just made my point for me. Investors do not look to buy every property rather we buy the right property at the right price for us. We do not look only for patterns in what is selling rather we look at "Value" being property specific and are only interested in the right deal.
Your own words state there are some of these deals out there but are not the norm. Someone once said words to the effect that if everyone could do it they would. This is a winning business only for those folks who are knowledgeable, make the right connections and are aware of where those right connections and knowledge can be obtained. In my world, anyone willing to take the time and learn can obtain that knowledge and connections.

Heck, my family were dirt farmers in a tiny town in a bad section of Wyoming. I chose to learn everything I could about this business and had no family help. They were by no means business folks and had very little money. Someone also said words to the effect Those who aspire to greatness are destined to be condemned by those who aspire to mediocrity. I prefer to think I aspire to greatness and have always left mediocrity to others. Hard work and information gathering were and are my strong suits but I made that so by decision not by circumstance.

As a note: Real Estate has never been my main business just my most profitable one. My own business only paved the way to aquire funds to be invested in the real profit center which is real estate both investing in properties and providing rediculous percentage hard money loans for high income individuals with plenty of equity in their homes but poor credit scores. By using a licensed broker to do those loans investors can make 12 - 17% on their monies on properties with 50% loan to value ratio's. This really is a crazy economic environment with plenty of ways to earn monies in Real Estate. Again, cash is king so use it wisely and do not squander it on deals without adequate information gathering.


Olecapt, I am not hear to argue with you or put you down for your opinions. I do happen to disagree with many of your statements based on my experiences but again we can agree to disagree. Not a problem by me.

FOD

[jfkIII]

Has Fish taken Tony's place????

[tony soprano]

Originally Posted by jfkIII

Has Fish taken Tony's place????

Well, I enjoy reading his thoughts, so I guess worse things could happen I've been much better served by paying attention to the people actually "doing" than listening to the peanut gallery sitting on the sidelines lecturing on how it can't be done.

[olecapt]

Part 1...

Originally Posted by fishordie

Olecapt, you and I will just settle for agreeing to disagree and that is great as it is just the nature of forums where facts and opinion sometimes do not always go hand in hand. However, we can perhaps do a bit of analysis to better understand the facts as you have stated them.

1. Olecapt states "For instance there are actually few shorts outside the MLS. It is very close to impossiible with most lenders to short a home without some months of listing in the MLS. So advice to intercept before the MLS listing is quite impractical."

FOD response: I have done 3 of these shorts in the last 6 months in addition to REO purchases none of which were on the multiples a day before my offer was accepted in principal and submitted to the Lender for approval. In the last 18 months I and members of my extended family including my Xwife who is a real estate agent and broker as well as my X brothers and Xsister in law have done a total of 31 units. Friends who I have turned on to the process account for another 10 units for a total of 41 properties in just the last 18 months. All were either shorts or REO's. In every case we were the first to submit our offer and in every case there were followup offers at least 20% higher than ours but required loans. Our cash offers were accepted over higher loan required offers about 25 - 30% of the time. Times are changing or have changed based on the time a listing agent has to wait for offers on REO's which again are what is driving my decision to move towards shorts. This market is constantly in flux as the government attempts to appear to help main street. As investors we must think out of the box to keep ahead of the curve.

You have sharply changed your story. Catching shorts and REOs early is a well known and practiced tactic. Good listing agents won't let you do it...they keep it open for some days or a week. But that is far, far different than intercepting them before they reach the MLS - the strategy you implied in your earlier post.

The size of financed offers was being routinely overstated for a long time. And the listing agents were correctly rejecting them on the basis that they would not appraise. You were not making a lower bid...you were simply bidding where the price would end up on the appraisal. In general in the low end the investors are simply offering prices higher than the property will appraise...thus making financing impossible except perhaps for high percentage down conventionals which still appear in the mix.

I have some more transactions than you and cohorts and was personally involved in each. I understand the territory reasonably well. I also appear to make far more offers than you et al...though that is likely a matter of strategy.

Though we offered on about 150 properties total we did obtain the 41 noted units and have a very happy and productive property manager handling them all at only 100 dollars a month per unit all in including collection of rents, oversight of maintenance and repairs both immediately after purchase and during rental periods and tenant abuse (Of which we have been lucky with no abuse and almost no turnover of tenants). In every case we are providing some of the nicest homes in the area because we include about 1000 dollars worth of new or newer appliances, fresh and attractive paint, new or newer carpets, etc. as part of the roughly three to six thousand dollars in repairs/upgrades upon purchase of a property. Our units are always rented prior to the completion of the work with full security and prepaid rents for the upcoming period.

Somehow, we must fall under the catergory of lucky based on your assessments. I prefer to think we followed my advice as well as the fact my Xwife works non stop and has always been a work horse and learned a great deal from me. She understands the process intimately and based on the realtionship she has created with most of the lenders or lenders agents who know when she makes offers her clients never back out and the deals are done within 10 days or less of acceptance we are getting amazing deals. do not believe for one second we are unique as this goes on all the time with countless other investors.

Sorry but it takes little smarts to make reasonable money in the present and immediate past Las Vegas market. Particularly those working the low end have done pretty well. I made no projection that you did not do well. It was hard to screw it up with cash and a little care.

What Olecapt fails to note is the lenders are relying on just a few agents or mediator services to perform these tasks especially for REO's. These are very coveted transactions and those few insider agents hold on to them very tightly. Knowing those agents as well as proper mediator or short sale transaction specialists absolutely does give a performing investor a decided advantange over an unproven investor requiring loan funding. Additionally cash buyers can close in under 10 days of lender approval where an individual requiring loans cannot come close. To say this is not part of the analysis performed by the lenders or their agents and gives a great edge to the cash buyer just falls flat in the face of facts.

We are very well aware of the structure of the REO market. We considered playing in it early on but decided to go buyer only pretty much as the other was a difficult path requiring large cash resources and significant man power. It also has vast risk as you can easily end up holding an empty bag one day.

These places are factories who could not give less of a damn who you are. Move the stuff is the cry. It is a very simple business at the low end where they pretty much collect cash offers as listed. It is however much more difficult as they get to the higher range. Looked at one today...Humeston...been on the books for four months and he has had no offer. That is because it is a tricky house outside regular parameters. They can't deal with that.

2. Olecapt states "There are further tactics to minimize cost while waiting out a short that FOD obviously does not know. Or, if he does, he is keeping his mouth closed. "

FOD answer: I hope you do not expect me to put on an entire seminar of the information I have gathered in over 35 years in writing on this forum. I have told folks who PM me I will try to answer any questions they may have but this forum is not my life nor do I hold anything back. I do enjoy writing here though. HOWEVER PERHAPS YOU ARE WILLING to take the same amount of time writing that I have and enlighten the readers with this additional information. I am sure it would be greatly appreciated by all and would be much more helpful than the industry created and somewhat biased data you have been presenting on an ongoing basis. Statistics do not help anyone but definitive information on how to save monies certainly will. Perhaps sharing some of your knowledge might even bring you some new customers. I FOR ONE HOPE YOU TAKE ME UP ON THIS.

Actually very little of a 35 year investor experience is applicable. This has been new territory for the last three years. I have watched four or five people try to make a go of specialty short sale operations ...with very little success including an operation by my brokerage that lasted six months before going belly up. I do see a couple now that are working but they are lawyer based rather than real estate brokerage.

Sure the same old numbers work. A rental is a rental is a rental. But the acquistion techniques are different from any other period.

And no I don't think I will do any tutorials on how to properly do short sales. I have developed a reasonable set of techniques for the buyers side that work and cost little but time. I don't think I am going to make this generally available save to clients. That is what they pay for...so I should not give it away.

'

3. Olecapt states "It is always possible to find an agent who will cut commissions. They are the ones starving and the part time and those leaving the business. YOu may also find some PMs who really don't do buyer/seller RE who will take a low commission. You can also find listing only agents who will MLS your property for a flat fee. Or you can save it all and do it yourself. A knowledgable investor can do that or even get licensed...a small cost if you are really working at it. "

FOD answer: Hmmm, my Xwife understands the need to produce and is receiving a much higher split based on the numbers from the Brokerage she works under based on annual volumn not based on single sales. Enough of a split to make it not worthwhile to use her own brokers license as she can use the leverage, advertising budgets, etc. of the large broker she works for. She has discounted just about every fee as have every broker/agent I have used on the last over 35 years. When a buyer or seller knows all the issues and has done his or her due dilligence that individual usually knows more than an agent especially once the investor has paid attention to a few transactions.

By making the lives of my agents simple I have saved countless amounts of monies in commissions. Absurd to lump every discounting agents into the loser catagory. Smart Agents know 6% is no longer a standard fee but that is up to the individual. Those insisting on that amount will not get my or my referals business. Referals are the backbone of this industry and if you are not thinking out of the box you will lose out on future business. More importantly as the investors, buyers and sellers become more and more savvy, if for no other reason than necessity, they will continue to discover those agents will to do more work for less monies. No agent loses money on Shorts or REO's once they disover a true knowledgeable and able buyer or seller who is ready, willing and able to buy or sell.

Nope. In actual fact commission are up over the past couple of years and are still trending up. As the herd thins the survivors tend to value their services more highly.

First off one sure way not to attract buyers is to drop the buyers agents commission. It is amazing. All those hungry agents walk their clients right past the home because of the low commission. Sure you can sell it anyway...with perhaps 25% of the exposure and likely a few percent off the price.

On the listing side there is more room...and I might well work a deal with a really good investor who demands little work. A perfect little gem at a low price..yeah I might come down a bit. But expensive? Or difficult? Nope.

Agent don't make their living off single investors...and would be dumb to try and do so. We have at the moment multiple buyers ranging from virtually certain to distant and unlikely. And we add to the list every day. Sure an investor who buys two or three or four properties a year is of interest. But unlikely to be among the top 4 or 5 clients.

The reason I never used my real estate license is the value of time. I want others to find and investigate potential properties for me and as I have noted I have legions of agents wanting my business. There is just no cost in agents doing this work for you however you can use your own license on the sell side. Unfortunately you also need a brokers license or you have to hang your agents shingle with a licensed broker. If you only do your own transactions chances are you will lose 50% of the commission to the broker split. Now, if you have a significant other who can sell properties or find properties while you are working on your present project this is a great way to go but you have to establish if your already working significant other makes more money in their present job. If they are out of work with little hope of finding work taking the classes and exams and earning your agent license is a good way to save monies. That could certainly apply in this job lacking economy.

You are simply out of date. There are lots of places to hang a shingle with low transaction costs. YOu need not even be in the MLS under some circumstances which is the more expensive thing.

4. Olecapt states "Note however if you don't know pretty precisely what you are doing this sort of tactic can cost you a good bit of money. We regularly see a lot of sloppy pricing some bordering on the inexplicable. REOs underlisted by more than 100K for instance.

FOD Reply: The asking price is a meaning less figure if you follow the advice I have noted for years on this and other forums. Once a buyer completely understands the "Value" of a given property they will not be driven by asking price. As you note properties can be undervalued or over vlaued by huge amounts yet will eventually sell to the best and strongest overall offer which undoubtedly will be much, much higher than an extremely undervalued asking price and well below an over price home. I have noted in the past this underpricing strategy is just a new way of getting the juices flowing in bidding wars which uses the proven methods of an Auction mentality to get prices above where perhaps they should be. This is another way sellers agents are thinking out of the box. Starting with a very, very low asking price gets the bids flowing and prices rising. There really is a method to that underpricing madness rather than just a rediculous oversight by the listing broker.

In my case and many others the best overall price is rarely the highest offer. Thus, uninformed buyers will continually fall short in their near asking price offers as savvy cash investors or buyers offer prices at true "Value" levels irrespective of the asking price. Again, knowledge and due dillegence are the key to being a profitable investor or an investor who loses their shirt or obtains no properties complaining they are always getting outbid.

Asking price is just that. It is sometimes a useful number other times not. It is for instance a reasonable way to get a short started.

Bad pricing is virtually always dumb. If you heavily underprice you may start a bidding war...but it will almost invariable end below where you would have been with an initial attractive but reasonable price. If you overprice it sits there and your eventual return drops as it ages.

[Swigchow]

Fishordie - your posts are very enlightening. What is the minumum amount of cash needed to begin your real estate investment strategy? Unfortunately, a beginner would find it more challenging to find a good realtor to discount commissions rather than an investor who can offer buy and sell opportunities for many properties.

Btw, how can you write so much? Do you use speech recognition software?

[olecapt]

5. Olecapt states:"I see little if any savings for cash. The banks pay very little attention unless the property is troubled when they simply ban all funding but cash"

FOD reply: Again, it appears as if your and my experiences are quite different or perhaps you have been unwilling to offer or accept the numbers buyers like myself are offering and sometimes obtaining. Many agents have been behind the falling market in advising their clients to offer or accept low price offers so they can just move on. Perhaps you prefer to represent buyers not as interested in making this a business rather they are looking for residences to live and nest in or hold long term. Retirment folks rarely fall into the investor category. Those buyers have little to do with what I am discussing as those buyers have to add value or cost to the emotionality of a residence and that is not a good or proper business decision based on my approach.

Of course the types of buyers or sellers you choose to represent are your business and you are the only one to decide who your are comfortable representing. There are many agents like yourself not willing to deal with self admitted bottom dwellers like my self and that is reasonable however for every one like yourself there ar 10 who love having a client like me. I even have some very high end agents who started out about the same time as I who are friends who think like you do and have never represented me. Very, very good agents but not the right fit for me. I do believe over the last 5 or 10 years those friends now regret their decision. The Mafia had the right of it when they stated this is just business... Nothing personal.

I have done reasonably well in this market representing primarily buyers. Often investors. I even regularly point out that the best investment potential lies in the bottom tiers. This is not hard stuff. But you need to know you are not going to do as well in Summerlin as in 89108.

Note however that the appreciation play...when it eventually comes back...will likely be much better in Summerlin or the NW than in 89108.

I also play some reasonably heavy stuff in the NW and Summerlin. Which is a much different sale.

And I agree that you can find 10 for 1...of which 8 maybe 9 are worthless. I remain shocked by how incompetent this profession is. But go ahead and turn down the talent for a percent or two. You will pay in the end.

6. Olecapt states "In general cash buyers completely outbid the people financing in the low end of the market. They simply make bids that are well above the FHA/VA appraisal and quite dominate the market. There are effectively no FHA/VA sales below 40 per sf. What non-investor sales occur down there are HUD or similar."

FOD response: Not a single all cash purchaser I advise has ever been the highest priced bidder on any property... EVER. That includes myself and I have advised or purchased, as I have noted, on thousands of properties. The lenders will almost always look at the overall strength of the offer and the offerer and cash will almost always have a stronger overall position than one requiring a loan. However, the amount of difference in price will be property, timing and lender specific and will not be an accross the board hard percentage. I have made that lower than market percentage as part of my equation for success and therefore the majority of my offers are not accepted but who cares as long as I have had an ongoing series of successes with reasonable percentages of accepted offers to non accepted offers and profits in all market situations up or down.

Utter nonsense. Not rational. Virtually all bids at the bottom are cash. So you getting into them differentiating between cash bids on other than price...BS all the way.

The lender get about six fields on their ports. None deal with anything except money and time. And the only one that really counts is the bottom line. If you really think they care who the buyer is you have lost your mind.

They do throw out financed bids that are above the likely appraisal. That is rational.

But cash against cash...the go with the high bid. Everytime.

A new investor who can save monies by doing their own repairs and upgrades can start their careets in real estate investing with lower margins both to start establishing a cash reserve and to use the experience to learn more towards the future. Those of us who have done this for years are looking for better returns and margins but again rarely rely on home runs to make our monies. Thus a new investor purchasing a $75,000 property in Las Vegas should expect to make $7500 to $10,000 on their first effort. It could be more and it could be less but the experience will be invaluable. If you start off hitting singles you will eventually hit doubles and triples. This is just part of learning the business. In addition to profit there will be some business writeoffs you might enjoy increasing your overall profit but that is something to discuss with your accountant. As the investor becomes more profficient the margins will increase as long as the Value is established at purchase.

True but irrelevant to the discussion.

As I have noted in the past savvy investors are just not interested in the 150,000 or 170,000 and above price ranges in Las Vegas unless they can get them substantially below market value. That market, in my opinion, still has a ways to fall based on affordability and the income and debt ratios required to obtain a loan in today's tough lending requirment market place. A smart investor will look a those FHA or other financed properties to evaluate where the resale market lies or at least as an indication of the FHA market. FHA loaned properties rarely depict the actual market valuation for investors as these are properties which were passed on at lower prices by the true market setters of today the investor. Most homes in this price range or above can be found being sold on the short or REO market to cash buyers for a large percentage less than what they sold to the FHA buyer for. This is where reviewing the comps of sold FHA or financed properties as well as REO/short sale properties comes in handy to see a true price picture. This is why strictly using comps to rely on setting the market is a huge mistake made by many neophite investors or buyers. In my book comps are only for information and not for setting a true "Value" of a property.

The above appear to be goobledegook. It makes no sense. FHA financing applies to houses passed by the investor at a lower price? That is positively nuts.

In August 1011 homes sold between 150K and 300K. Of these 253 sold for cash at a median of 185.5 and mean of 198.5. FHA/VA moved 424 homes at a median of 185K and a mean of 195.8. So in that market segment it is clear that cash paid more if anything than FHA/VA.

That is the problem with this stuff. The real numbers never fit the desired pattern.

When properties were on the huge upswing Comps were certainly important but then again anybody could have made money buying and selling then. Today there is so much more that goes into investing, however, when you understand all the parameters, unlike most agents, you begin to realize the equations used in the past will just get you into trouble today and most likely tommorrow.

Opinion is always safe...just stay away from facts.

7. Olecapt states "There do appear to be some very interesting situations where people are picking up trustee sales for extremely low prices...I think though this is insider stuff with bank connivance. You don't see that pattern on shorts however. Very few shorts are selling cheap enough to be good flips."

FOD replies: You have just made my point for me. Investors do not look to buy every property rather we buy the right property at the right price for us. We do not look only for patterns in what is selling rather we look at "Value" being property specific and are only interested in the right deal.
Your own words state there are some of these deals out there but are not the norm. Someone once said words to the effect that if everyone could do it they would. This is a winning business only for those folks who are knowledgeable, make the right connections and are aware of where those right connections and knowledge can be obtained. In my world, anyone willing to take the time and learn can obtain that knowledge and connections.

Heck, my family were dirt farmers in a tiny town in a bad section of Wyoming. I chose to learn everything I could about this business and had no family help. They were by no means business folks and had very little money. Someone also said words to the effect Those who aspire to greatness are destined to be condemned by those who aspire to mediocrity. I prefer to think I aspire to greatness and have always left mediocrity to others. Hard work and information gathering were and are my strong suits but I made that so by decision not by circumstance.

The deals quoted are trustee sales. There also appear to be some where the mortgage is bought from the holder prior to the sale.

Are you really off doing trustee sales with bank conivance? That would be interesting. Do you see a risk of going to jail? With all your family members?

Sometimes I don't think you follow what we are talking about. You really are buying property at trustee sales well below the amount owed to the bank?

How you do that? (Without risking going to jail)

As a note: Real Estate has never been my main business just my most profitable one. My own business only paved the way to aquire funds to be invested in the real profit center which is real estate both investing in properties and providing rediculous percentage hard money loans for high income individuals with plenty of equity in their homes but poor credit scores. By using a licensed broker to do those loans investors can make 12 - 17% on their monies on properties with 50% loan to value ratio's. This really is a crazy economic environment with plenty of ways to earn monies in Real Estate. Again, cash is king so use it wisely and do not squander it on deals without adequate information gathering.


Olecapt, I am not hear to argue with you or put you down for your opinions. I do happen to disagree with many of your statements based on my experiences but again we can agree to disagree. Not a problem by me.

FOD

I am in no danger FOD. I don't think your knowledge is any risk to my views.

[fishordie]

Olecapt,

I am very glad you are doing well. As I have noted I am more than happy to agree to disagree with your views. Just the nature of life. I am also sorry you did not take me up on my request to even place into writing a few of your professional views on how to save monies in a short or REO situation but I really did not expect you to note anything of real substance. I do however believe you might be losing a lot of business based on your statements and unwillingness to provide even the most simple assistance on this site. I am not an agent yet I am continually helping folks I do not even know. You on the other hand seem to enjoy being contrary but that is of course your right. I will leave being confrontational to you but you seem to do a great job of demeaning your own profession. My statements speak for themselves and those who would like more information or have questions just need to PM me. I really could care less about conversing much more with you as you have nothing positive to offer. That is a shame especially if you really are as knowledgeable and successful at real estate as you claim.

FOD

[airics]

[aitchem]

"I really could care less about conversing"

I know this has nothing to do with the topic but surely you should be saying "I couldn't care less" otherwise there are other topics that you think less of than Olecapt's comments?