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Winkelman, allow me to clarify something for you. I happen to be extremely busy, and so are many of my colleagues.
My primary business is rehabbing homes. I can do about 12 a year now.
Bill,
I am sure you are a good Real Estate agent and investor and make a good living. I was talking in more general terms about how many "busy" RE Agents post incessantly about how busy they are and how much their market is rebounding. Perhaps Glengarry Glen Ross is a better analogy. Instead of Jack Lemmon on a payphone, its a RE Agent using the computer at the library living in his car posting about how things are turning around. Desperately searching for leads.
I myself rehabbed about 20 homes in Arizona during the boom. Moved on to greener pastures in the gulf coast region and continue to make a good living as a real estate investor. I have never had to blog on the net for business, but perhaps others do things differently. I peruse C-D and other such sites for ideas and to get a feel for how things are in different regions. And to go back to the OP, I think we have at least a couple years to go before I would step back into the seriously depressed markets. Those sticking it out in real estate in places like Arizona are real troopers. It is not easy I am sure.
We'd slap your azz with a personal attack infraction...except that you are correct
Thanks, but I have nothing personal against "The Captain" or any other RE agents here. I just try to go by the mantra "watch what they do, not what they say"
Last edited by Winkelman; 02-13-2010 at 05:28 PM..
MN, I think you're missing my point. I am not giving you advice. I am not trying to spook you. This may very well be a cake walk for you. Again that is not my point.
What I am saying is directed to the readers of this thread who may assume that this is a great place to buy a house and get a fantastic deal. If it were such a great place to get a great deal, I would still be buying there.
My big point is that when one buys a house without inspecting it inside and out, there is a tremendous risk that can cost the buyer many thousands of dollars.
About the sharks. These are professional wholesalers. They are not mom and pop operations. They are large companies. They buy a lot of houses. They have people in the field who do the leg work and email their report instantly. They get into the houses they buy. They do not just do a drive by for their boss.
I can go into a house and in 10 minutes have a good estimate of what it's going to take to fix that house up, and what I can sell it for. These people do the same, and they can do it faster than me.
They do a quick computation, and send that along with pics instantly to their boss who then gives their guy at the auction the houses and prices on which to bid.
They do not want the public there because they bid up the prices. As that happens then the banks tend to place higher opening bids on houses and that reduces the spread that is necessary for a wholesaler.
So they try to discourage the public by bidding up prices on homes that they don't want. They would love to bid up the price on a home that they know is in an expansive soil area and has a cracked slab that will cost $50-$100 to remediate. Then the buyer would pass the word on about how they lost their shirt on a court house auction property.
Again MN, this information is not for you. This is a cakewalk for you, and I know you'll do well.
This is for people who may feel the need to know the potential pitfalls when dealing with court house trustee auctions.
The people who are providing the bidding services for the public cannot go into the house for a client. They are trespassing when they go into the house. So they could not advertise or provide a service that is having them illegally trespass on a property.
Also, if they made a report on the repairs needed, and their estimate was lower than the buyers actual cost later on, the buyer may sue them for the errors, and also for illegally trespassing. So all one is going to get is a drive-by, which is legal.
We agree. You need to get into the home or there is risk. Your 1600 word initial essay on pitfalls to avoid is on one of several websites. You didn't offer anything new... Sorry for getting suspicious about someones motivations who admits they are "filling the pipeline".
So if someone is going to plunk down a lot of money they should do their due dilligence. When they do, they will quickly learn that there is a whole lor of running around and a certain level of expertise that nearly everyone would consider to be a huge barrier to entry. On such service is to pay for someone to do do the majority of the leg work. It sounds like you can do all of that yourself. Good for you. I can sell my home myself as well but most of the time I hire someone. I do what I do best, they do what they do best.
So how did we get here??? I was initially stating that there are services that reduce the leg work for a guy who wants to buy a home at the auction and I was checking into it. The next thing I get is a 1600 word essay. I guess you were trying to save the world from making grave errors.
But you are still assuming. You don't know the specific value add that is offered. You asssume you know the company and their background. It's like me assuming your 7% sales fee is the identical service to someone elses. You are assuming that they are concerned about "getting sued". I think you assume that people using this service would want to re-hab. Most people are inept with numbers, inept in business, inept in communication skills etc etc. So there is no doubt that this undertaking can be too much for most. We suspect we agree on this last point.
Oh. I am not buying the fact that those "Sharks" are trying to bid-up the junk. A "shark" as you call him would have to be an absolute positive idiot to bid on a cracked foundation thinking they know when the newbee is going to stop the bidding. I suspect they would be chuckling knowing that someone bought a problem home thinking they have NO idea what they are in for! I had a friend who said "if you can think of it, I suppose someone has done it". How true.... So yes. I suppose that has happened. Bidding up items at auctions is nothing new. But generally it is lower cost items or by the person related to the property who owns it anyways.
Last edited by MN-Born-n-Raised; 02-14-2010 at 05:52 AM..
We'd slap your azz with a personal attack infraction...except that you are correct
I do notice that agents "filling the pipeline" (as some agents call it on this thread) are more active when the market softens up. That should make complete sense.
This post is not aimed at anyone in particular but I have noticed there is a relationship. January-February might be "pipeline" month.
I do notice that agents "filling the pipeline" (as some agents call it on this thread) are more active when the market softens up. That should make complete sense.
This post is not aimed at anyone in particular but I have noticed there is a relationship. January-February might be "pipeline" month.
Perhaps it is weather related. Much easier to sell the Arizona market to someone from out of state this time of year when its 70 and sunny. As opposed to July when its 115 degrees.
We agree. You need to get into the home or there is risk...
...So how did we get here??? I was initially stating that there are services that reduce the leg work for a guy who wants to buy a home at the auction and I was checking into it. The next thing I get is a 1600 word essay. I guess you were trying to save the world from making grave errors...
I'm glad you finally agree that one needs to get into a home to inspect it before buying, or there is substantial risk.
To answer your question, here is how we got here:
In your first post you stated that the company does a "drive-by" for you. That is not a property inspection.
You made the process sound so very easy, so I felt that everyone who would consider that method of searching for a bargain should be awere of the pitfalls.
You seemed to take issue with the fact that I was making that caveat to the readers of this thread.
That is how we got here.
And I'm not assuming anything about the wholesalers. I know many of the professional wholesalers. I've done business with some of them. I know one of them personally because he used to have his office in the Remax 2000 office that I worked out of. He actually taught me a lot about that end of the business and I considered going to work for him. I decided against it because I was headed in a different direction.
So I know how they operate. As an investor in this valley I have to know who is who and what is going on in the investor community.
So thanks for finally agreeing with me that buying a home without getting inside and doing a full physical inspection is a huge risk. You may have helped to save someone from a large loss.
I do notice that agents "filling the pipeline" (as some agents call it on this thread) are more active when the market softens up. That should make complete sense.
This post is not aimed at anyone in particular but I have noticed there is a relationship. January-February might be "pipeline" month.
Mn, it's so nice of you to keep track of when agents post on this forum.
Filling the pipeline is a marketing term that is used throughout every industry in the country. And it is a very important function.
In the case of real estate agents, most are working alone, not in a team. At times they will get swamped and will not take the time to do their marketing (whatever type marketing they do). That neglect will cause ebbs and flows in their business.
It takes an effort to set aside that time for marketing when one is working 14/7, so it's understandable.
However, realtors, and every other business person are advised by marketing educators to always set aside time for marketing in order to keep the pipeline filled so as to have a constant flow of business instead of the ebbs and flows.
Then again, some agents will read the forums but won't post unless there is something they read and feel they can offer information that may be of interest to the readers. So you shouldn't "assume" so much by what you see. (I know you like that word because you use it so much)
But thanks again for your concern with agents, and for keeping track of when they post.
I peruse C-D and other such sites for ideas and to get a feel for how things are in different regions. And to go back to the OP, I think we have at least a couple years to go before I would step back into the seriously depressed markets. Those sticking it out in real estate in places like Arizona are real troopers. It is not easy I am sure.
This thread is about a person asking how the market is because he was interested in coming back here to invest.
Unfortunately, there are a few people who are constantly looking for an opportunity to bash realtors, and one who is always looking for a place where she can bash me in particular.
So instead of discussing the issues and posting relevant information, they simply tend to muddy the water by attacking the realtor; they don't offer anything of value for the OP's; and cause threads to go off track.
Regarding your comment about it not being easy in Arizona. Yes, investing is difficult here, and one has to really know the market in order to prevent making costly mistakes. One who knows the market and has the infrastructure in place in order to rehab cost effectively, market and sell the property quickly, can do well. It takes education, study and a lot of hard work.
I did really well during the declining market because it was easier to buy houses. I could buy, rehab and sell within 3 months, knowing about what the market decline would be.
I still do the same volume but it is takes more work to find homes to buy because the inventory has declined so much. The spread is much smaller because the competition for homes in the price range where I buy is much greater; and the banks tend to keep their REO prices up higher.
Retail prices had increased since April 2009 because inventories declined and buying picked up. During the off season, prices have sort of leveled off in my market, but the competition is still there, both from other investors and first time home buyers.
Two move-up buyers I'm working with are looking for homes in the $300-400k range, and the majority of the homes that fit their criteria are already under contract. Before, we were finding that mostly in the under $200k market.
The economic signals are sort of mixed, so no one knows where the market is headed in the near future. We just have to keep watching the market daily and comparing the monthly stats to try and figure out what will happen.
I can still rehab about 12 homes a year, and more if I wanted to hire a staff, but I'm more comfortable doing it myself at my own pace. I don't do the physical work of rehabbing; I hire contractors to do the work. One of my investor friends does 30+ homes, but he has a staff of 3 working for him.
So any investor coming to Arizona to set up business will have to know what they're doing, study the market carefully, and be prepared to work hard.
Thanks for your kind reply to my landlording question. This begs another one: Why did you do it in the 70s and not now any more?
Also, we just got the RE newspaper the Russel Shaw group puts out every month. They cite the Cromford report by stating that in the sub-200k market SFH prices rose by 2% since April 2009 (which they declare as the bottom). Also when following the Case/Shiller Index you get the impression that SFH prices are on the rise again in the Phoenix area. Can you comment on the percentage?
Thanks, PL
Last edited by Potential_Landlord; 02-14-2010 at 04:46 PM..
Reason: orthografy
This thread is about a person asking how the market is because he was interested in coming back here to invest.
Unfortunately, there are a few people who are constantly looking for an opportunity to bash realtors, and one who is always looking for a place where she can bash me in particular.
Many folks blame Realtors as a villian in the the whole credit and economic collapse. Home Flippers would be another. Obviously its not that simple but anyone who profited during the boom has been a scapegoat in its aftermath.
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I guess you were trying to save the world from making grave errors. 
You don't know the specific value add that is offered. You asssume you know the company and their background. It's like me assuming your 7% sales fee is the identical service to someone elses. You are assuming that they are concerned about "getting sued". I think you assume that people using this service would want to re-hab. Most people are inept with numbers, inept in business, inept in communication skills etc etc. So there is no doubt that this undertaking can be too much for most. We suspect we agree on this last point. 
