There is an area about an hour south of me that has houses for sale at an unbelievable price compared to where they were a couple years ago.

http://www.realtor.com/realestateand...3993_111115974

http://www.zillow.com/homes/map/1014...,-FL-33993_rb/

Another one:

http://www.zillow.com/homedetails/35...81883047_zpid/

The second one is a short sale with a list price of 57k or around that.

These aren't necessarly the houses I am interested in but there are many many houses for sale in this price range.

My plan is to go in with cash offer, prob even offer full price and rent the houses out and wait for them to appreciate. The second one sold for 250k in 2006. I don't expect it to be back at 250 but I wouldnt be surprised if it goes to 150+ in 5 yrs. I figure I can get min 800/month rent. I won't have a mortgage so I am pretty much assured positive cash flow.

My question's are these:

Since most of these are short sales, what are the chances of the bank accepting my full price cash offer and how long before they accept? I know banks are swamped these days.

If houses are selling this low, then why are people renting instead of buying? I know credit is bad but with a 12k down payment the mortgage is like $250 /month.

I'm only starting to do research in this area but I would appreciate some feedback from posters here. I'm still a couple of months from seriously making an offer.

I do know that houses really are selling this low down here.

Thanks

yeah i read the first 20 ish pages and then it began to circle

I think that what Wyman was getting at is that in, I believe, the very FIRST post of this thread I specifically stated that I'm NOT a flipper. Second, I've pointed out repeatedly that my area of expertise if in RENTING. Third, I've said repeatedly that I deal mostly with commercial property, specifically apartments and mobile home parks.

I don't find it amusing when misguided people lose money chasing a dream. The unfortunate reality is that the REI advice industry is SATURATED with con-men "gurus" that prey on people's dreams. Many people were sold a bill of goods and suffered for it. Many others got rich on luck then gambled everything on the next deal only to lose it. But no, I don't find other people's financial difficulties amusing, and they don't make me feel smug. I'm not trying to be a big shot. I'm trying to help people get to where I am. I would think that after all the time that I've put into this thread that would be pretty clear.

For the record, I'm not too impressed by your comments. It seems to me that you asked me if I feel smug because in my spot YOU would feel smug. That makes me think you're an *******. Correct me if I'm wrong.

so?


Have you read ANY of this thread at all? I TOTALLY AND COMPLETELY disagree with this method of "investing". I've outlined me reasons for this throughout this thread.

I have no idea why someone wouldn't accept a full price offer for anything that they were trying to sell. I have no idea how long a bank would take to close a short sale deal. It probably depends mightily on the bank.

Because most people don't have $12k in cash. Sad fact. Also, many of the people that have $12k in cash want to put 10% down on a $120k house rather than 20% down on a 60k house.

Oh, and wtf difference does it really make? People rent for myriad reasons. Not the least of which is that they were recently foreclosed on.

oh oh. spex is grumpy tonight. I'll tread cautiously. (Just so you know I would have blown up a long time ago at those kind of posts)

I have concerns about exit strategies in owning a MHP. How easy would a mid sized park sell as compared to a small apartment complex?

Right now my plan is to make a larger (for me) REI in the next 18-24 months. I am getting cold feet about a MHP purchase because since following the MH community in my area, I keep seeing the same MHPs for sale with desperate sales pitches.

btw, just got a couple of new JohnTReed books in today. Going to read them now.

Spex has explained ad nauseum why this is not real estate investing and why it is speculating. If you do not buy the semantic argument he certainly made a compelling argument from a financial perspective. I would advise you to read the thread in its entirety.

I know of several examples recently where banks are listing foreclosed property preposterously low with the hope of creating a bidding war and ultimately get a higher price. Does it work....well obviously they think so, but of course they thought it was a good idea to loan with razor thin equity to undocumented incomes....in short its anyone's guess. So to answer your question, a full price cash offer does not guarantee an accepted offer, particularly with foreclosures. However, this should not matter to you in the least. You should not approach the property with the mindset of making an offer that will be accepted. You should determine the max you are willing to pay for the property and offer less. The asking price should have little bearing on your decision. If you follow the spex school, the right one imo, you will arrive at this price largely based on the cash flow you expect the property to produce. Not appreciation you hope for.

savman

Renting out houses that are $150k for $800/month is not a good deal for you. You're looking to rent those out for $2500 per month (or paying $40-$50k for the houses).

Positive cashflow is relative. If you buy them cash with no mortgage and rent them out for $100, you'll have positive cashflow but obviously that's horrible for you. Keep looking, you'll find places that will rent for 1.5-2% of the purchase price. They go fast but they are there.

I guess I'll post an example of a deal I tried to get but did not:

I'm on an email list so I get an email the instant a property is listed on MLS. I've mainly used this to find REOs, as the normal properties are generally not great deals. I got an email about a 4plex, all 2/1s, about an hour away from Austin (where I live). The asking price was $99,500. Comparable apartments in the area rent for $450/each.

I went there the next day with a contractor who could give me a detailed estimate of how much everything would cost to repair. After going through it he gave me an estimate of $6500 to make it in good condition, which I was pleasantly surprised with.

Two days later (after securing financing) I put in a bid of $82,000 for it. They had a deadline of 1 week and then submitted the offers to the bank. Someone bid higher than me so I lost out on that. A couple weeks later it popped up again, this time at $95,000, and I learned that the previous deal had fallen through. This time I bid $85,500 and lost out on it again unfortunately.

I wasn't that disappointed because it would've been relatively difficult to manage from that distance, but it was definitely a good deal for whoever got it, even at $95,000 as it would have rented for ~$1800/month.

It took under 2 weeks to find a place like that, so I'm confident there will be plenty more around. Anyways, just thought you guys might find that story interesting.

The phrases "I've done a little of everything" and 'Generally I don't flip' are why I asked. I figured that it's plausible that you got into renting after taking a hit when the bubble burst. The reason I asked if you saw it coming and found it humorous is because you may have been looking to dump your properties at the peak of the bubble. I don't know how well you follow/use macro though.

Also, why the animosity?

For the record, I don't consider myself an *******, though many others do, and most of the people who got burned refused to heed to the flashing signs.

"Have you read ANY of this thread at all? I TOTALLY AND COMPLETELY disagree with this method of "investing". I've outlined me reasons for this throughout this thread. "

seriously? you expect me to read through 1000 posts to have my question answered? besides, how am i speculating? i have the buy and hold mentality as well.

SL, you're willing to spend over $50K and willing to be responsible for everything it involves for five years yet you aren't willing to read a thread that addresses your very questions? that makes sense.

I've learned more about REI from spex thread than all of the books I've read put together. if anyone is serious about REI its worth their time to read. if you're not serious then skip it. and also saying the thread is 1000 posts is pointless. read spex's post only which only account for a small percent of the thread.

Seriously? You expect Spex to answer the same questions over and over to save you the time of reading a thread?

Read the thread. It details Spex's requirements for a deal. Obviously you'll have your own, but this should give you *his* ideas.

**** this, I hope that spex doesn't even read this post because he has done a great job for this forum and its readers. This post isn't worth this thread.

I'm with the above posters. You want to invests thousands of dollars but you don't want to take the 2 days it takes to read the entire thread? This thread probably contains the best REI information on the internet and even tops most books. If you're not willing to read this you might as well not read anything about REI.

+1

I for one hope spex continues to periodically offer his insight to us forum readers despite the best efforts of a few trolls. Thanks again spex for all of your efforts. They are appreciated.

savman

Seriously, read the ****ing thread.

Buying and holding houses is speculating in the same way that buying stocks is speculating. You don't know that you will make money, you are only hoping you will. Now, those houses may go up in value over the next 5 years or they may not.

The method spex and others have described is making money in a much more reliable fashion with cashflow from rental properties. So for example someone will have a mortgage of $400/month and rents totaling $1500/month, netting them an expected $425/month in positive cashflow after deducting for expected expenses. Obviously nothing is guaranteed to work like that, but it is a much safer investment than just buying and holding.

The example you're giving may work fine, but isn't really in line with what this thread has been detailing.

You could give a link or a page number and refrain being total dicks rather than bitching at people to read.

They may have been a tad harsh, but that's because they appreciate all the info spex has provided and they don't want people being rude to him. And yes, repeating questions that have already been answered is kinda rude.

Why can't you read the thread and find the answer yourself? I realize this thread is long (like 15 pages?), but that's a bad excuse to use for not reading it. You'll be able to find the answers to your questions PLUS tons of extra valuable info that could really help you if you're interested in real estate.

So that would mean that spex or one of the readers needs to search through this thread instead of you doing it yourself. Besides that it's just rude behavior to expect something like that it's also hurting yourself. This thread contains a lot of valuable information.

thanks. this is more in line with what i was hoping to read. the rest of you guys are jerkoffs, no offense.

so somebody has come on here in the past and asked how likely it is for a bank to accept a short sale cash offer and how long on average it will take? i never asked for a 'how to invest in real estate' or spex's real estate philosophy. i want info on this one deal.

i can appreciate his value to this forum but there really wasn't a need to attack me from any of you guys.

and somebody mentioned that i should get more than $800/ month rent for a 250k house. the house is 60k owned free and clear. i think $800 for this is acceptable.

thanks anyways guys...keep on hating.

I read the whole thread. Admittedly, I didn't take notes when I was reading, but I think I understood everything that I read. I'm just saying that randomly jumping on a person is a dick move.

Yeah that was me, I couldn't find the price anywhere in your post, and zillow mentioned $150k for the 3rd place (the link to realtor.com isn't working btw).

$800/month for a $60k is pretty good. Here is a link to an investment worksheet that I've been using for investment properties. You should be able to download it for free somewhere on that site (I have), I looked for 5-10 minutes and couldn't find it anywhere. It's called Investment Hunters Worksheet. It's the exact same thing as on that web page except offline. The cap rate seems to be off, but that is easy enough to calculate on your own.

http://www.investmenthunters.com/Tools/PropertyCalc.asp

Don't forget to estimate your expenses at 45%, then it will tell you about how much you should get from rent, equity, etc. per year.

hey thats a cool link. thanks!

Well....hard to say. the MHP market is on a 10 year cycle. Obv, we were just kinda at the peak of the cycle and now we're looking at a prolonged trough. So I'd plan to hold the park for several years.

Overall though, if the property is nice, and its financable, there is, in my experience, a market for both apartments and MHPs. There are more buyers for apartments. There are more banks for apartments. But there is more money in MHPs.

Yeah, but those might just be dog parks. Any number of the following will KILL an MHP deal deader than a doornail (and most for sale have several if not all):
price to high
vacancy too high
too many park owned homes
small lots
park-owned home rents factoring too highly in NOI

Financing is generally out of the question with any ONE of those. Sellers generally don't realize this.

I just reread a couple of his books over the summer. Based on one of his ideas I made a change to one of my properties that is netting me $850 more per month. So enjoy.

Oh, no, you're absolutely right. Its totally not enough that I've lovingly and methodically answered every single question posted ask in this thread. No, I should have to answer them all twice because you are too lazy to look through the work I've already done. I'm sure you are real busy and have a lot of other important stuff to get to in life like playing your Wii or watching the new episode of Shark Tank. Really, I don't mind answering questions hundreds of times over and over. Tell you what, I'll come over and change your diaper, the I'll do your math homework for you, and then I'll find the link to where I already answered that question you asked above.

I mean, really, YOU can't be expected to read 1,000 posts. Seriously, your time is SO much more valuable than mine.