Greeting fans!
As you know, our Oak Forest deal did not go through as a short sale, but are hopeful that the property did not sell at auction, which took place this past Tuesday, so we can make an offer on it as an REO. This leads to my project of the day: how do you find out if a property sold at auction if you didn't attend the auction?
I'm learning as I go on this front, well, actually I'm learning as I go on all fronts, but I have no prior training to tackle this question;-)
I started by googling the question: it was a long shot but seemed like the path of least resistance: alas, my faithful friend failed me.
Next stop was the bank's customer service department, who was quite helpful in directing me to their Consumer REO Department which offered an automated list of contacts depending on the city/state in which the REO's are located. The Chicago numbers belonged to realty companies, one of which I called. Unfortunately the guy with whom I spoke, Mike was helpful but useless. Apparently the bank, at least Harris, directs their REO's to a realtor, but they can't get any information from the sheriff's office until they get the contract from the bank, a process that takes about 30 days. Mike suggested calling back in about a month, which is a lot longer than I was planning to wait, about 29 days longer actually.
The sheriff's office seemed like the next step and, since the foreclosure link on their website was down, I called. I was quickly, if inefficiently, directed to a woman who was unable to give me any information unless I had a sheriff's number (what the heck is that?). She suggested speaking with the bank's attorney who would be authorized to give the information.
I've left a message with the vampires, who were recalcitrant in returning my earlier calls regarding the short sale offer, so we'll see how it goes with this query.
In the meantime I hope this will short cut your research time in the future.
If you'd like to tackle questions like these on your own checkout http://www.newrichbdg.com/
Friday, July 17, 2009
Tuesday, July 14, 2009
Follow the Brick and Mortar Road or Tracking Down the Owner of a Mult-Unit
Hello fans!
Well our newest, not to mention only, short sale lead is certaintly taking her time in returning our calls. Since doing nothing while you wait isn't very profitable, and neither is brick breaker for that matter, I am forging through pre-forclosure lists in hopes of contacting other owners in need of our services.
I am finding that many properties, especially in Chicago, listed as foreclosures are actually apartment buildings. Most lists give you the address of the property but not the owner and their contact information. Resorting to reverse address search on www.whitepages.com I found a few legit phone numbers but many connected to tenants in multi-unit buildings. Obvsiously they can't be the ones in foreclosure so today I went about investigating how to find the owner.
Want to know what I found?
http://tenantsunion.org/rights/8/WhoisMyLandlord
This is my first step. Anyone know of other ways to track 'em down?
"Vitally important for a young man or woman is, first, to realize the value of education and then to cultivate earnestly, aggressively, ceaselessly, the habit of self-education." BS Forbes
I got my education here: www.newrichbdg.com
Well our newest, not to mention only, short sale lead is certaintly taking her time in returning our calls. Since doing nothing while you wait isn't very profitable, and neither is brick breaker for that matter, I am forging through pre-forclosure lists in hopes of contacting other owners in need of our services.
I am finding that many properties, especially in Chicago, listed as foreclosures are actually apartment buildings. Most lists give you the address of the property but not the owner and their contact information. Resorting to reverse address search on www.whitepages.com I found a few legit phone numbers but many connected to tenants in multi-unit buildings. Obvsiously they can't be the ones in foreclosure so today I went about investigating how to find the owner.
Want to know what I found?
http://tenantsunion.org/rights/8/WhoisMyLandlord
This is my first step. Anyone know of other ways to track 'em down?
"Vitally important for a young man or woman is, first, to realize the value of education and then to cultivate earnestly, aggressively, ceaselessly, the habit of self-education." BS Forbes
I got my education here: www.newrichbdg.com
Sunday, July 12, 2009
Food for thought since I have no story
"As long as you enjoy investing, you'll be willing to do the homework and stay in the game. That's why I try to make the show so entertaining, because if you aren't interested, you'll either miss the opportunity to make money in the market or not pay enough attention and end up losing your shirt" Jim Cramer
Do your homework: www.newrichbdg.com
Do your homework: www.newrichbdg.com
Saturday, July 11, 2009
Running the Numbers or Knowing When to Say No
After speaking to Jim at the bank, I called RS. We decided that we had perhaps underestimated the property's after-repair value. We were guessing we could sell for $150 but maybe it was higher so we went to http://www.blockshopper.com/, a great website, again recommended to us by a member of the Nouveau community, to see which real estate agents were ranked highest in sales in Oak Forest.
We called the top three agents and asked for comps on our short sale and they all said the most we would get is low $200's. This meant our original estimate had been low and we needed to hear from our contractors to see if our repair guess was accurate. All three contractors gave us bids between $70-80k. These numbers meant that if we bought the house from the bank at $110 and put $80k in we couldn't break even.
The only way we could make the deal work would be if the bank accepted a lower offer and, quite honestly, there was no motivation on their part to do so. Unfortunately that meant a big disappointment to our home owner, but at least they know they exhausted every option. On our end we were a bit disappointed that our first deal did not pan out, but we learned a lot and picked up another short sale the same day we realized our first was not going to work!
Perseverance is definitely the key to making money at this, but a good education must proceed it. To see where I got mine visit http://www.newrichbdg.com/
We called the top three agents and asked for comps on our short sale and they all said the most we would get is low $200's. This meant our original estimate had been low and we needed to hear from our contractors to see if our repair guess was accurate. All three contractors gave us bids between $70-80k. These numbers meant that if we bought the house from the bank at $110 and put $80k in we couldn't break even.
The only way we could make the deal work would be if the bank accepted a lower offer and, quite honestly, there was no motivation on their part to do so. Unfortunately that meant a big disappointment to our home owner, but at least they know they exhausted every option. On our end we were a bit disappointed that our first deal did not pan out, but we learned a lot and picked up another short sale the same day we realized our first was not going to work!
Perseverance is definitely the key to making money at this, but a good education must proceed it. To see where I got mine visit http://www.newrichbdg.com/
Thursday, July 9, 2009
Talking to the Loss Mitigator or Crap! I'm Not Ready For This!
After my partner submitted the fax I called the bank to confirm its receipt. I was told they had it and would be hearing from the loss mitigator at some point the following day. Imagine my surprise when, 15 minutes later, he called to discuss the offer! Here I admit I was a bit nervous because 1) I have never submitted an offer to the bank and had no idea what questions he might pose and 2) I have no experience negotiating with a loss mitigator and was afraid I’d say the wrong thing.
I had been hoping that the mitigator would call when MM was around and that he would field the call while I listened, then I could try it on my own next time. But my phone was ringing and the auction is Tuesday so I just had to suck it up and answer. I took comfort in knowing that I knew my numbers, I was intimately familiar with the specific issues in the house and I knew a few important questions I needed to ask, even if I might not be given the answers.
Fortunately I got a nice guy, Jim, who I had a great, honest conversation with, which is not the norm for loss mitigators from what I have heard. He said point blank our offer was too low and that he could not cancel the sale next week in order to get a BPO done. The auction date had already been postponed once and the bank had seen no evidence that the home owner was attempting to remediate the situation until now, four days before auction. I asked what the bank was asking for at auction, something he did not have to tell me, and he said just over $100k. I asked if he would consider a cash offer if I could get it to him by Monday to which he replied maybe. He said the offer would have to accompany a complete short sale packet and that he would have to know I was not "yanking his chain". Remember what I said about submitting a higher offer contingent upon inspection and then lowering our offer? That is exactly to what Jim was referring. I told Jim I would contact my partner and call on Monday.
To learn how I got to be this fabulous check out: www.newrichbdg.com
I had been hoping that the mitigator would call when MM was around and that he would field the call while I listened, then I could try it on my own next time. But my phone was ringing and the auction is Tuesday so I just had to suck it up and answer. I took comfort in knowing that I knew my numbers, I was intimately familiar with the specific issues in the house and I knew a few important questions I needed to ask, even if I might not be given the answers.
Fortunately I got a nice guy, Jim, who I had a great, honest conversation with, which is not the norm for loss mitigators from what I have heard. He said point blank our offer was too low and that he could not cancel the sale next week in order to get a BPO done. The auction date had already been postponed once and the bank had seen no evidence that the home owner was attempting to remediate the situation until now, four days before auction. I asked what the bank was asking for at auction, something he did not have to tell me, and he said just over $100k. I asked if he would consider a cash offer if I could get it to him by Monday to which he replied maybe. He said the offer would have to accompany a complete short sale packet and that he would have to know I was not "yanking his chain". Remember what I said about submitting a higher offer contingent upon inspection and then lowering our offer? That is exactly to what Jim was referring. I told Jim I would contact my partner and call on Monday.
To learn how I got to be this fabulous check out: www.newrichbdg.com
Submitting an Offer or Getting Our #$%@ Together in No Time At All!
Getting the rehab estimate was our pre req to calling the bank about a short sale offer. We had an idea of how much it would cost to rehab the place but wanted a few professional opinions to confirm. Without a high repair value, we knew the bank would be reluctant to deal with us since the auction date is only a week away. While researching some questions that had arisen, my partner contacted MM, a friend of ours in the Nouveau Riche community. MM graciously offered to call the bank for us while we listened to give us a tutorial on how to speak with them.
After hours, and I do mean HOURS, of finagling the automated system, getting connected to the wrong person and sitting on hold only to land in a voicemail box we FINALLY got through to the guy in collections just below the loss mitigator who had been assigned our property. Mr. Collections advised us to submit an offer directly to the loss mitigator; not a short sale packet, but an offer, which consisted of the MLS standard purchase contract, a disclosure form and a cover letter with a brief paragraph explaining the situation and the home condition (since there was no hardship letter, estimates, or financial docs accompanying our offer).
MM generously assisted us with filling out the purchase contract, which he provided. He also informed us of the need to send along the disclosure, which he also provided, and suggested that we briefly explain the situation on the fax cover page. Talk about a wealth of information! We put an offer together in about an hour because of MM’s assistance and were able to submit it to the bank before the close of business. Without him it would have taken us a day or two simply because it was our first time and because we had anticipated submitting a complete short sale packet, which we had been preparing, but not the purchase contract only.
The only challenging aspect of submitting the offer quickly was that each page of the contract had to be initialed by the home owners, who were all the way in Oak Forest. Fortunately my partner had nothing scheduled for the afternoon and was able to drive out to them, get the signatures and fax it to the bank from the property.
When people talk about the value found in the Nouveau Riche community THIS is what they mean! MM asked for nothing in return; we thanked him profusely and he said, “I know you would have done the same for me”, which is true. Next time we do this it will be much easier since we now know what to do, but I’ll be darned if I could have figured that out on my own! I honestly do not know how people think they can go to the library and learn how to do a short sale on their own!
A few notes on the contract. We submitted an offer MUCH higher than we were willing to pay. We knew the bank had not done an interior BPO because we asked specifically when we spoke with Mr. Collections, therefore we knew they had no idea what poor condition the home was actually in. Since we did not have written estimates back from the contractors we felt offering $30k off the bat without justification would cause the bank to reject our offer without a second glance. Instead we came in at $68k, knowing we had an escape clause in the contract that the offer was contingent on further inspection. It’s paragraph 10 of the standard MLS purchase agreement just in case you were wondering;-)
You can become a real estate investing genius too! Check out http://www.newrichbdg.com/
After hours, and I do mean HOURS, of finagling the automated system, getting connected to the wrong person and sitting on hold only to land in a voicemail box we FINALLY got through to the guy in collections just below the loss mitigator who had been assigned our property. Mr. Collections advised us to submit an offer directly to the loss mitigator; not a short sale packet, but an offer, which consisted of the MLS standard purchase contract, a disclosure form and a cover letter with a brief paragraph explaining the situation and the home condition (since there was no hardship letter, estimates, or financial docs accompanying our offer).
MM generously assisted us with filling out the purchase contract, which he provided. He also informed us of the need to send along the disclosure, which he also provided, and suggested that we briefly explain the situation on the fax cover page. Talk about a wealth of information! We put an offer together in about an hour because of MM’s assistance and were able to submit it to the bank before the close of business. Without him it would have taken us a day or two simply because it was our first time and because we had anticipated submitting a complete short sale packet, which we had been preparing, but not the purchase contract only.
The only challenging aspect of submitting the offer quickly was that each page of the contract had to be initialed by the home owners, who were all the way in Oak Forest. Fortunately my partner had nothing scheduled for the afternoon and was able to drive out to them, get the signatures and fax it to the bank from the property.
When people talk about the value found in the Nouveau Riche community THIS is what they mean! MM asked for nothing in return; we thanked him profusely and he said, “I know you would have done the same for me”, which is true. Next time we do this it will be much easier since we now know what to do, but I’ll be darned if I could have figured that out on my own! I honestly do not know how people think they can go to the library and learn how to do a short sale on their own!
A few notes on the contract. We submitted an offer MUCH higher than we were willing to pay. We knew the bank had not done an interior BPO because we asked specifically when we spoke with Mr. Collections, therefore we knew they had no idea what poor condition the home was actually in. Since we did not have written estimates back from the contractors we felt offering $30k off the bat without justification would cause the bank to reject our offer without a second glance. Instead we came in at $68k, knowing we had an escape clause in the contract that the offer was contingent on further inspection. It’s paragraph 10 of the standard MLS purchase agreement just in case you were wondering;-)
You can become a real estate investing genius too! Check out http://www.newrichbdg.com/
Wednesday, July 8, 2009
Best Way to Conduct an Estimate or Mars vs. Venus
While conducting our estimates yesterday I noticed two very different approaches taking place: mine and my partners. Perhaps this is stylistic differences or perhaps there is a wrong way and a right way to do this (or should I say one way and a better way?). Anyone who wants to weigh in on this from experience, please do!
After the first contractor I had a good idea of what should be pointed out to the next guy. My thought was to show him the work we wanted done and move on quickly. Thus the exterior of the house took me 5-10 minutes to go over with the 2nd contractor since RS was inside finishing with the 1st. I told him we wanted to repour the driveway, remove three trees, replace the vinyl siding, remove the awnings, take out the concrete stairs and replace with treated wood deck, change the doors, put a new roof on the garage and we were done.
My partner, on the other hand, caught up with us before we made it inside and re-toured the property, slowly walking the perimeter, asking for suggestions, pointing to one thing and another; asking the contractors opinion and vision casting for what we could do with different aspects of the home.
My feeling was we should know what we want, tell the contractor and be done with it; his/her only input should be if there was some glaring flaw in our plan. My partner, however, is taking the “let’s create this together” route, but that’s not really their job, or is it? Any thoughts?
After the first contractor I had a good idea of what should be pointed out to the next guy. My thought was to show him the work we wanted done and move on quickly. Thus the exterior of the house took me 5-10 minutes to go over with the 2nd contractor since RS was inside finishing with the 1st. I told him we wanted to repour the driveway, remove three trees, replace the vinyl siding, remove the awnings, take out the concrete stairs and replace with treated wood deck, change the doors, put a new roof on the garage and we were done.
My partner, on the other hand, caught up with us before we made it inside and re-toured the property, slowly walking the perimeter, asking for suggestions, pointing to one thing and another; asking the contractors opinion and vision casting for what we could do with different aspects of the home.
My feeling was we should know what we want, tell the contractor and be done with it; his/her only input should be if there was some glaring flaw in our plan. My partner, however, is taking the “let’s create this together” route, but that’s not really their job, or is it? Any thoughts?
Tuesday, July 7, 2009
Estimates or Next Time Wear Comfortable Shoes, Not Heels!
Since the owner started working with us a mere week before her auction date it was important for us to get some estimates on the repairs needed in order to make an offer to the bank, thus spent all of yesterday, Monday, scheduling 4 contractors for today. Since Oak Forest is quite a drive for me and my partner we scheduled them an hour apart, not knowing how long each would take. Our first guy cancelled a few hours prior and I unsuccessfully attempted to fill his time with another contractor. In the end this turned out to be a good thing because just three estimates took all afternoon. We had guessed an hour for each hoping it would be shorter, however the house needed so much work that each took about an hour and fifteen. RS ended up finishing with one guy while I got started with another.
Although it took a while, we learned what kinds of questions to ask and I learned not to wear high heels to tromp around a property for four hours. We also learned to see the house in a new way; we didn’t realize how much needed to be done until we started going through it meticulously. While we spent a lot of time getting bids today we may still need to get more but we recognize that we are building our team and, once we have someone who has proven himself trustworthy, we will be able to call him instead of all the “interviewing”.
Anyway, after an exhausting afternoon, we had a much more accurate picture of all the house needed and estimated our rehab costs at $70-80k. If we can negotiate the bank down to $20-$30k we’ll be in it for around $100k, sell it for $150k within a week (after the rehab that is!) and make about $30-40k profit after paying points to our financier, closing costs, title fees etc.
Keep your fingers crossed!
Curious about how I learned all this? visit www.newrichbdg.com
Thursday, July 2, 2009
The Short Sale Packet or Where the @#$^ Does One Get These Documents?
One of the biggest challenges I intially faced was getting the documents for the short sale packet. For those of you who do not know, there is wide array of standard forms needed to submit a short sale offer to a bank. The great thing about our short sale class at Nouveau Riche was that we were walked through every step of the short sale process including a line by line account of how to fill in the paperwork. What I did not realize until much later is that actually acquiring the paperwork is not as easy as googling the document name.
Lawyers want to create them for you (at their low hourly rate), companies want to sell you their software and templates to create them on your own (for special sale price), and the few “free” ones out there are crap and would need attorney review anyway, not to mention that none of the docs I found, were state specific! I felt like Harry Potter in that scene from the first movie when he's trying to get his Hogwarts letter. Envelopes are raining the kitchen from every crevice and crack; he's jumping up in the air trying to catch one, but even though he's surrounded by them he grab even one. I knew lots of people in the NR community who were doing short sales. They all seemed to have these mysterious documents, but where did they get them and, more importantly, how could I get a copy?!
And so....I asked:)
My partner, RS, texted every NR contact he had asking for assistnace in procuring documentation. Within 24 hours we had a hail storm of papers flying at us: four people generously sent their docs to us and there are still more offering to pass papers on. We have some duplicates and will figure out what works best as we go through this for the first time. Were it not for our friends in the community we could have done it on our own, but I prefer to short-cut my success.
Tony Robbins, one of my favorite gurus on personal development, suggests that doing everything youself is not the most efficient way to success, but that leveraging people who have gone before you and learning from their experience, is a a far better way. All in all the Nouveau community came through for us and I deeply appreciative to all who assisted! Thanks!
If you are interested in learning how you can connect into this incredible community of investors check out: www.newrichbdg.com
Lawyers want to create them for you (at their low hourly rate), companies want to sell you their software and templates to create them on your own (for special sale price), and the few “free” ones out there are crap and would need attorney review anyway, not to mention that none of the docs I found, were state specific! I felt like Harry Potter in that scene from the first movie when he's trying to get his Hogwarts letter. Envelopes are raining the kitchen from every crevice and crack; he's jumping up in the air trying to catch one, but even though he's surrounded by them he grab even one. I knew lots of people in the NR community who were doing short sales. They all seemed to have these mysterious documents, but where did they get them and, more importantly, how could I get a copy?!
And so....I asked:)
My partner, RS, texted every NR contact he had asking for assistnace in procuring documentation. Within 24 hours we had a hail storm of papers flying at us: four people generously sent their docs to us and there are still more offering to pass papers on. We have some duplicates and will figure out what works best as we go through this for the first time. Were it not for our friends in the community we could have done it on our own, but I prefer to short-cut my success.
Tony Robbins, one of my favorite gurus on personal development, suggests that doing everything youself is not the most efficient way to success, but that leveraging people who have gone before you and learning from their experience, is a a far better way. All in all the Nouveau community came through for us and I deeply appreciative to all who assisted! Thanks!
If you are interested in learning how you can connect into this incredible community of investors check out: www.newrichbdg.com
Wednesday, July 1, 2009
My First Short Sale or This is Really Hard Work!
After networking and researching we got our first short sale! Yay! It's in Oak Forest and an absolute dump from what I hear. The property was referred to my partner through a friend, who knew the homeowner was facing foreclosure due to the recent job market. They were behind on their mortgage payments, had already had their auction date extended once and still had not been able to come up with the fund to get current on their loan. Their second auction date was about a month away when I first contacted the owner.
The homeowner was in a state of denial and, at first, would not return my calls or e-mails since she was thinking she could avoid the short sale. I ended up writing an empathetic e-mail stating that I knew how hard her situation was and that I wanted to help in any way I could. I said I knew it was challenging to face the unknown, especially when it means something you really don’t want to happen must occur. I encouraged her to contact me so that we could get going on the short sale as a plan B, since her plan A was to earn comission through her network marketing business. She had written the bank requesting another extension on the auction date but I told her I wanted to make sure she had a safety net in case the bank would not grant the request or she could not come up with the funds in time. When she finally contacted me she said my e-mail , “hit the nail on the head”. I was able to gently speak to her fears and that motivated her to call me. Once she called we were able to get moving with the paperwork.
If it sounds like I've learned a lot, it's because I have. This is where I figured it out: www.newrichbdg.com
The homeowner was in a state of denial and, at first, would not return my calls or e-mails since she was thinking she could avoid the short sale. I ended up writing an empathetic e-mail stating that I knew how hard her situation was and that I wanted to help in any way I could. I said I knew it was challenging to face the unknown, especially when it means something you really don’t want to happen must occur. I encouraged her to contact me so that we could get going on the short sale as a plan B, since her plan A was to earn comission through her network marketing business. She had written the bank requesting another extension on the auction date but I told her I wanted to make sure she had a safety net in case the bank would not grant the request or she could not come up with the funds in time. When she finally contacted me she said my e-mail , “hit the nail on the head”. I was able to gently speak to her fears and that motivated her to call me. Once she called we were able to get moving with the paperwork.
If it sounds like I've learned a lot, it's because I have. This is where I figured it out: www.newrichbdg.com
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