This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..
Monday, February 27, 2006
Offer #3 Finally working a deal!
Ok, so my dry spell is finally over!
Last weekend, I got a call from a seller in foreclosure. The house is in Vail which is on the outskirts of Tucson. This is a up and coming area.
Basically, I'm under contract right now. The plan is to purchase subto and flip it using the MLS. Not a common strategy , but if you get in low enough, you can make your profit and not work hard!
The purchase price is around a whopping $370,000 dollars! This deal already has plenty of twists and turns... I promise to post all the steamy details after the deal is handled....
Bginvestor, 7:25 PM
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Thursday, February 23, 2006
Book review of "52 houses in 52 weeks" by Dolf
Dolf gave out his latest book during the expo last weekend. The book basically tells the story of how this investor (Gene Burns) pulled off purchasing 52 houses in actually 8 months.
Actually, this is Gene's book, its obvious that Dolf didn't do much of the work. It appeared that he talked with him alot and maybe came over to Vegas once or twice.
For those of you into "distressed" home buying, this should be an interesting book for you. The stories remind me of some of the weird situations I've been through dealing with these types of people. Although he doesn't step into all 52 purchases, he goes through many. He discloses what he did to get the property, how he did it, and what he did with it.
The "gold nuggets" from this book how he changed his business to meet his goals. He started with distressed only, by the time he was done , he was buying new construction and tax liens.
The book tries to insert wisdoms when ever it can , but is not a detailed book. Its more of a story than a course, which is just fine by me. I've read enough of those.
You should know the basics before reading this book, and that includes understanding subtos, and seller carry backs.
I recommend it because it reminds you that real estate investing is hard work, ever changing, and you constantly need to think. What works now, does not have to work today.
Bginvestor, 10:42 AM
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Sunday, February 19, 2006
Dolf de Roos is awesome!!
I saw Dolf De Roos last night at the AZREIA expo in Phoenix. He's considered a world known investor and does deals in many countries. What blew my mind is how he was structuring the deals. He looks for a twist , an opportunity that others don't see. He's a very creative guy, and make serious money.
I was blown away with his current deals in Phoenix! He is is truly inspiring. He gave us one of his books, "52 homes in 52 weeks" basically he was doing the subto techniques when the Vegas market was heating up...
Thats what I needed right now, some encouragement to move forward!
Bginvestor, 6:47 PM
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Sunday, February 12, 2006
Marketing to Arizona Foreclosures Challenging..
If you read my blog frequently, I've shown my disappointment in not getting a single call from my foreclosure marketing this year. I'm was getting to the point of wondering if there are any distressed sellers out there! Of course there is , however, are there fewer than years past? The foreclosure numbers are increasing, that means that there should be more distressed sellers, right? Actually, the answer is yes and no.
Last week I've been questioning the approach on my marketing plan. Two years ago, I was getting reliable responses. So what's going on right now? I initiated some research and this is what I'm finding out.
My marketing is based on established successes from previous investors. My letters should be fine, the sellers are reading them , but they are not calling. This is the reason why. In 2005 , Tucson's real estate market has appreciated a solid 32%. This is huge. For a seller that has bought two or even one year ago, there is instant equity in these properties.
In an article from the Arizona Republic, the attorney general states that " Right now, there are bad loans out there, which have not gone to foreclosure because the value of the underlying property has gone up so when people have gotten in trouble they could sell it and pay off their loan. When this problem is going to become most acute is if our market levels out or dips. . ."
The perfect example of the this is the house I currently have a bid on. It was bought several years ago for the low 200's. Now they have it listed for 300k! I have found others as well. Last year, I had several sellers contact me to explore their options. They ended up listing the property or selling as FSBO. It seems that sellers don't even feel the urge to contact a investor right now.
Its still too early to drop the marketing strategy. But I am smart enough to know that if this is my only marketing, I am going to starve. There needs to be other motivation.. Out of state buyers, divorces, probate, evictions, undesirable loans, etc..
Competition is higher as well, I know of a big real estate agent that is going to start marketing to foreclosures because of the estimated higher foreclosure rate. They actually give these lists out to investors as a benefit to work w/ them. I know several mortgage companies that are doing this. So competition is factor. I wouldn't be surprised to have owners receive over 10 letters from investors. This actually may be a small number.
In times like this, door knocking looks more attractive. If I'm still looking for houses, I will probably cherry pick properties to knock on some doors.
Bginvestor, 1:52 PM
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Offer #3 - Another house in my neighborhood..
Well, I placed an offer on a foreclosure in my neighborhood! I am working through an agent since its on the MLS. We did not tell the listing agent about the forelcosure, but hopefully, the seller is as motivated as I hope.
Actually , its not in good condition. The listing shows it as minor TLC, but it needs at least 15k worth of fixing! We don't think this one is going to sell quickly based on the listing agent's experience. She doesn't know anything about the property!
I asked my wife if she would be interested in moving into it, and she said that she wouldn't because of the way the staircase is built! Women!
Anyway, we should get a response in about a day or so..
Bginvestor, 11:17 AM
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Thursday, February 09, 2006
Ok, so Shaun http://shaunsre.blogspot.com/
was talking about Zillow http://www.zillow.com/
and actually, its a neat site where you can get comps.
However, the comps on the properties I checked are completely off. The site told me that comps on one of my properties should be 360k which is an average of their estimated range. I know that I would not be able to sell it for more than 280k! Its way off..
They extrapolate older comps to get to today's values. The comps were ok, but the problem may be the appreciation factor.
Anyway, I wouldn't trust it for a second...
Bginvestor, 11:51 AM
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Tuesday, February 07, 2006
Its been a slow REI week...
The new job is taking its toll on me.. I've been working longer hours and my brain is fried by the time I get home. I love engineering, but its been tougher to find time for REI.
This is the time when its easy to let the workouts cease, the letters from going in the mail, and the motivation to lessen.
However, I just got done reading some of my favorite blogs and it reminded me to keep going!!
I did meet a broker yesterday that is an expert in new construction. There's too much money being created in this type of investing to ignore. The conversation was interesting, but I need to be careful. If I could get in low and in a beginning phase of a project, I would consider. I am trying to find investment techniques to maximize my time, and this is one of them.
I'm looking forward to going to the REI seminar in the next couple of weeks.
Bginvestor, 7:16 PM
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