Convention speech (by Roy [AL]) May 18, 2021 8:32 AM
Convention speech (by S i d [MO]) May 18, 2021 8:42 AM
Convention speech (by Jim [OH]) May 18, 2021 8:57 AM
Convention speech (by plenty [MO]) May 18, 2021 9:12 AM
Convention speech (by Roy [AL]) May 18, 2021 9:14 AM
Convention speech (by plenty [MO]) May 18, 2021 9:17 AM
Convention speech (by Roy [AL]) May 18, 2021 9:25 AM
Convention speech (by NE [PA]) May 18, 2021 9:35 AM
Convention speech (by myob [GA]) May 18, 2021 9:45 AM
Convention speech (by RB [MI]) May 18, 2021 9:45 AM
Convention speech (by Roy [AL]) May 18, 2021 9:55 AM
Convention speech (by NE [PA]) May 18, 2021 10:00 AM
Convention speech (by 6x6 [TN]) May 18, 2021 10:06 AM
Convention speech (by Roy [AL]) May 18, 2021 10:09 AM
Convention speech (by Roy [AL]) May 18, 2021 10:24 AM
Convention speech (by Ken [NY]) May 18, 2021 10:41 AM
Convention speech (by RB [MI]) May 18, 2021 10:57 AM
Convention speech (by S i d [MO]) May 18, 2021 12:51 PM
Convention speech (by myob [GA]) May 18, 2021 1:27 PM
Convention speech (by BRAD 20,000 [IN]) May 18, 2021 1:57 PM
Convention speech (by 6x6 [TN]) May 18, 2021 2:48 PM
Convention speech (by Roy [AL]) May 18, 2021 3:01 PM
Convention speech (by Vee [OH]) May 18, 2021 3:05 PM
Convention speech (by Ken [NY]) May 18, 2021 3:41 PM
Convention speech (by Roy [AL]) May 18, 2021 5:34 PM
Convention speech (by Ken [NY]) May 18, 2021 5:40 PM
Convention speech (by Hoosier [IN]) May 18, 2021 7:23 PM
Convention speech (by Roy [AL]) May 19, 2021 9:01 AM
Convention speech (by myob [GA]) May 19, 2021 9:59 AM
Convention speech (by plenty [MO]) May 19, 2021 10:06 AM
Convention speech (by Roy [AL]) May 19, 2021 10:22 AM
Convention speech (by Ken [NY]) May 19, 2021 12:42 PM
Convention speech (by Hoosier [IN]) May 19, 2021 5:39 PM
Convention speech (by Roy [AL]) May 19, 2021 7:47 PM
Convention speech (by Ken [NY]) May 19, 2021 9:35 PM
Convention speech (by Roy [AL]) Posted on: May 18, 2021 8:32 AM Message:
After I signed up to attend the convention, Jeffrey asked me if I would get on stage and give a short 15 minute speech about how I buy houses dirt cheap or below wholesale value. Now, if any of you all are going to be in the audience and you have any specific questions for me to answer, I would like to know what your questions are now.
This week I will be jotting down notes on my legal pad for my presentation and I will try to answer questions from the audience if time permits. --68.63.xxx.xxx |
Convention speech (by S i d [MO]) Posted on: May 18, 2021 8:42 AM Message:
Congrats on being offered the opportunity to share your 'secrets!' Sorry to miss out this year, but if you don't mind maybe email me a copy of your notes? I'll bring you a case of Coors next time we meet as a Thank You! --107.216.xxx.xxx |
Convention speech (by Jim [OH]) Posted on: May 18, 2021 8:57 AM Message:
What are some of the dirt cheap properties you will not buy and why? --184.57.xxx.xx |
Convention speech (by plenty [MO]) Posted on: May 18, 2021 9:12 AM Message:
What structural issues do you avoid or how do you fix these on a budget? i.e. add-on, enclosed porches, unlevel floors, failing foundations, floor joist failing etc. --172.56.xx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 9:14 AM Message:
Sid,
The essence of my talk is understanding the mentality of a true Motivated Seller. Once you understand how desperate they are to sell their house and the fact they will not deal with a RE agent,...at this point it is a lot like fishing,...I have to 'set the hook' and then I slowly 'reel them in' at my cash price and not theirs!
Every motivated seller and each house deal is different though. I have different 'hook and reel in' strategies depending on what type of seller I am dealing with. --68.63.xxx.xxx |
Convention speech (by plenty [MO]) Posted on: May 18, 2021 9:17 AM Message:
Never mind. I reread your question ... how do you buy at these prices. I suppose with cash, a pen and a check. Maybe more of a niche in your market, how do you negotiate with the owner once you find them. Do you start with a high offer and negotiate down? Do you just stand firm in your first offer? Do you start low and up the offer to close the deal? Are you dealing with financial savvy owners or desperate and you are solving their problems? --172.56.xx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 9:25 AM Message:
Jim (OH)
I will not buy any house that has severe fire damage even at below fire sale pricing,..LOL. I will not buy any house that has foundation problems which creates wavy floors.
Plenty- again, I avoid houses with structural damage which are the houses that need to be 'jack-up' and re-leveled. I have bought one like this before and I learned an expensive lesson. --68.63.xxx.xxx |
Convention speech (by NE [PA]) Posted on: May 18, 2021 9:35 AM Message:
Pay close attention to what Roy doesn't buy also, there are fortunes to be made in what other people walk away from. --70.44.xxx.xx |
Convention speech (by myob [GA]) Posted on: May 18, 2021 9:45 AM Message:
fish in ponds no one else goes too. --99.103.xxx.xxx |
Convention speech (by RB [MI]) Posted on: May 18, 2021 9:45 AM Message:
From past posts, sounds like 95% of your work is hired
out.
Labor intensive if located in areas that require permits,
and homes needs to be code compliant.
If not, Duct tape and paint hide everything.
What restrictions / requirements are there to deal with
in Alabama or your part of the woods ?
Maybe none ? --199.192.xxx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 9:55 AM Message:
NE,
If someone is a true jack of all trades (which I am not) and can do all of the repairs themselves,...yes, those people can make a fortune in buying the houses that I avoid like the plague (now called Covid-19).
My master plumber is a good example. He bought a 2/1 dump for $2,000 and did all of the repairs himself (re-wired, re-plumbed, new roof, new flooring, new HVAC etc, etc.). The only downside was that it took him 3 YEARS to complete this rehab that I could have completed in 3 MONTHS! --68.63.xxx.xxx |
Convention speech (by NE [PA]) Posted on: May 18, 2021 10:00 AM Message:
That timeframe is the plumbers issue, not an house condition issue. Proper contractors can get it down to a 3-4 month job. --70.44.xxx.xx |
Convention speech (by 6x6 [TN]) Posted on: May 18, 2021 10:06 AM Message:
Roy, I am glad that you will be talking on this subject.
If you buy any using subject too, if time permits, I am still very foggy on this subject and it might help to hear it and maybe see a demonstration in person as I tend to be a more visual learner.
As plenty asked, how do you negotiate? Maybe an example of how a conversation might go.
Thank you for allowing us this opportunity. --73.120.xx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 10:09 AM Message:
RB,
Yes, there are codes here. We have strict plumbing codes for example and my city's plumbing inspector is an A-hole.
A permit is required here just to install an electric water heater.
Any house or apartment that is intended to be rented, has to be inspected by our city's rental house inspector. --68.63.xxx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 10:24 AM Message:
6x6,
I don't like 'subject to' deals. I only do deals where I take Title to property at closing. The very best deals are when the owner of the property finances the sale (carries the paper) for me. I have only done a few of these but they are gold mines! --68.63.xxx.xxx |
Convention speech (by Ken [NY]) Posted on: May 18, 2021 10:41 AM Message:
Roy,a subject to deal you get the deed in your name, it is subject to the existing financing --72.231.xxx.xxx |
Convention speech (by RB [MI]) Posted on: May 18, 2021 10:57 AM Message:
Right on, Roy. --199.192.xxx.xxx |
Convention speech (by S i d [MO]) Posted on: May 18, 2021 12:51 PM Message:
Hijacking the post for a minute to respond to 6 by 6 in more detail....
Ken is correct, but to flesh it out a bit with a handful of examples of how/why folks do them:
EXAMPLE 1: Homer Homeowner bought a house in 2007 and paid $400,000 for it, because he "just knew it would go up 10% every year". Then reality hit in 2009 and his house is now worth only $300,000. He still owes $405,000 because he bought it using a 100% interest only loan and wrapped the $5000 closing costs into it, which was a thing back in those crazy days! Homer gets a job transfer and needs to sell so he can move, or become a land lord by default. He doesn't want to do this, but he also can't sell the home and get clear title to transfer to a traditional Buyer. Enter the "Subject To" buyer. Middleman Mike agrees to buy the property for enough to close out Homer's loan, but that won't actually close until 2014. Mike believes that the market will recover by that time. Meanwhile, Mike is also an experienced real estate investor/land lord who will rent the home and manage it, and using the money from the rents he will continue making payments on the loan that is in Homer's name. Homer now also gets credit for the rental income (usually 75%) to put toward his debt to income ration to qualify for a new loan for a new personal residence in the town where his job transferred him. Mike not only rents the home, but also enters into a Lease-Option agreement with Buyer Bob to buy the home in 5 years for $440,000 with $20,000 cash option money. Bob is okay with this because although Bob makes good money, he has terrible credit from a divorce and foreclosure last year.
To sum up: Mike has title in his name and is collecting rent from Bob and is also making mortgage payments to Homer's bank. Homer still holds the mortgage in his name, but has effectively no more day-to-day dealing with the property or the loan and can show rent income to offset his debt on the house he can't sell for enough to clear his debt. Bob gets a place to live and an opportunity, but not the obligation, to buy a house and hopefully his credit improves and in 5 years the house is worth more than $440,000 so it will appraise out.
That's the gist. As you can see, there are plenty of opportunities for failure vs. a traditional Buy/Sell transaction. There are 3 parties, and only Mike has contact with both Homer and Bob. If Mike is a bad land lord or goes off the deep end, Homer is stuck with an unpaid mortgage and a bad tenant trashing his house, and Bob may lose his Option money if Homer's bank forecloses. But as the old saying goes, "desperate times calls for desperate measures".
The basic problem that "Subject To" solves is a Seller who, for whatever reason, can't sell his house today and a Buyer who, for whatever reason, can't buy that house today. The Middleman makes his money solving that problem, but there is nothing that says the Middleman is honest and/or capable of fulfilling his promises to both parties. It's kind of the Wild West of real estate, but the daring and bold can make good money.
--107.216.xxx.xxx |
Convention speech (by myob [GA]) Posted on: May 18, 2021 1:27 PM Message:
same situaton as Sid but in GA (each state different) let home go to foreclosure. Bank has 30 days to applty for deficience with Superior court (which has never happened).
Banks gets property back. Homer starts new job, bank gets property resells makes a killing every one happy.
DONE and DONE --99.103.xxx.xxx |
Convention speech (by BRAD 20,000 [IN]) Posted on: May 18, 2021 1:57 PM Message:
Roy,
Congrats! What an HONOR! You are a true celebrity in the world of RE investing with much to offer! A local competitor uses your handyman ad!
How about a printed handout of your ads?
Before and after pics?
Advice that was given to me years ago by a professional speaker:
-Write down exactly what you want to say, word for word to stay on track and make every moment count. Read it out loud and trim to 15 minutes. Edit ruthlessly!
-then cut it in half! 15 Minutes is like POOF!
BRAD
--73.102.xxx.xxx |
Convention speech (by 6x6 [TN]) Posted on: May 18, 2021 2:48 PM Message:
Thank you Sid, myob and Ken --73.120.xx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 3:01 PM Message:
Based on Sid's very detailed explanation of "Subject to",..that 3-way convoluted deal is way to complicated for me to deal with. I prefers deals that are nice and clean with me being the sole owner at closing and not having to deal with 2nd and 3rd parties after the closing. Plus, if the banks calls the loan, now you have a 4th party involved. Why do investors waste their time with all of these complicated real estate deals?
Brad20K - I will try to do what your professional speaker's advice was on giving 15 minutes speeches. I will probably be doing a round-table for anyone who wants more detailed information. --68.63.xxx.xxx |
Convention speech (by Vee [OH]) Posted on: May 18, 2021 3:05 PM Message:
About 7 years ago Royal spoke at a convention, pay attention to him. I will have to sit this year out, I miss seeing all the regulars at lunch and listening to those that teach us special things. --76.188.xxx.xxx |
Convention speech (by Ken [NY]) Posted on: May 18, 2021 3:41 PM Message:
Roy,subject to is a nice way to get into a house with limited amounts of money.Great for a rehab and sell,I wouldnt do one for a long term situation,then there are complications --72.231.xxx.xxx |
Convention speech (by Roy [AL]) Posted on: May 18, 2021 5:34 PM Message:
Ken,
In Sid's example, the house mortgage is upside down. Why would anyone want to assume this mortgage (subject to) and make payments on a house that would only sell at a huge loss? Am I missing something here? --68.63.xxx.xxx |
Convention speech (by Ken [NY]) Posted on: May 18, 2021 5:40 PM Message:
I wouldnt buy that deal either but under different circumstances it can work. --72.231.xxx.xxx |
Convention speech (by Hoosier [IN]) Posted on: May 18, 2021 7:23 PM Message:
myob LOL...your saying "fish in ponds no one else does" reminds me of a saying my dad taught me that has served me well.
One day I was driving my dad to WalMart, and I pulled in to the lane that runs parallel to the front of the store. I turned up one of the parking lot aisles following another car and my dad said ...."what are you doing?" He said "never follow a car down a parking lot lane because if there is a good spot, they will take it!"
Ever since then, I turn down a lane where no other car is turning, and that way if there is an open spot, I get it!
Similar to investing...look where other people are not looking! --99.92.xxx.xxx |
Convention speech (by Roy [AL]) Posted on: May 19, 2021 9:01 AM Message:
No more questions???
Plenty- I saw your question which had multiple questions inside of it.
Most sellers I deal with are unsophisticated Mom and Pop types (60 years plus) that have no idea what their house is worth. I am upfront with them and just tell them 'your house is worth what you and I can agree on',..nothing more or nothing less! If their house needs a lot of work (which is usually the case), I tell them what it will cost ME to fix it if I am the buyer. I then tell them that after all repairs are done, then this X dollar amount is what your house would sell for in THIS CLASS C (or D) neighborhood.
Example: After repair re-sale value: $35,000
Minus Repairs: 15,000
Minus Cost of my time 5,000
My highest offer: $15,000
(My first offer will be around $7.5 K) --68.63.xxx.xxx |
Convention speech (by myob [GA]) Posted on: May 19, 2021 9:59 AM Message:
Indiana Hoosier notice how our folks got so much smarter as we got older?
my sister use to say: "watch the penny's and the dollars will follow". She owned a nursing home.
When I worked for the major A/line here they were going through money like water-- just wasting wasting wasting. Every 2 years we would meet with the VP of maintenance to "discuss" issues. I submitted that penny's saying to the VP of Maintenance. He read it and said "I have no idea what this means".
Don't be that person. --99.103.xxx.xxx |
Convention speech (by plenty [MO]) Posted on: May 19, 2021 10:06 AM Message:
Roy, shuuzhhh, save the meat and potatoes for your 15 minutes of fame! --172.58.xx.xx |
Convention speech (by Roy [AL]) Posted on: May 19, 2021 10:22 AM Message:
Plenty,
My 15 minute speech will just be a teaser for the book that I have started writing. I estimate 4-6 months to get all of my thoughts on paper and Sid has agreed to be my 'proof reader' in exchange for a case of PBR. I just hope he is sober when he proof reads. I have already written the introduction and created an Outline. I now have to begin writing the 'meat and potatoes' of my book. The title of my book will be, "How to Create Perpetual Income with Small Affordable Rental Houses'. --68.63.xxx.xxx |
Convention speech (by Ken [NY]) Posted on: May 19, 2021 12:42 PM Message:
Roy,i will buy a copy of your book --72.231.xxx.xxx |
Convention speech (by Hoosier [IN]) Posted on: May 19, 2021 5:39 PM Message:
If Sid will accept PBR, he works cheap. --99.92.xxx.xxx |
Convention speech (by Roy [AL]) Posted on: May 19, 2021 7:47 PM Message:
Ken,
When are you going to attend your first Mr. LL convention? I think it is time you and I meet face to face. --68.63.xxx.xxx |
Convention speech (by Ken [NY]) Posted on: May 19, 2021 9:35 PM Message:
Roy,I dont like to travel and i am not interested in sitting in a meeting all day wearing a mask.That being said i have a young guy who is friends of my family learning the business so maybe next year i will come and bring him.I would like to meet you and several others also --72.231.xxx.xxx |
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