I have set a new goal for myself. I am now making a MINIMUM of 10 offers every day. I’m offering on REO’s, Pre-Foreclosures, Fixer Uppers, Rehabs, Rentals and Plexes. The result? I’m finding deals left and right! I’ve got a couple right now that look like they’re good to go, and about 40 others I’m waiting to hear back on. Some days I’m making as many as 30 offers on deals. The properties are all over the Valley, although my focus is in the East Valley (Gilbert, Mesa, Chandler, Tempe). The strategy is to then assign the contracts to you, the investor/buyer, double close at escrow, or, keep it myself. If you’re interested in getting in on the action, please contact me and let’s get you in on these opportunities before the market tightens back up!

Here’s a nice little article from azcentral.com. It talks about the sub- $200k market being ‘hot’. There’s not many of facts to back it up, but, I have to agree with most of it. There’s a ton of deals out there right now, and the $200k market seems to be fairly hot. The reason being, in my opinion, is that is the AFFORDABLE price range for most buyers nowadays. So it appears ‘hot’ due to the activity going on there. The article also mentions how most of the buyers out there seem to be investors. Hmmm, I wonder why?

HOWEVER, where I disagree somewhat is that the $200k-$400k price range is where the KILLER deals are. The reason? Not as many people can afford that right now, and the majority of nicer, newer homes are in that price range. Bottom line: there are BETTER deals in the higher price ranges than the lower- you have less competition, and tons more equity. It’s very common to find deals with $50,000, $70,000, $100,000 or more in equity (read, BELOW VALUE).  At the end of the day, there’s PLENTY of deals out there right now- it’s insane how easy I’m finding great deals. The day is coming, however, where they will be much harder to find, and everyone will be saying ‘I wish I would have’!

MSNBC had an article a few days ago about the effect of foreclosures on housing prices. There’s not too much new information here, other than reiterating why it’s an excellent time to buy investment property. Check it if you’d like, or here’s a clip.

 

While foreclosure sales are bad news for homeowners in neighborhoods with high foreclosure rates, they are a boon for well-financed buyers looking for properties at bargain prices. And in broad terms, economists view them as part of getting back to more realistic prices after years of excess.

Alejandro Diaz-Bazan, who sells foreclosed properties in Miami, said banks seeking to unload foreclosed properties are looking for buyers that can close deals quickly, and therefore need to have a hefty down payment. This month, Diaz-Bazan said a European client bought two foreclosed condominiums as an investment.

“The bank really is out to move them, to liquidate them,” Diaz-Bazan said. Despite the downward pressure on prices, he said, “property prices in Miami have not dropped enough” for the market to rebound.

Yup- the smart ones are buying right now. I think it’s been obvious for a while, I’ve certainly been preaching it for a while. It’ll be interesting to see the mass media spreading the message now tho- and how many investors will finally dive back into the market once their news anchors start talking about it. Too bad the REALLY good deals will have been snagged up by then… or will they?

I got an email earlier this week from a guy who I’ve never met before. From what I can tell, he’s fairly new to the investor/wholesaler game judging by the emails he sends out and the questions he asks (ie- who has a hard money lender, etc). I’ve never met him before, and have no idea how much business he does. However, I do get a couple emails a week either asking questions, or, posting a possible deal he found.

This specific email says that he has an investor looking for a property on the East Valley. He wants a quiet, nicer neighborhood at about 70-75% LTV. When I replied explaining that I can find him a deal for his investor- he tells me he won’t work with a REALTOR® because he can’t tack on ‘his fee’ to then pass on to his investor. NOT TRUE.

I try to explain how assigning contracts work, and after 2 attempts of follow ups, I never hear back from him. It’s too bad, too- he could’ve just had this deal that just slipped away. So, for all the others out there- let me explain quickly how you can assign a purchase contract.

You get a home under contract, with ‘<your name> and/or assignees’ as the buyer. Most investors will do this so that they can assign the contract to a different buyer or entity before closing escrow. The way you do this is you simply ask your title agent to assign the purchase contract to whoever you want before closing. It’s that simple. The kicker is whoever is taking over the contract, must stay within the terms of the original contact as written. As long as they do, it’s smooth sailing. Many REALTORS® and banks have a problem with this, simply because they don’t understand it. They tend to cringe because most investors will use this tactic making it difficult to stay current on the paperwork. It also tips off the seller/bank that you don’t intend to close on the property yourself, which explains why most banks hate it as it as they see it on their short sales all the time (which, have a high failure rate of closing).

As an investor myself, I ALWAYS write a contract with my LLC, and/or assignees as the buyer. Even if I don’t intend on flipping the paper, you never know what will come up before closing. And yes, this is what’s deemed as ‘flipping paper’ in the seminar world.

So back to this ‘investor’- if he wanted to flip the contract to his buyer, and tack on a little fee for himself- he just charges his buyer an ‘assignment fee’. Most guys will try to snag around $5,000 for this ’service’ of finding the deal. How this is handled is entirely up to the middleman- but most will take care of that through the title company to ensure it’s done properly, and everyone’s happy. It’s perfectly legal, and done all the time with most experienced investors. I wish this guy luck, and hope he comes back after getting more educated from his ‘mentor’.