FRUSTRATED

[bella 0]

Forgive me if I vent here for a bit. I have been looking at properties in a very quickly appreciating area about two hours from where I live for almost a year. Its a very hot "buyers" market, less properties for sale than there are buyers trying to grab them up. We finally gave up on multi-units (most don't make it to the MLS). Its this way in all of central valley, California right now (well except for those hard to find motivated sellers). So about a 1-2 hour radius all around me is like this. Meanwhile, there is one town where it still almost makes sense. House price: $150,000; going rents: $1,000. All we need to make our banker happy is a 25% cashflow above the PITI. I thought perhaps if we lease optioned the property it could work. I'm afraid to do this (okay, I'll admit it) because the property manager I have been talking to for months tells me that while housing prices are going up, rents are not significantly. If I ask for a higher rent ($1200 a month) I am going to wind up with a tennant no one else will take (credit problems, prior evictions, etc.).

 

Meanwhile, as I sit on the sidelines the prices appreciate every month, it seems. From my experience, property values never really depreciate in California, though it seems as though it will stabilize soon, perhaps when interest rates go back up.

 

Should I go for it or wait it out and just do marketing as most of you seem to be doing for the motivated, desperate sellers (actually most of those will be in areas closer to me now but where the mortgage payments could bury me if we have to just make two months worth of them).

 

I'm getting so sick of this whole thing and about ready to go get a JOB (like you, Mamasanta).

 

Thanks,

Maria

[moneynfast 0]

Bella don't quit, It takes time to build a business. I have a mentor that is trainning me now. Have I made one deal yet no. Am I having second thoughts about this business no. I know it takes time, and I will be the first to admit I have slack off alot, but I am getting ready to jump back in the drivers seat and drive on. Bella it took Thomas Edsion over 1000 tries to invent the light bulb. Did he quit no he did not. Even if he would someone else would of done it if he had gave up and quit. I believe in mamasanta she is tough, and we know she will do it, She has alot of experience than me, becasue she is actually trying to get this deal done. Even if it does not happen she will walk away with alot of experience, and she can look back on this transaction she is trying to do with this women, that is being so difficult and say I did it and I am ready for some more. She will prevail, MamaSanta you hang in there. I love reading your messages just don't let anyone change your mind. I had the same problem, When I was married my wife use to say that is a get rich quick scheme. If so then everyone would be doing it. It takes patience, and time it just don't happen over night. But when it does we wan't to be the first to here from you Mamasanta. I admire your drive that you have for this business Mamasanta.

 

MichaelR

[man 0]

bella, where in the central valley are you located? I too am in the central valley, Modesto to be exact.

[mamasanta25 0]

I believe in mamasanta she is tough

 

I admire your drive that you have for this business Mamasanta.

 

Thank you for the words of encouragement Michael R. They mean a lot to me.

[MichaelC 160]

Maria, I understand your frustrations. When I got into this business I faced a similar situation. I was living in Albuquerque, NM, and it was in the midst of an economic boom due to a very rosy employment picture, thanks to Intel setting up shop there. A homeowner could put a FSBO sign on their lawn on Monday, and have multiple offers starting at 5% above asking price on Tuesday. So, you can imagine the difficulty I was having locating motivated sellers and putting together any kind of deal.

You've heard the expression "necessity is the mother of invention". That's the situation I was facing and the reality was I needed to make this real estate thing work somehow, someway. Turns out that way was to stop being adversarial and trying to get homeowners to discount their asking price when they didn't need to. In other words, give 'em what they want! A light bulb went off. Out of this came other techniques within the realm of lease purchasing that allowed me to give homeowners what they needed to be happy and which still allowed me the opportunity to make a profit. By the way, the Albuquerque market soon tanked, and I was sitting in a very commanding position. All markets tank, including the one you find yourself in now, Maria. I don't know when, but I do know it will. CA has had a number of spectacular real estate booms and an equal number of fantastic real estate crashes. Be patient. In the meantime, stop fighting the tide and take a different approach.

For example, any regular on this board will tell you I sing the praises of Cooperative Assignments frequently. This technique allows you to be paid, and paid well, for sharing your specialized knowledge with the homeowner and putting together a lease purchase deal with the terms they need to be happy: top of the market rent and purchase price, no Realtor's commissions, no closing costs, no maintenance and repair responsibilities. That's a tough deal to beat for any homeowner who is not in need of cash today.

You can also earn substantial cash by Consulting with homeowners about lease purchase deals, and by using Pure Options as a technique to give the homeowner his asking price and still be able to quickly assign that Pure Option for a fee.

[NickC 0]

Couple thoughts,

 

Its a very hot "buyers" market, less properties for sale than there are buyers trying to grab them up.

 

Obviously, this can is a big advantage when selling your properties on l/o. Emotions are involved, and bigger profits could be made.

 

Of course, it will be more difficult to locate motivated sellers. This is why I believe marketing to sellers is key. You may get calls from unlisted properties that need to sell today. Exclusive to you.

 

If I ask for a higher rent ($1200 a month) I am going to wind up with a tennant no one else will take (credit problems, prior evictions, etc.).

 

If you sell on a l/o, after your extensive screening you should wind up with a t/b who is in the house with a mindset of a home owner. Not a renter.

 

The reason they are coming to you is because they cannot get qualified for a conventional mortgage and you can sell on great terms. They should already have some money for an earnest payment (3%-5%), and just a glitch in their credit that can be improved in 6-18 months, ideally.

 

They want to buy their own house now, and you can provide this to them. In return, they should agree to pay slightly over market rent, along with covering maintenance and repairs, like a homeowner would.

 

 

mortgage payments could bury me if we have to just make two months worth of them

 

Considering you should be collecting 3%-5% as a non-refundable option consideration, put some of this in reserves, and dip into to cover any payments or misc expenses you may need to cover. You may even be able to collect more up-front in a hot market, with buyer's emotions kicking in.

 

Just remember the bigger the numbers, the bigger the profits.

 

I'd definitely recommend getting a good marketing plan going, and start cold calling.

 

I'm getting so sick of this whole thing and about ready to go get a JOB

 

I enjoyed reading MR's post, keep persistant. That's only way to get this business started. It's really up to you if you want to work at it. Dedication and persistance is key.

 

Just my thoughts.

 

Thanks.

Nick

[TPSG, LLC 3]

Hmmmmmmmmm,

 

This is a tough but understandable subject. Everyone here has said tons of things that make sense and are motivational, so here's my two cents.

 

The hardest part about success is that it takes work, and many of us here the glamour and fortune of people who have made it and never think about what they had to go through just to get where they are. I remember when I used to run track in high school, Nike came out with this small ad in a magazine I received every month. I was really down on myself and was tired of running and really couldn't find the motivation, then I saw this ad. All it said was this, "I wake up every morning and I realize that somewhere out there, someone is training just a little bit harder and faster to be better than me."

 

This was a great motivation for me, because by nature I like to work hard, but I'd rather work smart...but I hate sometimes sitting down to figure thigns, I just want them to happen. So the hardest thing for me to ever do is to really sit down and think. Because often I would come up with roadblocks that I hadn't seen before and then I would get discouraged. You are your own worst enemy and always will be, so it is always the people that seem to break through their devils that make it. I call it the "chasm of dreams" because before the chasm, you have your idea and tons of energy, and then you have to make a jump....a huge frickin jump across this chasm, but on the other side is success. Inside that chasm holds fear, disappointment, anger, etc and everything else that stops 99% of the people from going on.

 

I guess what I am getting at is that you should have a job, no matter what until you really get off your feet with the real estate thing. It is very easy to have a job and come home to spend an hour a night working on your plan and then spend half your weekend calling and doing deals...you just have to do it

 

Make sure you have a very simple plan of attack of what you are trying to do. I did one last week and it only took like 30 mins and it showed me what I could do every night and what I could do during the weekends. That way, all I have to do is follow the plan and tweak it, if something goes wrong.

 

Things are only impossible until they're not.