Comps, SLOs n CAs

[theaussibloke 0]

Hi; When I do a SLO I do my own comps and make the seller an offer based on my comps, so far so good. When I do a CA I get them to do their own comps to show me how much their place is worth, is that right or have I got the wrong idea completly.

 

thanks aussie

[Jonathan RexfordFL 8]

I get comps on everything that I am in. The few CA's I have done also.

[happyardy 0]

I get comps on everything that I am in. The few CA's I have done also.

 

Jonathan,

Out of curiosity, usually out of your total deals, say every 3 months, what is the % for various strategies?(SLOs, CAs, Straight Assignments, Pure Options, and numerous other strategies that you may be using).

Also, what deals(strategy) do you prefer most?

thanks

- Rahul

[Jonathan RexfordFL 8]

Options, Sub2, Cash.

 

Rarely CA's or SLO's

 

Prefer owner financing, sub2

 

It boils down to the deal. For the last 3 months I have not been buying much. I have been marketing to a segmented list of properties that may be free and clear. Hense owner finance purchases.

 

Getting a ton of leads for preforeclosure. Most of the loans are not a good canadite for sub2. Some are good canadite for short sales.

 

I have a Realtor that is working with me on my short sales. I find them. I get him to list them on behalf of the owner and he works the purchase end for me to buy.

 

He gets paid by the bank and I get a house.

[theaussibloke 0]

The reason I asked this question is because when I get my comps for a CA or a SLO for that matter, I have no way of knowing if the sellers place is a top of the range, average or a bottom of the range place. Suddenly my comps don’t seem to be of any use to me any more do they?

 

If I asked the seller to get their own comps (on the basis they know where on this scale their place is) they are either going to get some appraisals (high) from agents, be selective in the use of their comp figures or tell me they want ‘x” dollars for it.

 

Where do I go from here????

 

Come on experienced people, I’m in a bind here, help me out.

 

Thanks

 

the aussie bloke

[Doug Pretorius (ON) 9]

1. You need to know all the pertinent details about the house to see which comps are actually comparable.

2. It's very useful to have pictures of the property in question when looking at possible comps.

 

Once you've done that then let's say very similar homes have sold for between $200 and $230k. If you're doing a CA you can sign the house in the upper range or a bit more. But if you're doing a SLO then you sign at the lower range or less.

 

It doesn't matter what the seller wants because chances are they're not going to get it no matter who the buyer is. You have to focus on the numbers that work for YOU. Present those and let the chips fall where they may.

[MichaelC 160]

Pretty much what Doug said, Aussie. And don't rely on any homeowner's word for the value of their property. Do your own due diligence and stay in control of the deal.

[MichaelC 160]

. . .I have a Realtor that is working with me on my short sales. I find them. I get him to list them on behalf of the owner and he works the purchase end for me to buy.

 

He gets paid by the bank and I get a house.

Rex, the problem I'm running into is not finding properties. I have more desperate homeowners than I ever thought possible. Sure, you "get a house", as you said. The problem is once you take possession, then what? Getting a SFR to cash flow is damn near impossible with prices being what they are, and adding in taxes and, of course, the screwing over we take with property insurance.

[Jason (AL) 1]

Rex, the problem I'm running into is not finding properties. I have more desperate homeowners than I ever thought possible. Sure, you "get a house", as you said. The problem is once you take possession, then what? Getting a SFR to cash flow is damn near impossible with prices being what they are, and adding in taxes and, of course, the screwing over we take with property insurance.

 

All the more reason for doing these CA thingies, eh?

[happyardy 0]

Rex, the problem I'm running into is not finding properties. I have more desperate homeowners than I ever thought possible. Sure, you "get a house", as you said. The problem is once you take possession, then what? Getting a SFR to cash flow is damn near impossible with prices being what they are, and adding in taxes and, of course, the screwing over we take with property insurance.

 

All the more reason for doing these CA thingies, eh?

 

 

When the monthly payments(PITI etc) on the house are way more than what the rent would fetch, how do you handle it, Mike ?

Even if we decide to do a CA, the numbers still need to make some sense for a T/B to take over the house, right ? If the numbers are very high to cover the PITI, then finding a T/B for the house will become hard.

And, if we get the numbers down to match the comparable rentals, then the homeowner is not going to make enough to cover his monthly expense on the house.

Do you just let go these kind of houses or try to squeeze a deal out of them?

- Rahul

[Jason (AL) 1]

My Canadian compadre, Doug, once stated that you "...can't polish a turd..."

 

I believe this holds true if you're experiencing such "hurdles" to making

any deals.

 

However, if you're adamant about making a deal, make sure it's not

going to kill off your real estate career, nor do any damage to any

of your sellers and/or buyers.

 

Good luck!

[MichaelC 160]

When the monthly payments(PITI etc) on the house are way more than what the rent would fetch, how do you handle it, Mike ?

Even if we decide to do a CA, the numbers still need to make some sense for a T/B to take over the house, right ? If the numbers are very high to cover the PITI, then finding a T/B for the house will become hard.

And, if we get the numbers down to match the comparable rentals, then the homeowner is not going to make enough to cover his monthly expense on the house.

Do you just let go these kind of houses or try to squeeze a deal out of them?

- Rahul

Sometimes there are deals for the taking that shouldn't be taken. It isn't our goal to take on the problems of the homeowner. Sometimes you just have to pass. On the other hand, I've had homeowners willing to eat a negative cash flow each month. What makes more sense for a homeowner? Eating $300/month for 12 months, or having a vacant property costing, say, $1,200/month while waiting for a cash buyer? If the homeowner isn't stubborn you can put together a CA, get paid, and be done with the deal.

[Jonathan RexfordFL 8]

Mike,

 

I am taking sub2 properties with negative cashflow and funding it with private money. I anticipate a 36 month negative cashflow before I sell it via lease option. I also get additional option money per month to come close to there mortgage payment.

 

Now the majority of my houses these days is making offers on properties that have a lot of equity. Exit plan is owner financing. Its all in the presentation. Some are cash deals also. I am buying one this week. Near perfect condition. ARV 135K paying 65K.

[Jason (AL) 1]

Jonathan,

 

You're buying with owner financing, yes?

 

If so:

 

1. what's the benefit (to your or the sellers) of not buying sub2, instead?

 

2. are you putting anything down?

 

3. what's your selling points to get the seller to take an owner financed deal, the

bad Florida market?

 

4. are you holding these for cash flow?

 

Thanks.

[Jonathan RexfordFL 8]

Cashflow yes. If its a free and clear property or low equity I am going sub2 then owner finance. As far as downpayment I am giving down but its usually borrowed money. Private 1st or 2nd. Depending the deal.

 

Benifits?

 

If its an investment property I can save them taxes. If its an owner occupant I can close when they want too instead of a year or two.