<p>There was NO comments re prices paid or made. ONLY what percent of house were being bought by flippers. </p>
<p>OK, I understand. There has been a decline in properties flipped over the last year and in stable market (without so many distressed properties) the amount would be about 1-2% of homes purchased that are flipped. Makes sense.</p>
<p>Here is the thing, why would you buy a property and flip for 5% while if you can hold out for a year or two and gain 30~% providing the current trend will hold. Suitable property now a days are very difficult to find for immediate flipping, but buy and hold type are readily available.</p>
<p>I know a lot of “investors” who had flipped the property in the go go years of 2000-2007 that they hold the property for at least a year before selling to get 1. Capital Gain treatment 2. Better Appreciation. Of course, you cannot hold it for too long as the price was declining after 2007.</p>
<p>Well, hindsight is 20/20. </p>
<p>This article seems to contradict the NPR report:</p>
<p><a href=“, CONTENT Homes & Investment Properties in”>, CONTENT Homes & Investment Properties in;
<p>That is an interesting article. In my market there is a shortage of inventory and a LOT of investors clamoring over the few properties that are good candidates for flips. This drives up the purchase price and lowers the profit tremendously. Regular homes in average condition are lingering on the market right now and continue to have price drops. But anything priced well below market has a bidding war.</p>
<p>Speaking of bidding wars… I am one of the ‘finalist’ offers for the big property and I made a very very strong offer. I cannot get a gauge on the listing agent, I’m pretty sure he used my offer to tell his other clients what offer they needed to make. So, in the end I expect the winning offer to come out somewhere about $500-$1,000 above my offer. So today I have to make the agonizing decision on whether I should go out to the foreclosure auction for something I have been watching (and use up my money) or sit on my hands to wait to see if I get the one I really want. I should know by noon today.</p>
<p>I personally am not in a position to buy and hold, although I wish I could. It is the smartest thing to do right now in the appreciating market. Our area had about 10% appreciation last year but it’s stagnant right now. I expect sales to heat up in the next couple of months and probably about 7% appreciation in 2014. Buy and hold strategy is for the big hedge funds and investment funds or people who have day jobs and don’t need to make an actual regular income off the flip.</p>
<p>Here is what happened in the frenzy years 2000-2007 for some of my flipping friends and it will happen again because real estate is always on a cycle. They first buy, fix and flip when they can, then the price heated up to a point that you cannot do immediate flip any more. Then they have to buy and hold and in hope the price increase will cover the negative income when they sale. Eventually that strategy does not work either due to the 2008 downturn. Most of them took a loss on the last deal(s) and lick the wounds and go away. For those who borrowed money over their head, went bankrupt. I have one of the case on my hand and that is a true case because I went over my head to make a hard money second mortgage LOAN to an investor. Not a hell lot of money, but if I had that money now, it would be handy.</p>
<p>Long story short, in front of me is a notification from the court where the “investor” has filed chapter 13 and is paying about $1300/mo for x years to satisfy all his debt, my share of that is not going to be much. At least few dollar in the hand is better than nothing. The guy has not paid a dime since 2009 and currently is driving a taxi for a living while in 2006 when I made the loan he was a vp and a GM of an high tech company with 6 figure income…</p>
<p>I’m guessing that your 2nd Trust Deed on the property is underwater after the 1st.</p>
<p>Well, I didn’t get #12 large house that I loved. The Listing Agent had the gall to tell me that my offer was the strongest (I even put in a $1,000 offer for an old car in the garage to save the estate from having to sell it) but he advised the client to go with another investor because he had done 3 deals with him and knew that they had a reputation. Collusion in my book - I can guarantee that he had sold to that investor before he ever even listed the property. He really did not communicate with me at all. It’s not sitting well with me right now but I will move on.</p>
<p>coralbrook, is there anything you can do to him?? (Revenge is my middle name, immature though that is.)</p>
<p>Well I’m ashamed to say that my mind has been racing on things I should do about the situation. Since it is a probate sale there are 2 heirs involved and a lawyer managing the probate. I could send a letter or make a phone call to that lawyer, but who says that he is not in an established relationship with this guy. On top of everything, the listing agent is a mortgage broker also. I have searched all public records to see if the listing agent/broker also does hard money loans with the other investor, but there’s no proof of that.</p>
<p>The other investor does do more volume than I do. The listing agent actually sent me links to all of the deals the other investor has done in the last year and there were about ten transactions as compared to my three. But for the life of me I cannot find a ‘connection’ in all those transactions to this listing agent or his little mortgage company. The listing agent doesn’t seem to have any other listings in the last 18 months in the MLS. I’m obviously spending a lot of time trying to get to the bottom of this :)</p>
<p>His reason given to me is that he chose the other investor because it would be ‘easier’ to work with him. If I start writing letters that will prove his point that I would be difficult to work with. </p>
<p>My agent wants me to write a letter to the California Board of Realtors or something. I probably just need to let go, I really don’t know that the other investor’s offer didn’t blow mine out of the water. I would have to wait about 45 days to view the public records on the sale.</p>
<p>The thing that really irks me is that he barely even gave me a chance to submit ‘highest and best offer’. I had to be pro active and call him on the status. I submitted too early at 10:30am and that gave the other guys 1 1/2 hrs to beat my offer because I am sure that he was sharing it with them. Deadline was noon. So I called him at about 11:30am and tried to ask some more questions about the condition of the property, HVAC, roof, pool equipment, etc. He just couldn’t be bothered. Then I said I wanted to increase my offer and he told me not to bother because I was definitely in the ball park. Really upsetting because I was using him as my ‘buying agent’ and he should have been working hard in my best interest. He discouraged me from increasing my offer because that would have required his investor to go up higher in their offer.</p>
<p>Call the lawyer… he has a duty to get the highest price, not make it easy for the listing agent.</p>
<p>You will at least find out if the agent even presented your offer.</p>
<p>And maybe I missed something, but how difficult can it be to work with someone with a cash offer?</p>
<p>Exactly how I feel - I was all cash with absolutely no contingencies, not even a physical inspection. I offered a huge deposit, to be delivered in cashier’s check within 24 hrs, with whatever escrow closing date the estate needed. I could not have made it any easier!!!</p>
<p>Which is why his behavior is particularly smelly. </p>
<p>He knows this other guy does more volume and wants to ingratiate himself in hopes of future listings. Assuming that direct compensation wasn’t involved. I agree with notrichenough. I think you should call the lawyer and find out if your offer–and I would tell him the terms of it–was even presented, and if the fact that you were willing to go higher was conveyed.</p>
<p>I suspect a boys’ club you scratch my back/I’ll scratch yours situation, possibly including the lawyer.</p>
<p>I’m still trying to muddle around to find another property. </p>
<p>Yesterday I went to the foreclosure auction trying to get #13, #14 or #15. #13 and #15 were postponed and #14 had a teaser opening bid and everyone spent a lot of time bidding up to about $395,000 and THEN the auctioneer said the bank wanted $405,000 minimum. Everyone just stopped because it is just stupid - tell us the minimum/reserve before we waste our time. This is Auction.com again.</p>
<p>I viewed #16 and #17 today. #16 was in horrible location and #17 is overpriced. #17 is a gorgeous home, but it’s only been on the market for 2 weeks so they will probably hold out for some kind of offer higher than I can make.</p>
<p>So at the end of Week Two I am 0 for 17</p>
<p>coralbrook, hang it there. It’s early yet.</p>
<p>This week I started with trying to get aggressive with three properties going to auction on Monday. Two of them were high value so I had to run around on Saturday and borrow hard money funds and start paying interest. There just isn’t enough time to try to gather all the cashier’s checks early on the mornings of the auction because the banks don’t open until 9am or 10am and the auctions start at 10am.</p>
<p>So, I drove by, researched very carefully for #18, #19 and #20. I finally decided that #18 was not a good buy and the auction location was 45 minutes away. So, I needed to concentrate on #19 and #20. Started paying hard money interest from Saturday so I could be ready. Got myself to the bank by 9am. At 9:20am they both got postponed. Ugggh!!! What a waste of time (very normal for the auctions)</p>
<p>I thought if you buy from auction.com on foreclosure property, you need not to pay the whole thing on the spot. Are you at the court steps? I gave up court steps, those auctions require more research to find out if they are selling first or second deed of trust.</p>
<p>Can you return the Hard Money loan? With interest, of course./</p>
<p>I am not buying Auction.com online auctions. I have purchased a lot of properties on the courthouse steps. And Auction.com entered the ‘courthouse steps’ foreclosure sales about 2 years ago, but they have their foreclosure auctions in ballrooms instead of the courthouse steps. The auctions are governed by the same laws and you have to pay all cash (cashier’s checks) on the spot. </p>
<p>Yes, there is a lot of due diligence required for every single property coming up to auction. I trained with a title officer to learn how to research title very diligently. It takes about 30 minutes per property just to research the title, liens, judgments and foreclosing loans very carefully. Then I have to make sure there aren’t any bankruptcies or property tax issues. I have to drive every property and try to figure out if it is occupied and what condition (without being able to get inside). A lot of work for each property.</p>
<p>Yes, I returned the hard money loan. I only had to pay for the days that I kept the loan out. He lets me ‘borrow’ for auctions without having to pay the points unless I purchase a property.</p>