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Newspaper ads?

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Michael Suess
Synergy Properties, LLC

Well Amy,

Hmm... I think the only way to figure out a good number to submit to the lenders is to figure out the following:

1. What are the COMPS for the area. (You mentioned houses prices falling.) You want to know what the average sales, and what low comps to show.

2. What is the average TOM (Time on Market) for the area.

3. What is the interest that the lender is loosing/month. Now multiply that by the number of months the lender will need to hold it (due to redemption periods, FC process, and TOM.)

4. Estimate what the lenders have to hold in reserve for the non-performing asset. Then figure what interest is lost with that amount. (multiply the same as above)

5. What repairs are needed.

6. What do you want to make on the deal, to make it worth your time. Also, what is the least amount?

Now take the average comps and subtract the rest. That will give you a number of what the lender expects. Now do the same with the low comps.

That should give you a range from what you want to make to what you need to make. Offer the figure of the LOW comps and the want to make (in step in #6.) Just remember that the number can not be higher than the average comps and the need to make (in step #6.)

Does that make sense?

Later,

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Michael Suess
Synergy Properties, LLC

So you would pay the agent for buying and for selling? Well, you are a nice guy!

What are you going to pay for it? Will the agent help you with the SS, by providing low comps, and writing your low offer?

This might work, but unless I had assurance that I would get the property, I don't work on it. What makes you think that once you did all the work, the agent wouldn't just sell it to the buyer for $195K, and then pocket the EQ that you made? (That would be shady for the agent, but not unexpected...[Call me a pessimist])

I don't know if I would attempt this, unless you had the cooperation of everyone involved with it.

Well, that is MY $0.000002 worth.

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Michael Suess
Synergy Properties, LLC

Larisa,

True, you will not be able to SS a house when it is near 50% LTV... What I would do is find out WHY they want $150K, and what is the least they would accept.

Why doesn't the homeowner try to sell/list it, if they want that much? There must be a reason... Find that out, and then use it against them. What is the TOM (Time On Market) for that area?

I don't know, I might be willing to split the profits 50-50 if the homeowner was open to it, and their was time.

Too many questions to really give you some solid advice.

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Michael Suess
Synergy Properties, LLC

Hey RichGril...

Umm, please let us know some more details... Like ARV, repairs, have you talked with the lender(s) to see what is needed to reinstate, etc.

Is $165K a good deal, or is it near FMV?

Too many unanswered Qs, to even start attempting to give answers.

Thanks!

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Michael Suess
Synergy Properties, LLC

Larisa,

I don't care what they have in arrears... It is pretty easy to figure out, once the homeowner contacts you, and they might even have the numbers from the courts (I work in WI, a mortgage state, verses a Deed in Trust state.) Anyway, asking the homeowner what their monthly payments are, add the monthly interest, late fees of 10% (I figure) of their monthly payment, and then attorney fees of $3K. That should give you a rough guess, but honestly I never do that either.

My first concern is getting the homeowner to contact me, then I will get them to sign an authorization to release, and talk with their lenders. It saves me a bunch of time doing it that way. If the homeowner does not contact me, then I didn't waste time finding what they owed... It doesn't matter then.

Later,

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Michael Suess
Synergy Properties, LLC
Edited by Synergy Properties on Nov 5, 2007 at 09:06 AM

Drew,

Well, it all depends on what works in the area... In marketing, what works for one area, might not in the next neighborhood, let alone another state. As for the flip... In addition, what worked last year, might not work this. The market is ALWAYS changing, and that is why you test until you find out something that works, and then you work it until you notice that your numbers are falling off... Then you start testing again, until you find the next thing that works. Yes, marketing is a fun game that we all need to play. (Well the successful ones need to play it, I should say.)

As for your question... Well... Umm, you should have been marketing it from the day you got it, all through the rehab... Sometimes an interested party will show up, and they will start saying, well I would like this, and that, like style of kitchen cabinets, they whirlpool tub, etc. You could sometimes strike a deal, where you will "custom" rehab their new home, and then they feel more a part of the house. Of course you will need to be sure that they put a significant earnest deposit down for that, if they are requesting some "out of the ordinary" rehab amenities, but that is something to work out.

Well, back to your question... What works FOR ME, is putting out a yard sign in the front, putting directionals out to all the major intersections around the house, in at least a 2 mile radius, if not larger... The more the better. Have fliers in the yard, a flier in the window (in case you run out, the home buyer can view the flier,) and put a flier in the local grocery stores.

Really, you should know the exit before entering the deal. Is there room for a RE agent's commission? Are you trying to sell or could you rent-to-own?

Well, there are some suggestions... Without really getting in deep, that is what I can offer you.

Hope that helps.

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Michael Suess
Synergy Properties, LLC

Well Larisa, that is usually the case...

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Michael Suess
Synergy Properties, LLC

Larisa,

I create my own, through trial-and-error... spent a lot of $$ testing. I finally got a mail piece that seems to get a better response rate that all the others for the past year, but of course, I being a man must fix what is not broken... I am changing the postcard once again this month, to see if it brings in more.

If it doesn't work, I can always go back to my last revision...

As for content, you need to get them to take action. And the common answer I got from people who responded to my postcard was "You really understood that this time of my life is really frustrating, and you seemed to have the answers I am looking for." So, that's what seems to work where I am at... It doesn't mean that it is a universal theme, in NY, it might be different.

Anyway, I go to http://www.usps.com and select the create postcards (or something like that) and have them printed and mailed by the same company... A Print on Demand company.

1. It saves me from storing the boxes of preprinted postcards that I used to create.

2. It puts the postage on the mail pieces, which saves me a bunch of time, (sure it is metered mail, which is considered taboo in Ron's eyes, but heck they KNOW that it is a piece of "junk mail" because it is a postcard. You are not going to fool the receiver that it is not, by putting a stamp on it.)

3. It allows me to change postcard design each mailing, so doing testing is easier and cheaper (you don't have old inventory to throw out.)

4. I just send them my list of homeowners, they do the rest...

Man, I need to get on the seminar circuit... I always give away all this wisdom and experience for free... Well, that's okay, until I do, you guys will benefit.

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Michael Suess
Synergy Properties, LLC
Edited by Synergy Properties on Oct 31, 2007 at 08:52 AM

That is always good... I love when the homeowner has the credit to refi the notes, to a lower payment, to increase MY cash flow, when I take over Subj2... I have done that three times... Made some good $$ that way.

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Michael Suess
Synergy Properties, LLC

Tom...

Umm, unless you are an RE agent, or otherwise a licensed professional, that as a part of your licensing, the statues or licensing agreement strictly states that you can not practice law without a license, umm... you can. Even if you have a license that prevents you from practicing law, if you disclose that you are a RE agent, and state that you are representing yourself as an individual (and not a RE agent) with this transaction, I believe that you are fine.

How many business contracts are made daily, by non-attorneys? You know that those are legal documents? Write someone an I.O.U. that is a legal document... Rent a house, using a lease agreement or Sell your car, and give a bill of sale, again... tsk, tsk, tsk, you wrote a legal document.

Practicing Law without a license is common place, in fact the legal term is pro se... It is not illegal, and all parties has the right to have all legal documents reviewed by an attorney, before they sign.

So I would not worry about that in the slightest... But I am NOT an attorney, and you should be asking an attorney about this issue, if you have legal questions... The above opinion is mine, and never had any issues with my legal practices.

Hope that sheds some light.

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Michael Suess
Synergy Properties, LLC

Well, there are some "gurus" that solely market to BK homeowners... Mark Klee and Caryn McKinney... Visit their website at: http://www.PostBankruptcyReport.com. They offer a service, seminar and materials for this type of business.

Hope that helps.

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Michael Suess
Synergy Properties, LLC

Well, so you have an unwilling agent... Okay, the way I see it you have two options.

1. Wait until the listing expires and then record the paperwork... You can have it signed, but you can not file it, unless you want the agent to sue for their commission. In fact, you might get sued anyway, if you wait, if the agent knows about you. The best way to protect yourself is to have the documents signed after the listing expires, but then again, you will get sued, because the agent will say that they brought you the deal. (Unless you have some proof that they didn't... And the courts today are very agent friendly... for some reason.)

2. Persuade the agent to release the contract... They have a buyer that is willing to pay $10K below what is owed... How nice... The homeowner needs to come to the table with $10K + closing costs + RE Agent commissions... Nice. I would tell the homeowner to fight for the release. Talk with the agent's broker. Get the local media involved, so that others will not get trapped into the situation that the homeowner is in.

Well, hope you can figure something out.

Later.

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Michael Suess
Synergy Properties, LLC

Well Larisa, WELCOME to the real estate business... And you are not doing ANYTHING wrong... Well, except maybe thinking that you are doing something wrong...

I mail out about 1,000+ postcards a month... And I probably get 2 - 5 leads every 2,000 - 3,000 postcards. It is truly a numbers game, and the numbers are not small (except for the response rates. )

Here is a marketing trick, that will increase your response rates, and I fell victim to it recently myself. BUG THE CRAP out of your contacts... Send them a direct mail piece once a week, or even twice a week. The more times they see your mailings, the more likely that you will get a lead. 'Tis true... Though this technique requires you to spend a few more bucks, than the once a month, or whatever frequency you choose, but doing a deal, and creating $5K, $10K, $30K in profit pretty much pays for the mailings for the year.

Another thing I strongly suggest, as this increased my lead conversion rate exponentially is to door knock. Now you indicated that you don't have a mode of transportation, so maybe you hire some people that do. Pay them on commission for every deal that you complete. Yeah, door knocking, when properly done yields tremendous results for me.

So, just to let you know, people don't easily give their houses away, you need to fight for them... Sending a single mail piece just isn't going to cut it.

Hope that helps.

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Michael Suess
Synergy Properties, LLC
Edited by Synergy Properties on Oct 30, 2007 at 04:54 AM

Hmm, how to answer this...

Well, first off... I have never ran across a homeowner that had a HELOC, but as you learned from Ron's course, you don't want to keep it active UNLESS it is maxed out, and there is no way that the homeowner that you are getting this house from has any access to extra funds. That can make a good deal really bad.

As far as the 2nd calling the note due and payable, I am pretty confident that as long as you continue paying the monthly payment, you should never have an issue... They want the $$, and as long as you don't give them a reason to check title, there is no problems... Besides, if you title it right, by putting it into a TRUST, that has the homeowner's name in it, it will appear to the lenders as just a ESTATE PLANNING tool, and that the property appears to still be owned by the homeowner.

Anyway, the only concern that you have is that the homeowner having access to free $$, through the HELOC. What I would do is talk with the 2nd, to see if there is a way to cap the HELOC at the current value, where there is no way to get any more $$ from them. Otherwise, you might need to refinance the 2nd out, and make it a standard mortgage, and not a HELOC.

You could buy it using a LC, but that is CRAZY! (My opinion.) You don;t have control of the house... I always take control of title when I work the deals. If the homeowner is willing to sign everything over, do it now. I would ONLY use a LC if the homeowner wouldn't give me title, and the deal was really good, for me to be interested in it. I guess it is really your decision on that point... Call me a control freak.

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Michael Suess
Synergy Properties, LLC
Edited by Synergy Properties on Oct 30, 2007 at 04:40 AM

Elson,

My advice... Find a couple mom-n-pop run motels, and take the owners to lunch for a brain-drain... You might need to do this several times, but becoming friends with people that have already walked down that road expedites your learning curve. And when you are ready for the BIG hotels and motels you do the same with the owners/management of the big ones.

Hope that helps.

Later,

Michael.

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Michael Suess
Synergy Properties, LLC

Yeah Sky,

Many-o-people have left, as you noted... I guess off to better pastures I suppose... I notice that a forum gets red hot with activity for a few months, and then dies. Well I have seen that with the RE gurus sites. Some sights the www.magicbullets.com seem to keep the activity hot for years now.

I just jumped on, since someone read one of my posts here and called a few days ago, otherwise I have long forgotten about this site.

As far as you answer, bborn is right... You need to see if the county records are on-line. It makes is EXTREMELY easy to extract records when they are, and if they are not... where do you live? (Just kidding, I'd feel sorry for ya, if they were not...The county gov't needs to spend their taxpayers money, and this is usually one place they do.) If you need to go to the clerk of courts, I am SURE that they have a index of all the court cases (I am ASSUMING you are talking about a JUDICIAL state, since you mention LIS PENDENS) and then you find out the case #s that interest you, and then you need to pull those files to get the name/address of the defendants.

Well, good to see some activity again from this site.

Later,

Michael.

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Michael Suess
Synergy Properties, LLC

Billy,

I use Louis Brown's P&SA, not that it is better in content, it just is better formatted. There is really nothing wrong with Ron's form, but if you are concerned, I am sure that you can get a copy of the state approved P&SA form that Realtors use, but I would read through it intensely to ensure that you are not making the form "seller friendly" when you are buying.

Later,

Michael.

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Michael Suess
Synergy Properties, LLC

Awww Bob, you bubble-burster you...

I found a great way to get MY FC leads... It only cost me $250.00 for someone to write me a quick utility, and now I can pull hundreds of records into my DB, in a matter of minutes, and I can do something else, while my list is being created... BY FAR the best money I ever spent.

But true, it deals with connecting to the Circuit Court System via the web... So if your municipality has on-line access to the court filings, that is the best way, the lists by like realitytrac.com are WAY too old; what do you expect they are trying to cover the whole country, and they WANT to have A LOT of records for their subscribers to look at; sort of like the credit bureaus, the more derogatory marks that is on a credit report, the more money these bureaus make, so to get errors off your credit reports is like trying to order a hit, and never get caught.

Did I go off in tangents again... Oh well...

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Michael Suess
Synergy Properties, LLC

The short answer... LOSE MONEY...

The more expanded answer... You should have known that the taxes and insurance were escrowed when you took over the loan. Then when you did the LC, you should have raised the rents, and told the home buyers that as an convenience and their for their best interest, the taxes and insurance are escrowed in the home buyer's monthly payments, and you will be paying them for the home buyer.

Now you just gave them free tax and insurance "credits," as the home buyer doesn't need to pay them out of their pocket.

Now the only thing I can see is you do refi, and make sure that these are not escrowed, if you want to take this "gift" away from the home buyer... Otherwise you are just going to be a "nice guy" and lose $$$ that you could have gained... (Is it really losing $$, even if you don't come out of pocket? H**L YES!)

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Michael Suess
Synergy Properties, LLC