I’ve been chasing trustee notice leads for three months solid on a part time basis and didn’t get a deal out of it. People are filing bankruptcy, listing with an agent and selling, refinancing due to such liberal lending now, or are in denial and let it go to auction. I’m an affable guy, well kept, a good communicator, honest, polite, etc. and thought this would give me an edge. What I learned is that they are so hounded with letters and people knocking on their door (some said some of the investors were terribly rude or condescending to their situation) that you get grouped in with all the rest.
Tough, tough marketing but I know people who are more seasoned and do buy this way…
I’m in North Seattle too and looking for deals so let me know if you want to partner up on anything or brainstorm some more on some marketing methods that would work. It isn’t easy finding deals in this market and I’ve been impressed that you have done a couple of Lease Options. That is a method that I’m not versed in but seems like it could be the ticket to turning a marginal buy into a profitable asset.
For fun, education, and hopefully profit, I’ve been attending the (Snohomish) trustee’s auctions for the last few weeks hoping to snag a good deal. Apparently, so are a lot of other people. Sigh. Today, I watched 15 seperate investors bid on 1 property (myself not one of them - I watched the feeding frenzy from afar.) A 3/1/1 needing cosmetics worth 210K got bid up (from 133K) to 183,100 - and this was the best “deal” I’ve seen in 3 weeks (add a bath and extras and it’s worth 240ish and almost flippable). Someone picked up a condo for a dollar over minimum. Paid 83K, worth 110K… but wait, there is a 18K special assesment on it (which she probably wasn’t aware of) so that sucks. Another condo worth 85K bid up to 70K that needs 10K of moderate repairs (and other small liens as well.) Yikes.
Good news - they’re buying at below market value in a seller’s market. Bad news - they’re paying 80-90% LTV for these properties in an area where rentals are approaching saturation. In addition, they’re paying 100% cash to do it…I hope. God help you if you are using HML 12/4pts to do this at those levels.
I’ll continue to attend, research, and hope. But it looks like I might be a year to early (or 10 to late.) Any other thoughts?
Posted by Russ Sims on April 01, 2005 at 15:18:38:
Hey northern neighbor. I’m in Pierce county. Just a couple of things; If these investors are paying 80/90% of value they won’t be using HM due to the 60/65/70% limit most of those lenders have. It seems that if they are willing to pay that much in relation to value they could just make shotgun offers on all listed homes and expect a 5% success rate at getting offers accepted the first time around. So I’m with you: why bother with the auctions at all? It seems you’d be better off finding owners of distressed homes and making offers…there won’t be nearly as much competition and you should be able to pick up better deals. But it can be a lot of work to track these owners down and then you’d better hope they’re open to selling. Still, one distressed home deal can equal 2 or 3 marginal auction deals. And try not to forget one universal constant in real estate investing. The best overall deals are made on homes that no one else knows are for sale. These homes come to you from postcards that you send out, bandidt signs (which I don’t use), ‘we buy houses’ ads, etc.
Russ
Yeah - but I figured, “Hey, I have some real cash now, why not use it to full effect?” Bah. As I still have a time consuming Job + Wife + 2 kids, I was looking for a time shortcut so I could actually see them a bit more often
Funny thing is, I’ve made more consistant money with Stock Options lately than at “work” with an RE deal a month for bonus. Just gotta build up that emegency reserve fund; walk away fund. 1 home run deal or 2 singles to go.
Whining done - now group question: Anyone have much success Trustee Notice chasing? As I’ve got the capitol to buy at the auction, I also have it to cure default under the 11 day cut-off.
