Posted by Kylee on September 05, 2002 at 23:30:35:
Just thought I’d pipe up…had an idea.
Hey Michaela, how many marriage proposals you racked up on this board already?
K
Quick Funny Story - Posted by jim
Posted by jim on September 05, 2002 at 08:41:31:
This guy called my yesterday begging for me to buy his home. Said he owed nothing on it and would sell for $500. He claimed it was “prime property in a great location.” I knew from the address this was questionable. Anyway long story short I drove by last night and the house had boards on the windows, severe foundation problems, roof severely sagging, the front deck was barely attached to the house and I later found out that the neighbors had gone into the house and stolen the furnace. IS THIS A GOOD DEAL? Ha-ha. If anyone wants a cheap fixer upper I’ll give you a great referral in a “prime” location (for crime).
The guy was so dissappointed when I told him I couldn’t help him out. Hmmmmmmmmmmmm
where is it? - Posted by michaela-ATL
Posted by michaela-ATL on September 05, 2002 at 13:00:41:
maybe i’m interested. it might be worth a gamble of $ 500 to me.
michaela
A similar one… - Posted by Ben (NJ)
Posted by Ben (NJ) on September 05, 2002 at 08:53:09:
I’m foreclosing on a condo and the owner called and
said “you want this place, take it! I have no equity anyway and I’ve been trying to sell it for a year. I’ll give you a deed in lieu of foreclosure”. “No way”, I said, "why would I take it subject to all your debt when I can just continue the foreclosure, wipe everybody out and then own it free and clear? No thanks!
Re: Quick Funny Story - Posted by Travis (Dallas)
Posted by Travis (Dallas) on September 05, 2002 at 08:48:41:
What City? Has the City condemned the property? Taxes Current? Any hazardous materials? What are the houses like next door and across the street?
Can we find a way to laugh all the way to the bank?
Travis
Re: where is it? - Posted by jim
Posted by jim on September 05, 2002 at 13:26:35:
Kansas City. The land is valued @ approx. $1,200. Total appraised value is around $8K.
Re: A similar one… - Posted by tg
Posted by tg on September 05, 2002 at 23:49:38:
hey Ben i’m new to rei and i’m presently in memephis tn being down here has allowed me to learn about rei because there is nothing to do lol but seriously I’ve joined the local rei group and am throwing my hat into wholesaling after i get established and learn some creative financing I plan on coming home, i’m from Plainfield NJ just wondering what is the rei climate like i just know jersey is a regulated state am i wrong
thanks
Re: Quick Funny Story - Posted by jim
Posted by jim on September 05, 2002 at 08:54:06:
Travis–
In Kansas City. Back taxes are $500. House is located at a dead end street in a warzone. House is appraised @ $8K. There are vacant lots each side that appraise @ approx. $1,200 and one owner own the majority of the nighborhood. The guy wanting to sell says this owner is trashing this prop @ night (no one lives in the house) to force him to sell them the prop. I’ll give you a “great” referral. It was humorous–felt sorry for this guy.
Re: where is it? - Posted by michaela-ATL
Posted by michaela-ATL on September 05, 2002 at 14:19:04:
jim,
where are you getting your appraisal from? tax assessors? that usually doesn’t mean anything. i’ve sold lots valued at 6k for 30k. my present home is valued at 125k, the last refi appraisal was 403k.
seriously, you can’t get anything for $ 500. i bet you could get the guys in the warzone to do some work for you and get them on your side, instead of destroying the home further. or use it as a billboard “i buy houses”. or flip it to a handyman. i think $ 500, if there are no other major skeletons, could be a deal anywhere. a lot of warzones are in older neighborhoods and those homes have character pieces inside, that could be sold, trim, heart-of-pine flooring, mantles, solid wood 6 panel doors. i think it’d be worth for you to take a closer look. advertise it in the ‘hood’ as ‘handyman special’ $ 200/month as is - owner financing. you’ll find someone, that already lives in the neighborhood, that’s a little handy and would love the chance to actually own a house.
michaela
Re: Not so Quick or Funny Story (Another one) - Posted by Peter_MD
Posted by Peter_MD on September 06, 2002 at 12:28:00:
Jim:
I guess if people have been doing this for awhile “funny stories” just happen.
My first deal in July, 1995, just starting out from the gate was a flipping deal for a modest profit (after having done many for family, friends, and my business clients–some were “a little creative”, but most were the plain vanilla type…not really big deals but got them what they wanted and made them happy campers).
Having done my first deal, and making sure I didn’t get “cocky”–I consider that a real turn off…when I deal with someone who thinks that way (you know the seller that calls wanting full price, wants it now, telling you everyone is getting it…and asking you if you read the newspapers and know its a seller market, etc.), I just excuse myself (whether on the phone or driving around—mostly now just on the phone), and tell them I left something on the stove that needs my attention.
The second deal was not really a deal…more like a dump. The seller way really motivated over the phone, but when I got there they said that they wanted x amount. The house looked like something out of a horror movie…something the munsters would have enjoyed (actually it was more like the one from the movie “Pacific Heights” with Michael Keaton …missing many things and what was there looked like they didn’t work because they looked like they weren’t used much). Thought it over for about 10 seconds and told him that when he woke up from his dreaming to call me again…I then left.
Oh yes, the neighborhood was a high crime warzone. I noted not only this guy’s place but many other places had the windows boarded up and many other houses were in the same run down condition. This fact proved to be very valuable to me a few months later when I got my sea legs and really started to get deals moving.
For the benefit of the beginners, all I did was slip a photocopy under the door of a flyer from good ole Ron LeGrand’s course, as I remember, just a sheet of paper with a short message about how I buy houses and my phone number and to call me if there was any interest.
Well…would you know it. About three days later while I was away from the office looking at another possible deal, the owner called again, more desperate this time and calling me “Sir” or my answering machine. When I got time to return his call a few hours later, he told me to just get there as quickly as possible. Seems he has a small fire in the back of the house from some kids and he just wanted to be done with the property…wanted to move out of state to live closer to his family in Ohio. I told him that I would give him some money to move but I had none to give…he said just to take it…
Got some of the neighborhood kids to clean up the yard, pick up and put trash in a friend’s pick up truck headed for the dump and broom sweep the house. The first young couple that visited the house I advertised for a weekend listed as “handyman’s special”, loved the house and asked me about the neighborhood. I told them I didn’t know about the area because I was a real estate investor and never lived there, but that they should go around and visit the neighbors and introduce themselves…once we got the deal done. After talking about two hours (at a coffee shop because the house really smelled), the couple with three small children under age 6 said they really wanted the house if they could afford it, and since he (the buyer) came to this area to work for a construction company that was really big into doing home and business remodeling, this would, in their words be a “piece of cake” to fix up the house. Problem was, they had little money. Being the softie that I am, I worked out a deal…somewhat creative but heck, at that point I had zero, zilch money of my own into the place. I told them that I would work out a deal with them. I would give them all the used appliances in my residence (we bought from a builder 10 years earlier). They were the refrigerator, stove, and dishwasher if he came and hauled them away. I also gave them an electric lawnmower, freezer, washer, and dryer…and I threw in the house…all for nothing if they would do me a big favor in return.
Well, could you imagine their enthusiasm? All I wanted was for them to really fix up the place and make it look really nice… and … meet and talk to all the neighbors and report back to me on certain specific information that they came up with over time (this was the start of my Bird Dog days).
Well, the buyer’s wife went around the neighborhood with cookies, donuts, coffee cakes, and hot coffee! for weeks (while her sister came and visited and watched the kids for a few hours a day). Seems the sister’s husband was into fixing up “handyman” stuff like plumbing, electrical work, and painting, etc., and he pitched in to get the place fixed up quickly. They were a really nice couple with a small child and it was a joy to see the house get back into shape on my visits to the area to talk to other owners…how did I get the appointments you say…the lady called me and told me to be at a certain location at a certain time and already had the owner ready to talk it up (primed and pumped up).
After getting another 11 other houses (el dumpos) in the area within the next few months, the rest of the owners started to see the area improve and …no more deals were available for little or no money down. The area greatly improved and property values jumped “through the roof”.
Looking back and thinking this over (your post sparked my memory), I was inspired to write this.
BTW, my wife really liked the fact that she was able to see the benefits of me running off to the many more appointments that I had as a result of this very appreciative buyer. She got all brand new appliances that she was able to select herself.
Now here is the funny part…“the rest of the story”. The buyer still, to this day, lives in the house, the brother in law bought the house right next door…from who?..me for nothing. They both now own their own construction company that I set up for them and do their accounting and taxes…and they were the ones that did, and still do, the remodeling jobs for me at my sites. The have 5 crews and they have the very best crew devoted to my jobs…
…and both wives became my first two Bird Dogs and now do this from their homes. They send me deals to either flip to me, for me to fund, or for me to partner with them. I also do their accounting and taxes…
Live’s too short to be greedy…I don’t want it all and if I can’t make it fun, I don’t want to do it.
Lastly, I heard an advertising promotion on the radio the other day on my way to take a property (oopps, acquire a property). This advertising was in between changing the tape in the tape player while I was listening to a course. It said “Successful people are people who do what they say they will do”. Seems like it’s what I’ve always said… in this business, your word is your bond…
May success adorn each and every one on this board…
Re: where is it? - Posted by Kylee
Posted by Kylee on September 05, 2002 at 18:21:18:
Michaela–
This new board looks awesome BTW, JP!! And has been most entertaining all day, plus I’m not too busy at my J-O-B to post and read today.
Would this property be valuable PLOWED and sold/wholesaled as a lot? Just a thought, from a newbie.
Kylee
Re: where is it? - Posted by jim
Posted by jim on September 05, 2002 at 16:08:17:
michaela–
I truly appreciate your advice and I’m really not that particular but this house is in absolute shambles—I mean BAD!!! I personally can’t touch it. The neighbors supposedly broke in and stole the furnace, etc, etc, etc. Roof, foundation, front porch are in very poor shape and there is plywood over all the windows. The middle of the house sits lower than the front or back. Wish I had a digital camera so I could show the condition.
Also, I promised my referral source $500 if I bought it, then $500 to the owner and over $500 for back taxes. That’s assuming no other debts against the property.
With regard to the appraisal, I called my broker to run comps but after seeing the condition told him to stop–don’t want any part of it. The county appraisal office is where I got the $8K and they are typically about 10-15% low in this area. Again, I am really not that particular but I’ve got to pass. You do have some good ideas though on how to fishout the value. Thanks
Re: Not so Quick or Funny Story (Another one) - Posted by Corey ND
Posted by Corey ND on September 07, 2002 at 24:21:16:
Peter,
That is a great story. Good to show people the “golden rule”. AND in the long run you made money from it.
Look how you have changed the lives of those people. Instead of them living on gov’t assistance they are now running a successfull business thanks to you!
WOW!!! - Posted by jim
Posted by jim on September 06, 2002 at 12:52:49:
Peter—
What an incredible story!!! I sent it to my father who is very well established in residential investing. That was great and very inspirational. Keep up the good work!!! I am going to reconsider this house after the comps come back.
Have a great weekend! You’re the man!!!
Re: where is it? - Posted by michaela-ATL
Posted by michaela-ATL on September 05, 2002 at 19:08:32:
kyle,
i personally feel, that it would be worth a lot as a lot sometime in the future. right now noone would build in a warzone. but it still looks like something worthwhile. i do think, it would be a deal, even in shambles.
michaela
Re: where is it? - Posted by Kristy-AZ
Posted by Kristy-AZ on September 05, 2002 at 23:07:48:
As Micheala stated, you got only the value from the accessors office. you need to have your agent do the comps. They may just find that the property is worth much more. I would look very hard into this one.
We just looked at a property that was sitting on 1/4 acre in the middle of town and on a major street. (“El Dumpo area!” Anyway, after seeing the house that was supposively brought to city code 3 years ago, we determined that it really needed to come down! Unfortunitely the owners are trying to get full market value for THE HOUSE! and the property. What they want is way out of the ball park. But if they offered it to me for $500 with another $500 in back taxes, I would be jumping all over it!
Do more research before dropping this one. It could pay off.