WOW, Calfornia buyers! - Posted by Bill Taylor

Posted by MikeW on May 22, 2005 at 15:13:31:

… On how the RE market seems just too hot right now?

WOW, Calfornia buyers! - Posted by Bill Taylor

Posted by Bill Taylor on May 20, 2005 at 19:28:07:

Went to a HUD auction today on a multi family and was I surprised. I had done due diligence and came up with a number that I could live with. I know that I may have been a bit conservative and I came up with a number for a 50 unit low income compex. The complex is currently Hud subsidized but after the sale the tenants will be issued vouchers which will allow them to move from the complex if they wish. The expenses appeared to run in the 55% area adn the complex brought in about 299,000 a year with full occupancy. My number was a little over 500000 based on the expenses that I could go to, when the bidding was done the complex sold for $1,452,000. figuring for vacancy and the units will not bring in a dime until the vouchers are issued which can take up to 32 months I wass told. You will have to continue to pay all expenses til the vouchers are issued. Just the property taxes which were verified at 33000 a year and the insurance was 36000 annually. The complex had to pay for water and sewage and some lighting which amounted to another 24,400 a year. The complex had about 100000 in maintenance which was expected prior to the tenants being issued the vouchers and the money was to start coming in. Of course these numbers do not include maintenance or management or any reserves. The complex is 22 years old with origianl furnaces and A/C. Am I missing something here or are these guys bidding more than any reasonable investor could expect to ever make money on. Is there something that I don’t know about I do want to be a competive investor in this arena. I of course am itching to buy. Your loyal investor Bill. I am going to have to hit it even harder now if I am going to try to keep up with you other folks on this board.

Re: WOW, Calfornia buyers! - Posted by Patti

Posted by Patti on May 29, 2005 at 13:05:13:

Bill,
I live in SW Michigan but do business in NW Indiana and the deals are there to be had. I can get you as many rental cash flows as you’d like at very low prices. Right now I have a duplex for 11K which needs 25K rehabbing. It will sell for 50K with a positive cash flow of 300+ per month. Or I can sell it for 39K, have my rehab crew do it. Would require $500 for overseeing the project and another $500 to sell it for you. Perfect for out-of-state investors. I also have other homes in all price ranges and a package of homes, already rehabbed - I will get tenants in place and a property management to cover. NW Indiana is the place to rehab and the rental cash flow is great! CA investors have been buying.

Re: WOW, Calfornia buyers! - Posted by Eric_SF

Posted by Eric_SF on May 20, 2005 at 19:32:11:

If you don’t mind me asking, which county was the property located in?

Re: WOW, Calfornia buyers! - Posted by LAInvestor

Posted by LAInvestor on June 14, 2005 at 18:35:14:

Hi Patti,

I would love to know more about the rental cash flow in your area. Currently, I am sitting on around $400k around my area. I was doing mainly rehabs in distressed areas around l.a. (compton, south central, etc.), but supply is running low around here for my side of the business. I have made a decent chunck of change, and now am more interested in establishing cash flow for the long term. Thanks in advance!

Re: WOW, Calfornia buyers! - Posted by Bill Taylor

Posted by Bill Taylor on May 20, 2005 at 20:55:02:

Laporte County,Indiana, if you were there maybe you can let me undestand how this deal can come out positively.

Re: WOW, Indiana buyers! - Posted by David Krulac

Posted by David Krulac on May 22, 2005 at 15:05:13:

I went to an auction last year for a 55 acre tract of land. It was an estate sale and the estate had an appraisal for $1.2million and was going to be happy with that. One local group had a bid limit of $1.8 million. Two out of stae bidders bid the property to $3.6 million and they were from Indiana. Don’t know if they’re going to make any money but they sure know how to spend it.

Last week I went to an auction and there were people there from NY, NJ, Ga and FL. Usually small auctions don’t draw the out of state bidders, but there is a lot of money chasing a few number of properties.

A week before the stock market crash in 1929, Joesph Kennedy said it was time to get out becasue shoe shine boys were giving stock tips and advice.