32 offers or more in 3 days on a single property

[surveyor]

Variables

The numbers I like to look at tend to vary because everyone has different situations, but here are the basics:

a) ROE > 20%

(some people will be happy with a 15% ROE if they want to play it safe, but I have a 30 year window so I look for more). ROE dramatically increases however the less downpayment you have…

b) Cash on cash > Interest Rate + 3%

If your downpayment is borrowed money, the biggest the cash on cash the better. However, if you are using actual cash, you do have a bit more leeway but it is recommended to at least consider this value into account (the theory being that if you deposit the downpayment into a bank and get 3% interest, your real estate investment should do better than that).

c) Cash flows or breaks even

d) Per Unit cost < $175k This rule tends to disquality most properties in California. There have been a few properties I've seen in San Diego that are close to cash flowing, but they are in historically bad areas and I've been better properties in other locations. When investing in real estate, you have to look at your personal situation and decide what your priorities are. If you have a wife or family, you need to make sure your property cash flows a sufficient amount so as not to impact the family finances. If you are a high income individual or family, your real estate investment can break even or even be negative cash flowing so that you can save on taxes.

[SD Realtor]

Thanks for a glimpse into the parameters you use Surveyor. Hope that place in Bama has closed and you are flowing over there.

jp we may be saying something similar and no you are not dense. Don’t be confused with the bank not being motivated to sell verses just having a very poor processing. It is what it is but short sales are taking from a few weeks to many months to process. A client of mine submitted a purchase offer for a short sale back in early October and we are still waiting for acceptance! Early October!!! I have a short sale listing in Lakeside and we go an offer early in the fall. It took the lender close to 12 weeks to respond and by the time they did, the buyer was long gone. Fortunately we got another offer a few weeks ago and the response has been much better from the lender.

Per some of the posts we have seen, right now we have reached a foreclosure rate that is equivalent to the PEAK RATE in the last depreciation cycle. Lenders who are already losing money hand over fist refuse to staff up to cover this tsumani of default processing. It is incredibly frustrating.

SD Realtor

[SD Realtor]

Thanks for a glimpse into the parameters you use Surveyor. Hope that place in Bama has closed and you are flowing over there.

jp we may be saying something similar and no you are not dense. Don’t be confused with the bank not being motivated to sell verses just having a very poor processing. It is what it is but short sales are taking from a few weeks to many months to process. A client of mine submitted a purchase offer for a short sale back in early October and we are still waiting for acceptance! Early October!!! I have a short sale listing in Lakeside and we go an offer early in the fall. It took the lender close to 12 weeks to respond and by the time they did, the buyer was long gone. Fortunately we got another offer a few weeks ago and the response has been much better from the lender.

Per some of the posts we have seen, right now we have reached a foreclosure rate that is equivalent to the PEAK RATE in the last depreciation cycle. Lenders who are already losing money hand over fist refuse to staff up to cover this tsumani of default processing. It is incredibly frustrating.

SD Realtor

[SD Realtor]

Thanks for a glimpse into the parameters you use Surveyor. Hope that place in Bama has closed and you are flowing over there.

jp we may be saying something similar and no you are not dense. Don’t be confused with the bank not being motivated to sell verses just having a very poor processing. It is what it is but short sales are taking from a few weeks to many months to process. A client of mine submitted a purchase offer for a short sale back in early October and we are still waiting for acceptance! Early October!!! I have a short sale listing in Lakeside and we go an offer early in the fall. It took the lender close to 12 weeks to respond and by the time they did, the buyer was long gone. Fortunately we got another offer a few weeks ago and the response has been much better from the lender.

Per some of the posts we have seen, right now we have reached a foreclosure rate that is equivalent to the PEAK RATE in the last depreciation cycle. Lenders who are already losing money hand over fist refuse to staff up to cover this tsumani of default processing. It is incredibly frustrating.

SD Realtor

[SD Realtor]

Thanks for a glimpse into the parameters you use Surveyor. Hope that place in Bama has closed and you are flowing over there.

jp we may be saying something similar and no you are not dense. Don’t be confused with the bank not being motivated to sell verses just having a very poor processing. It is what it is but short sales are taking from a few weeks to many months to process. A client of mine submitted a purchase offer for a short sale back in early October and we are still waiting for acceptance! Early October!!! I have a short sale listing in Lakeside and we go an offer early in the fall. It took the lender close to 12 weeks to respond and by the time they did, the buyer was long gone. Fortunately we got another offer a few weeks ago and the response has been much better from the lender.

Per some of the posts we have seen, right now we have reached a foreclosure rate that is equivalent to the PEAK RATE in the last depreciation cycle. Lenders who are already losing money hand over fist refuse to staff up to cover this tsumani of default processing. It is incredibly frustrating.

SD Realtor

[SD Realtor]

Thanks for a glimpse into the parameters you use Surveyor. Hope that place in Bama has closed and you are flowing over there.

jp we may be saying something similar and no you are not dense. Don’t be confused with the bank not being motivated to sell verses just having a very poor processing. It is what it is but short sales are taking from a few weeks to many months to process. A client of mine submitted a purchase offer for a short sale back in early October and we are still waiting for acceptance! Early October!!! I have a short sale listing in Lakeside and we go an offer early in the fall. It took the lender close to 12 weeks to respond and by the time they did, the buyer was long gone. Fortunately we got another offer a few weeks ago and the response has been much better from the lender.

Per some of the posts we have seen, right now we have reached a foreclosure rate that is equivalent to the PEAK RATE in the last depreciation cycle. Lenders who are already losing money hand over fist refuse to staff up to cover this tsumani of default processing. It is incredibly frustrating.

SD Realtor

[sdrealtor]

Good clarification SD R. I wasnt saying there is pent up demand everywhere for everything but rather there is pent up demand for decent entry level homes well located near employment centers with above average school systems.

LBC,
Wait away. I preach patience to most of clients and have for a few years. We are getting near occasionally. The set of criteria I look for are unique in every case. Here’s a recent one I was watching. 1500 sq ft 3Br townhome in Encinitas owned free and clear by original owner and now a probate sale. Property was listed in the mid 300’s and reduced down to about 330K before going into escrow last week. It only had 1.5 baths but I took a plumber in and figured out how we could easily add another full bath to create a real MBR suite for about 5K or less. Home needed updating but was in very very good condition. Location was among the best in Village Park and even had a nice westward view from two of the upstairs bedrooms which were relatively large. I figured that there was small window of opportunity (b4 they went down to 330K)where I had a shot at getting it between 290K and 275K.

Monthly carrying cost including PITI (30 yr fixed rate with 20% down) plus HOA would put me at 1700 to 1800 per month. It would rent easily for 1800 per month.

I had a client (young professional with about 80K cash saved in the bank, high 700 FICO’s and an 80K annual income) that was about to write an offer on it but hesitated and lost it. With a roomate it would have cost him about 1200 per month plus he’d get a real nice tax deduction.

These are the kinds of deals I look for. This isnt the first like nor will it be the last.

Would you buy something that was cash flow neutral today, would rent easily every day of the week, had potential for higher rent, provided you a nice paper loss for tax purposes and had a solid chance of delivering a 200K capital gain in 10 to 15 years?

[sdrealtor]

Good clarification SD R. I wasnt saying there is pent up demand everywhere for everything but rather there is pent up demand for decent entry level homes well located near employment centers with above average school systems.

LBC,
Wait away. I preach patience to most of clients and have for a few years. We are getting near occasionally. The set of criteria I look for are unique in every case. Here’s a recent one I was watching. 1500 sq ft 3Br townhome in Encinitas owned free and clear by original owner and now a probate sale. Property was listed in the mid 300’s and reduced down to about 330K before going into escrow last week. It only had 1.5 baths but I took a plumber in and figured out how we could easily add another full bath to create a real MBR suite for about 5K or less. Home needed updating but was in very very good condition. Location was among the best in Village Park and even had a nice westward view from two of the upstairs bedrooms which were relatively large. I figured that there was small window of opportunity (b4 they went down to 330K)where I had a shot at getting it between 290K and 275K.

Monthly carrying cost including PITI (30 yr fixed rate with 20% down) plus HOA would put me at 1700 to 1800 per month. It would rent easily for 1800 per month.

I had a client (young professional with about 80K cash saved in the bank, high 700 FICO’s and an 80K annual income) that was about to write an offer on it but hesitated and lost it. With a roomate it would have cost him about 1200 per month plus he’d get a real nice tax deduction.

These are the kinds of deals I look for. This isnt the first like nor will it be the last.

Would you buy something that was cash flow neutral today, would rent easily every day of the week, had potential for higher rent, provided you a nice paper loss for tax purposes and had a solid chance of delivering a 200K capital gain in 10 to 15 years?

[sdrealtor]

Good clarification SD R. I wasnt saying there is pent up demand everywhere for everything but rather there is pent up demand for decent entry level homes well located near employment centers with above average school systems.

LBC,
Wait away. I preach patience to most of clients and have for a few years. We are getting near occasionally. The set of criteria I look for are unique in every case. Here’s a recent one I was watching. 1500 sq ft 3Br townhome in Encinitas owned free and clear by original owner and now a probate sale. Property was listed in the mid 300’s and reduced down to about 330K before going into escrow last week. It only had 1.5 baths but I took a plumber in and figured out how we could easily add another full bath to create a real MBR suite for about 5K or less. Home needed updating but was in very very good condition. Location was among the best in Village Park and even had a nice westward view from two of the upstairs bedrooms which were relatively large. I figured that there was small window of opportunity (b4 they went down to 330K)where I had a shot at getting it between 290K and 275K.

Monthly carrying cost including PITI (30 yr fixed rate with 20% down) plus HOA would put me at 1700 to 1800 per month. It would rent easily for 1800 per month.

I had a client (young professional with about 80K cash saved in the bank, high 700 FICO’s and an 80K annual income) that was about to write an offer on it but hesitated and lost it. With a roomate it would have cost him about 1200 per month plus he’d get a real nice tax deduction.

These are the kinds of deals I look for. This isnt the first like nor will it be the last.

Would you buy something that was cash flow neutral today, would rent easily every day of the week, had potential for higher rent, provided you a nice paper loss for tax purposes and had a solid chance of delivering a 200K capital gain in 10 to 15 years?

[sdrealtor]

Good clarification SD R. I wasnt saying there is pent up demand everywhere for everything but rather there is pent up demand for decent entry level homes well located near employment centers with above average school systems.

LBC,
Wait away. I preach patience to most of clients and have for a few years. We are getting near occasionally. The set of criteria I look for are unique in every case. Here’s a recent one I was watching. 1500 sq ft 3Br townhome in Encinitas owned free and clear by original owner and now a probate sale. Property was listed in the mid 300’s and reduced down to about 330K before going into escrow last week. It only had 1.5 baths but I took a plumber in and figured out how we could easily add another full bath to create a real MBR suite for about 5K or less. Home needed updating but was in very very good condition. Location was among the best in Village Park and even had a nice westward view from two of the upstairs bedrooms which were relatively large. I figured that there was small window of opportunity (b4 they went down to 330K)where I had a shot at getting it between 290K and 275K.

Monthly carrying cost including PITI (30 yr fixed rate with 20% down) plus HOA would put me at 1700 to 1800 per month. It would rent easily for 1800 per month.

I had a client (young professional with about 80K cash saved in the bank, high 700 FICO’s and an 80K annual income) that was about to write an offer on it but hesitated and lost it. With a roomate it would have cost him about 1200 per month plus he’d get a real nice tax deduction.

These are the kinds of deals I look for. This isnt the first like nor will it be the last.

Would you buy something that was cash flow neutral today, would rent easily every day of the week, had potential for higher rent, provided you a nice paper loss for tax purposes and had a solid chance of delivering a 200K capital gain in 10 to 15 years?

[sdrealtor]

Good clarification SD R. I wasnt saying there is pent up demand everywhere for everything but rather there is pent up demand for decent entry level homes well located near employment centers with above average school systems.

LBC,
Wait away. I preach patience to most of clients and have for a few years. We are getting near occasionally. The set of criteria I look for are unique in every case. Here’s a recent one I was watching. 1500 sq ft 3Br townhome in Encinitas owned free and clear by original owner and now a probate sale. Property was listed in the mid 300’s and reduced down to about 330K before going into escrow last week. It only had 1.5 baths but I took a plumber in and figured out how we could easily add another full bath to create a real MBR suite for about 5K or less. Home needed updating but was in very very good condition. Location was among the best in Village Park and even had a nice westward view from two of the upstairs bedrooms which were relatively large. I figured that there was small window of opportunity (b4 they went down to 330K)where I had a shot at getting it between 290K and 275K.

Monthly carrying cost including PITI (30 yr fixed rate with 20% down) plus HOA would put me at 1700 to 1800 per month. It would rent easily for 1800 per month.

I had a client (young professional with about 80K cash saved in the bank, high 700 FICO’s and an 80K annual income) that was about to write an offer on it but hesitated and lost it. With a roomate it would have cost him about 1200 per month plus he’d get a real nice tax deduction.

These are the kinds of deals I look for. This isnt the first like nor will it be the last.

Would you buy something that was cash flow neutral today, would rent easily every day of the week, had potential for higher rent, provided you a nice paper loss for tax purposes and had a solid chance of delivering a 200K capital gain in 10 to 15 years?

[an]

I think there’s pent up demand for all homes in all areas IF the price is right. I’ve seen houses in Mira Mesa, which most on here think is a crappy area, getting multiple offers, when it was priced aggressively. They were small houses in the 1200-1400 sq-ft range priced in the low to mid 300k range and get snapped up pretty quickly. With 30 year fixed and 20% down, PITI would be around $1700/month. The rent on this type of place would easily fetch 1700-1900/month depending on the interior quality.

sdr, you must be one hell of a negotiator if you can get a listing priced @ 350k to take an offer @ 275-290k. Too bad your client snoozed on such a deal.

[an]

I think there’s pent up demand for all homes in all areas IF the price is right. I’ve seen houses in Mira Mesa, which most on here think is a crappy area, getting multiple offers, when it was priced aggressively. They were small houses in the 1200-1400 sq-ft range priced in the low to mid 300k range and get snapped up pretty quickly. With 30 year fixed and 20% down, PITI would be around $1700/month. The rent on this type of place would easily fetch 1700-1900/month depending on the interior quality.

sdr, you must be one hell of a negotiator if you can get a listing priced @ 350k to take an offer @ 275-290k. Too bad your client snoozed on such a deal.

[an]

I think there’s pent up demand for all homes in all areas IF the price is right. I’ve seen houses in Mira Mesa, which most on here think is a crappy area, getting multiple offers, when it was priced aggressively. They were small houses in the 1200-1400 sq-ft range priced in the low to mid 300k range and get snapped up pretty quickly. With 30 year fixed and 20% down, PITI would be around $1700/month. The rent on this type of place would easily fetch 1700-1900/month depending on the interior quality.

sdr, you must be one hell of a negotiator if you can get a listing priced @ 350k to take an offer @ 275-290k. Too bad your client snoozed on such a deal.

[an]

I think there’s pent up demand for all homes in all areas IF the price is right. I’ve seen houses in Mira Mesa, which most on here think is a crappy area, getting multiple offers, when it was priced aggressively. They were small houses in the 1200-1400 sq-ft range priced in the low to mid 300k range and get snapped up pretty quickly. With 30 year fixed and 20% down, PITI would be around $1700/month. The rent on this type of place would easily fetch 1700-1900/month depending on the interior quality.

sdr, you must be one hell of a negotiator if you can get a listing priced @ 350k to take an offer @ 275-290k. Too bad your client snoozed on such a deal.

[Author]

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