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It is Assembly Bill 284… numerically dyslexia hits us all at some point…
However apart from the dyslexia, Jay has pretty well nailed the gist of this – can't add much. In October 2011, they passed this as the response to "robo signing" and what everyone will remember was the hot topic of the day – property owners suing to get their properties back from mortgage companies that did everything wrong … legislation passed on some assumption that defaulting home owners wanted their properties back and the mortgage that went with them.
Thus the standard mechanism to go through foreclosure ground to halt as every document faced original notary tests – fascinating graphs show the effect for those interested – STILL haven't figured out how to add to thread but anyhooo.
So – without producing every last single document for every single mortgage, judicial foreclosures are all that's left – through a court system can't afford to hire people to deal with the workload…. now consider that virtually the whole of Las Vegas has managed strategic default by now (well I sure as heck wouldn't have continued to pay on my 250k mortgage when the house next door could be bought at 60k)…. Vegas is one big community that LOVES gossiping – there is no shame at ALL in walking away from mortgages… when it first happened, you would hear people come up with excuses but now it is almost a matter of pride as to how clever they were to "cheat" the banks. Can't really blame them…
Vegas court systems are great for such matters as tracking Elvis down….
Flippancy aside it means that yes, there is a massive dam wall up with a wave of properties behind it – no one seems to be rushing in to pay their 250k mortgages…
SO – SUMMARY
there are 2 primary theories… either the dam breaks through some other legislation and the banks release the backlog at a flood … or a constant trickle of properties will be released that will equally be eaten by demand at ever increasing prices.I don't have a crystal ball but given that every human I know in Vegas who is a real estate agent has at least 10 investors behind them wanting at least 600 properties, I am erring on the latter.
Have you SEEN the mobile homes for sale in Vegas for over 100k at the moment??? If you SERIOUSLY believe there will be the flood, you would be flipping like crazy – I am not seeing a flood of flips but still… you would equally have to believe that there isn't demand for a flood and there aren't 40,000 investors out there just waiting to pounce.
So, Vegas is dried up for now.
One of the gaps I am playing in is courtesy of now hubby who IS a builder…buying 3/4 built houses that have been abandoned at 2nd fit off. Falls outside the realm of the rehabber but great flips if we are looking forward to the “what next”. Obviously needs a builder but these properties are just completely walked away from and have nigh on everything. I figure next years model for me may be a few of those and a couple of MFR’s in an increasing market.. Work 8 weeks, off 10 while the lobster pots are just sitting out there…
Concur….so so concur.
Lol… Yeah, we all go to entire seminars on 284… The debate rages though that even with judicial foreclosures we will have demand outstrip supply…
I invented the blow up pool at the tail end of the NV summer last year… It starts with umbrellas (shade variety) and ordering in your lunch (everyone does that), then your Esky, then I had a little water bottle sprayer (think 3 hours at 120 degrees and no shade)…. Then I used to just pour water on me and finally I though stuff this et voila … A little pool……
I wouldn’t touch a house at auction in GA…. Not a chance in hell…. Subsidence? Structural, termites and just a different breed… Vegas is so much easier…
I might add that I have since the above also realized I do much better at REO purchasing….. By miles…
In Vegas I used to laugh at how many we’re just crazy over bid on ….. I will hit auctions now in Vegas when the REO’s go.?… I will take my blow up pool and iced drinks though!
POSTED THIS BEFORE AND VERY OLD INFO BUT A GOOD STEP THROUGH….
In Atlanta you just have to add termites to the equation……
Version:1.0 StartHTML:0000000149 EndHTML:0000014617 StartFragment:0000000199 EndFragment:0000014583 StartSelection:0000000199 EndSelection:0000014583 This is an update as to the auction procedures having now sat down with the title agent who has been emailing me the list of liens and upcoming properties. This email is to provide you with as much information as I have (any errors are with full disclaimer that the below is given to the knowledge I have at this point). It will hopefully allow you to make grandiose decisions as to whether this may be a route for you. Remember, there is no real estate agent involved with the auctions – nor are their contracts – this is walking up, buying a house with cash up front, paying off any liens, getting title, cleaning it up, fixing it up and renting or potentially down the line flipping etc.
Now those steps explained in detail:
- The properties that are sold at auction have the potential to be great bargains.
Example: 1905 Emerald Green, 89106 went under the hammer for $40,100 at auction, 2 days later it was listed back on the market for $52k. 1925 Emerald Green was a bank foreclosed property that, whilst 100 sq ft bigger needed a lot of work and was listed for 64k… Just 6 doors down!
- There is NO due diligence time frame, no inspections, no walk throughs, no anything… You can peer through the windows and guesstimate from there. The roof could be collapsing, the a/c may not work, squatters could have broken every single item in this property and you should probably assume they have.
- We do not know for sure which properties will ACTUALLY come up for sale on the day, we have a list that we subscribe to that tells us up to 2 weeks out which properties are SLATED to come up but we do not know at this point:
- whether there are known liens that make it inadvisable to bid
- whether it will be postponed
- what the Trustee’s opening bid will be – which may be 20k over any rational bid you would want to make….– the Trustee represents the primary lien holder… At this point, title is actually still in the Owner’s name who is being foreclosed on and as most of you know, this is the final step before title reverts back the bank and, if the property is passed in at auction. The auctioneer will call initially upon any beneficiaries of the current owner as to whether they wish to bid, they will then say the Trustee’s bid is “x” and if any other offers…. If none, this property will officially become a foreclosed property and appear as such ultimately on Yolanda’s list.
- The night before the auction, we receive the list of known liens from the title agent that provides this free to those who are willing to use them ( – I am happy to make that swap!)… This will be as close to a preliminary title report as you can get and with the exception of HOA fees (which it is NOT recommended to bid on as apparently you should always triple the amount of $$ stated on the lien) the agent felt comfortable that it is highly unlikely (although not impossible) for a big unknown. He has said that National Title Agency will guarantee that you would not ever lose money on your purchase as a result of a lien not discovered or revealed… You may not make any money but at the worst case they would have too much to lose based on that. These and any other liens discovered must be paid off by the successful bidder during escrow* before clear title is presented… These liens will show up on the closing statement provided by the title company handling escrow* (*rough approximate is “settlement” time frame in Australia handled by a solicitor).
- On the day of the auction, the properties come up in random order – there are between 100 and 150 each day and you just have to sit there, listen carefully to the auctioneers very very fast prattle and wait and hope. Any of the following may happen:
- The property is withdrawn from the auction (lienholder and owner having worked a deal)
- The property is postponed from the auction (twice I have had that happen whilst on my “dry” runs)
- The trustee starts with an opening bid that is waaaayyyy too high (think reserve price by bank)
- The beneficiaries of the current owner comes in to bid on the property
- You are outbid
- You win
- To BID at auction you must have a representative acting under Power of Attorney (POA notarized) for and on your behalf with the POA held in the name TITLE WILL BE IN – if that is under an LLC you must have the POA made out to the LLC etc…. POA would in this instance be granted to SelectUSAProperty LLC and be highly limited!… That POA would either
Have cashier’s checks IN THE NAME THAT TITLE WILL BE to match up to the full and total amount of the winning bid – the POA will sign these to the Trustee and be given receipt … This should be to the PRECISE dollar (no change) – so the object of the exercise is to bid by a minimum of 1 penny (1 cent) above the bid before…… Trust me, I have seen these things go to 81 cents to win!
- EXAMPLE: The maximum you decide you will bid up to on Property X is $50,101.51. You should have cashier’s checks as follows: 3 x 10k, 4 x 5k and 5 x $20…. Take $5.00 in small change as well….
OR….OPTION….RATHER THAN HAVE ME PHYSICALLY TAKE THE CHECKS….:
YOU CAN USE A COMPANY THAT RESIDES IN THE SAME BUILDING AS THE AUCTIONS TO HOLD YOUR FUNDS….Their name is: US LS…. They are a Licensed Escrow Agency – the president is a guy called Mark Gross. Their website is http://www.usls.biz <http://www.usls.biz> and his email is [email protected]
… From what I know they would work like the trust account at Silver Canyon… The company is licensed and bonded and charge $300 per transaction… So, let’s say that you deposited $75k with them and gave SelectUSAProperty LLC POA for a property that you won at only $60,500k, they would charge you $300, cut the check for $60,500 and you would have a residual balance with them of $14,200. You can log on to see this balance etc. Please note that I do not have ANY personal experience of this company and can not vouch for them beyond knowing that some of the wholesalers are using this company as their fund holding mechanism. Please do due diligence – they are bonded and insured but I am guessing so was Enron!
- After the hammer drops – assuming you are the winner…
- You are presented with a receipt (Actually immediately after it would be presented to the representative from SelectUSAProperty LLC … Me… )
- Receipt is taken up to the title agency company to open escrow (situated in the building inside and upstairs from where the auctions are held) and open escrow just as “normal” as we do with a foreclosed property – in 7 to 21 days you will receive the deed, we take the deed, clear and pay off any liens, pay title insurance and other title closing fees and title is then transferred to you…NOT INCLUDING THE LIENS, BUDGET $1250 for TITLE COSTS AND TRANSFER FEES INCLUDING TITLE INSURANCE (protecting you from any further liens etc) on a property under about $80k
PERSONAL OPINION ONLY ON STRATEGY (IE DO NOT NECESSARILY AGREE OR FOLLOW THIS AND DON’T SUE ME FOR THE BELOW….)
… Strategy is the BIG thing… If you choose to go down this path, and please this isn’t for everyone – NO DUE DILIGENCE is massive…Firstly…there is little point in trying for just one property…the chances are it doesn’t even come up! Basically about 2 weeks out my personal recommendation and thoughts that are merely OPINION only is:
- Choose zips/areas/age/type of house that you either know well or discuss with me
- Pick 10 properties from the above that WE KNOW WELL – we know what has sold, we know what it rents for, we know the street, the neighbourhood etc… And ones that you would feel very comfortable bidding on that are slated to come up 2 weeks out do as much indirect due diligence as possible on these in that time frame including me attempting to peer through any windows, talk to the occupants and ask if I could take a peak etc (they may WELL still be occupied)….
- Choose CAREFULLY the MAXIMUM BID you would make on these…. I tried to think of it like this: The MAX bid should be calculated roughly as:
- what is a known BANK FORECLOSURE COMP on that street or close to (not MARKET… We don’t want market comps, we want a bargain compared to bank foreclosed – or at least come in on par)….
- Calculate backwards ASSUMING THE WORST as per the following:
- Clean Up – these aren’t tidy houses – these have tenant leftovers/garbage in them…. $1,000
- EVERYTHING broken or needing repairing:
- A/C = $4000,
- Repaint whole house = $1,200,
- Carpet = $1,200,
- ALL appliances = $1,200,
- Light fixtures/labour, broken heaven only knows what = $1,600
- New garage door and opener = $1,000
- New Water heater = $800
- TOTAL = $12,000 = your max bid is a recent equal bank foreclosed comp less 12k!! That probably gives you something BETTER than a bank foreclosed because even the foreclosed properties need about 4k of work!
- Assume that of these 10 that you have mulled over for 7 days: 3 will have cost prohibitive liens, 3 get postponed, 2 have a Trustee starting bid over your maximum and 2 may actually go to bid….
- Further assume of those 2, you get out bid on at least 1….YAY… You MAY get the chance of buying one but you have no idea which of your original 10 that might be!!!
- Make your bid (in increments of 1 penny or 1 cent over the person before you!), stand firm to your maximum amount and cross your fingers. I personally feel that we are retail purchasers – the wholesalers HAVE to make a mark up and I feel that is our edge… We aren’t there for that so we SHOULD dollar for dollar probably have the capacity to outbid them
Alex… Yep here at end June but seriously Vegas break for 4th…. I am a pyromaniac from waaaaaay back and Pahrump beckons! I LOVE MORTARS!!!l. The best thing other than right on red is the legal capacity to blow oneself up in fireworks in the desert sky!!
LMAO….. aaah, yes, we have them all – only a mother could love (okay, being sexist….a father could love too)…..
I will stick to my move in ready 15k no HOA townhomes that will rent for $700 a month in ATL…….heck, actually, was just extolling my old dry cabins (no water or electricity) in Alaska that rent for $500 a month to hippie Uni students….
Oh, sorry for the delay, I was just trying to learn the banjo so that I can come and sit on the porch…. gotta love our little project children.
LOVE IT!
Alex – you are missing the point – I am talking about the Aussies out there that AREN'T licensed agents who charge say $4k – $5k to source the property but THEN charge the additional first month's rent…..
SOOOOOOO – you just have to be aware – you buy the property + you repair the property (separate company) + you rent the property (separate company for many of these spruikers) = x cost + y cost + z cost……..
NOT a seamless and integrated process but 3 succinct companies who can equally blame each other for why your property wasn't repaired/rented/bought etc quickly enough……
Why not just find a real estate agent (NOT charging you 4-5k for the pleasure), then find a gen contractor and then find a property management company…..oh, and yes, ANY good real estate agent (GOOD, ask around if they deal with foreign investors), will SERIOUSLY have the contacts…. you will have to interview your agents though.
I am just making the point that if you are a spruiker and aren't legally able to do x + y + z, you are ONLY going to be able to separate it out but just remember if you are a buyer dealing with said spruiker then you ARE dealing with 3 entities… not exactly a single "buck stops here" scenario.
There is no "win" – no "easy" – just be very very aware that the second you are reverting to your Oz based person as to why your property hasn't been repaired or rented, you ARE dealing with, in the most part, THREE companies…..
On the PLUS side – Alex, you and Jay have it somewhat nailed…….but that IS my point – I just WISH people who couldn't give a TOSS about the back end, would stop making it sound peaches and cream because, just as the Nealein mentioned, just as Richard had to realize and just as MANY understand, for any of us expats, they either haven't a flipping clue or are trying to sell you something and don't care…. so take your pick!
The reality is you need to learn this market… and Alex, if they do, the Jay/Alex theory on life will seem lovely (unless you have the property fetish/addiction)…….
Moi!
Oh sorry……..I should have specified… you wont find us but it sounds like Alanis could do with a bit of help.. When i set this up i knew property management can be disastrous…. And as Aussies we just need more! I always equate it to how comfortable an American would be with looking for a Russian bride over the Internet and what their friends would say…
So we do generally only handle my clients as our expectation as Aussies is a little different plus we are only “us”…. So no over worked property manager who doesnt care…but a team that has been together since the “birth” of your baby…..but we don’t buy what most of the spruikers buy AND it keeps us all together as a group and agency for the next 5 years …. United we stand, divided we fall,,,..never planned this to be “big”…just “right”. I would rather 20 of us become millionaires type concept.
. Things that we put in place that work
1) Get before and after photos of repairs – get scanned copies of every receipt
2) ask for or get or suggest to have a standardized rate sheet for every item of repair….I put one in place ages ago and it is our bible… That way if someone tells you that you need a new toilet, YOU know what you will be being charged exactly the same as the tradie knows how much they will be paid. it eliminates so many issues.. Right down to weekend call outs and holiday call outs.I hate with a passion property management but if it is set up correctly there is hope! I know our babies inside and out and every faucet, toilet and door intimately….. and my guys know that they get the ongoing repairs as well as the start up repairs if they do a good job. I haven’t really thought about adopting other people’s properties and it can be a bit fraught (quality of work etc) but if Alanis or anyone else gets burnt, I am there for you…
FYI, the reason people charge you to rent your property out is because they are dealing with 3rd party property managers. To rent a property you must be a licensed agent. If your facilitator is NOT a licensed US real estate agent they would HAVE to outsource or be working very closely with an agency willing to wave that fee. I have found VERY few people get the big picture……. But those that do know darn well that we intend to be together as a group for the next 5 years.
Again, find a licensed real estate agent… We start renting your property the day we close the darn thing because we can!
That being said, as I always offer… If you need something or a driveby, I am slap bang in the middle of Lithonia and Ellenwood (as everyone jokes “Emmawood”) .. When not in Vegas ….and happy to help.
Very sorry if above sounded like advertising.. I had tried to change but Jay beat me to the button!
lol…….a 10k house needing work?? Not move in ready???? Say it isn't so!
I am in Atlanta if that helps and will lend myself to the cause… As we only charge $115, $1500 to paint a house up to 2200 sq ft and 7% of gross rents for property management with no renewal or reletting fee, if you need someone on the ground I HATE PEOPLE BEING SCREWED HERE!!!
If you paid over 8k for repairs and that didn't include an A/C – YOU WERE PROBABLY PRETTY HIGHLY CHARGED……
Let me know if you want a drive by I am everywhere tomorrow – literally from Cobb to Clayton and back again…
I think you will find it is all relative as to your experience and definition of "pro landlord". Atlanta sux no questions but Vegas…….aaaaaahhhhh, sigh… mmmm, I miss Vegas…. sad mobile homes are over 100k there…..lol..I suppose we should be happy that we will be raking it in on the upswing!
Oh Alex… you poor misguided soul – separated albeit by birth in mindset…. (laborious sigh audibly heard here)……. I buy my mocha cream at Lowe's like any other good human… and I get my $50 a bag for underlay and circumvent and yes my mocha is .63 a sq ft retail etc etc… so I am NOT dissing Lowe's, I am merely talking hard yakka here (Aussie term)…. HOW IS THAT THE CHEAPEST RETAIL CARPET BUT I LOVE IT SO….. tenant proof – literally…and pretty, I seriously love it – admittedly you want seriously good underlay no 6lb'er for that BUT BUT BUT
Let me now point out the blinds differential – Home Depot… down pat… i know I end up in the gutter but SERIOUSLY?????? How can you surpass the $79 all in one in ATL or $69 in Vegas… Lowe's will be better for design, granted (unless you have an IKEA, or European anything)…… but yes, the Home Depot Safari or Maui tile or any of their great solid floor tiles rock….
Face plates and outlets are my personal fave… $1.98 for a box of 10 faceplates or $3.98 for a box of 10 outlets…okay… how about the $2.98 for pack of 16 lightbulbs……. sorry, but I'm an HD gal at heart…
EXCEPT <moderator: delete language>…… SPEEDWALL INTERIOR EGGSHELL IS GONE??? Used to be $54 for 5 gallons……
BEJEZUS that put my paint costs up…. I am now at (choke choke) $1500 for 2 tone up to 2200 sq ft (paint included)… WAAAAHHH – any ideas, guys?
Oh Texas – taxes, laws, pro tenant and don't mess with Texas??? Sigh…… Love Austin (did bid on a property there) & San Antonio (studied the river walk and had them bid on my personal city revitalization effort) but still… just for newbie fellow Aussies, caveat emptor on those factoids….
Hey I can do limes and Tequila! I also love sales pitches and can pull them to pieces sober or drunk so lets go with Cabos, AND a bus tour to whereever to look at BOTH timeshares and "exclusive" tours to fabulous properties where there is nothing but duress/pressure threaded into both – but at least if we are drunk, all the offers we write are unenforceable….
YAY… !
Yeah, I recommend going to the Timeshare Sales Spiels in Mexico as well – great beverages… oh, except that is duress! Ola!
Lol…. Yes, we know that … But it lends itself better to boom bust scenarios…. Fascinating to watch!
With you….Mine is successive 1031’s to an eventual OO property worth billions….Beach front …
Don’t know th answer but I suppose foreigners can’t do 1031’s then… ??
Yes… Jay – you point out some very very good points….. I should have kept it specific to an NV discussion… WI – yes it IS amazing how quickly the market changes….. but we will all soon be on phase two and playing all the different nuances…. or sitting back and keeping the $$ rolling in..
NO NO NO NO NO NO NO
guys, SERIOUSLY? I love you guys… Don't do this to me….
every investor is different – we all have different needs, we all have different goals. I was with someone yesterday who asked me "why on earth would you go for yield????" I had to point out that I live totally off passive income, someone retiring might be too and thus our houses are in totally different areas and subdivisions (I view the Select thing as a pure hobby to help fellow fanatics at this point and as pocket money for things like the Masters etc and to find "like minds" for an addiction I have had since birth… ergo investment club… all for one, one for all..)… but that being the piont….. EVERYONE IS DIFFERENT…
Cattle herding has rarely led to anyone appreciating that Daisy at only 3 years of age and Mabel at 10 years of age were both going to the slaughterhouse…..
Naughtyj…. ZERO question – in the US – no harm no foul on a primary residence… off you go, default away and 2-3 years later, with a bankruptcy AND a foreclosure you are right as rain to get a BRAND NEW FHA LOAN AT 4%!!! YAY!!!!
In Oz… get real… no chance you can walk away
However, dear US investors PLEASE be aware that the start of this plummet was 2009… so yes dear friends…
YOU ARE NOW COMPETING AGAINST ( OR SOON WILL BE ) ALL THOSE STRATEGIC DEFAULTERS who have in the interim, lived with Mummy and Daddy, pooled their money, followed their attorneys advice and are starting all over as brand new borrowers with 20% down…
Aaaaah,,,,, oh don't we wish in Oz all that was possible.. I mean, why pay a 500k mortgage if you could just walk away and 3 years later start up again if the asset didn't quite improve to the extent you had hoped for..
- The properties that are sold at auction have the potential to be great bargains.
