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Just read through all the posts. There is alot of mis-information out there… Possibly because Bush lives in Texas?? Kidding.
Listen, Im an American citizen, lived in Dallas/Ft. Worth before, worked as a real estate agent (commercial, residential, development) for the past 5 years in the States.
A friend of mine is one of the biggest developers in Texas. Want to know what the catch is when you’re sitting up at night salivating over these supposed $5000 homes? Besides the fact that the cheapest house worth a anything is about 10x that much. But the biggest struggle is that the renter pool is SOFT. No renter – No income. Homes can sit for 6-8 months without a renter and guess whose kicking themselves now? You.
To debunk some other things:
1. The only thing that is negotiable on a mortgage rate is the half-point or so you pay to the broker on the front or the back end. The other marginal part depends on your credit. That’s about it! The actual base rate is non-regotiable.
2. Americans dont invest in real estate? That got me laughing. Every single Tom Dick and Harry fancies himself as a property investor and probably has a home-printed business card to prove it. There are LEGIONS of property investors and trust me – they’re all over the next ‘hot’ market like white on rice.
3. People have been blabbing about the virtues of Texas for years. Can you find some great deals? Absolutely. Caveat Emptor! And do your homework!
Thanks for the words of wisdom.
Just got off the phone with the OFT. Their explanation was clear as mud… surprising.
Take some message: check with the counsel before I go to work. Which means: check with the counsel before I buy, which means talk to 3 different people at counsel before I get the right answer so I can consider a neighborhood in which to buy a potential reno. NIGHTMARE!!
Hi Nathan;
I had similar problems, but with agents in the States. Well, I was an agent in California for 5 years – but this was the common problem when I was the buyer trying to get my ‘creative’ offer though to the seller/vendor. Here’s the problem:
Most agents have no idea how vendor financing works. And I will go further to say most ‘investors’ don’t really understand it either. So even when you get a agent whose willing to play ball, the investor cant even explain it to the agent who THEN has to go explain it to the vendor who just wants to sell his/her house (not finance someone else to buy it from them). The agent doesn’t want to look an ignoramous, so they say: Shove off Mr. Creative Investor. People want to sell their homes to credible people with money, not penniless blokes just hot from a seminar.
So here what you do: Ask the agent if you can have a meeting with the seller in person (with all parties present, obviously). The last thing you want to do is to turn your potential helper (the agent who wants to get paid) into your own personal and private enemy by appearing as if you’re trying to go behind their back to get to their client. Doing that to any respectable agent will make them look unprofessional – something that good agents take very seriously. Good agents are control freaks in case you haven’t figured it out. Moreover, if the vendor could sell their property by themself, they would. But most of them don’t know squat about the ins an outs so they rely very heavily on their hired guns opinion. If the agent says: Mr. Vendor, you have a crackpot investor here. 9.999 times out of 10, the vendor won’t give you the time of day – even if you were the last ‘buyer’ on the planet.
If you’re a younger guy, bring an older person with you for credibility. Not your mom, preferably someone whose a property veteran and can handle the myriad of questions and objections that the vendor will come up with. You’re trying to get them to TRUST you, because after all, VF involves trust to a certain degree.
Objection handling:
How do I know you’ll make the payments? Look, Mr. Seller: I am going to put 12 months of monthly interest payments into a third party bank account (we call them escrow accounts) so that you know Im good for it. The money will be sitting there and paid out every month. Or 6 months, whatever you decide.
Offer them a lump sum of money vs. amortized payments over 10 years. Who would take $20k right now vs. $50 a week for the next 10 years? I would. I would be losing $4K as a vendor, gaining $4k as a buyer (also called discounting). Plus, the vendor gets his house sold plus a $20k lump sum to boot.
Don’t have an extra $20k? Think of something else that would be valuable to the vendor to make the deal sweeter for them. I’ve had some friends deliver a Harley Davidson in exchange for VF.
Anyways, hope this helps.
Rachelle
The Office of Fair Trade stipulates professional conduct that a salesperson MUST abide by or risk an $11,000 personal fine and possibly losing their certificate or license (whatever this guy has). Do his future victims a favor: go straight there and lodge a formal complaint.
You can also do it online. Not sure what state you’re in, but here is the website for NSW:
http://www.fairtrading.nsw.gov.au/Property_agents_and_managers/Rules_of_conduct.html
Rachelle
Last thing: The worst thing you can do is do a crappy job. Buyers can see lipstick on a pig from a mile away.
Hi Skuz —
Id have to agree with the general comments on this one. Mould? – Gotta find out what’s causing it. Then, to protect yourself, it should be remediated by a professional (not a handyman with equipped with sugar soap and a hammer). In the States, mould is the kiss of death for a property. We avoid it at all costs.
I hear you on the cosmetic fixers though. Because they’re so ‘easy’ there is more of a demand so the price gets driven up. So to avoid the crowd, you’ve start looking at more problematic properties. I’ve seen ‘fixers’ sell for more than remodeled properties because of sheer ‘potential’ alone! Well, this could very well be your lump of gold, but I would say do the following:
Get as many plumbers, electricians, inspectors, mould experts, foundation experts, etc etc, over to the property as you possibly can and have them give you an estimate on what it will cost to fix it. They will also be able to tell you what’s really going on with the property. Make sure you get these bases covered before you lose any money than absolutely necessary.
In reality, a cosmetic fixer is not a big deal. Hard work? Absolutely. But it doesn’t take a rocket scientist to roll up his/her sleeves and apply paint.
For your first deal, consider hiring a – what we call – general contractor to manage all of your tradespeople during the remodel. You show up everyday and follow him around, poke your head in every job, help out, find out how its done, learn about work flows. Will it cost more? Yes. But, in my opinion, its worth every penny you pay for it.
Oysters don’t learn to make pearls by attending pearl making seminars.
Those are the lessons I learned. I hope this was helpful.
Take care and good luck.
Rachelle
