The Back Alley Archives

My attorney is drawing up paperwork for 4 as I type this.

ok - so i'm assuming you've bought em before since you're doing 4 now. nevermind. i'm sure you're aware of all that comes with foreclosures then...no worries...carry on.

I have actually never bought one before. Keep in mind, people(I don't know about you) but people in general associate a foreclosure with a dump. Some dirtbags with no money was running a meth lab out of it and such. This is not the case. The four that I am buying are brand new. They have never had a single person live in them.

A developer built a 1000 home development in Ft. Myers. He only sold around 600-650 of the homes as he mistimed the market. These are 4 indentical houses that are 2400sq. ft. All were on the market for 230,000. I am buying them out of foreclosure for 115k a piece. I will have to keep them for a minimum of two years to avoid capital gains tax but that will not be a problem. I will rent them out for two or three years. I can rent them for more than the mortgage payment. Even if I can only sell them for 160-175 later. I will still make a good profit. And if the market times out right and I can get tham back to that 220-240 range then even better.

Of course I could fall flat on my face, file bankruptcy and sleep on M7's couch. Who knows.

[img]{SMILIES_PATH}/icon_lmao.gif[/img]

sounds like the word 'foreclosure' is taking on a new face amidst the whole sub-prime mtg borrowing debacle we're experiencing right now....thanks for clearing that up.

in the traditional sense, foreclosures are properties taken away from the banks...banks property until that mtg is paid off right? so you aint making your payments and with due process, banks take em back...banks are in the business of money, not in real estate - so they sell em as is...keep the process very, very simple....often, they're selling homes with the occupants still in it...whacked right? anyways, it's very difficult to remove occupants...could take upwards of a year or more surprisingly...occupants, sensing no chance of staying often let things go and in 2 years time, lots can happen when you don't give a fuck...

so are these houses finished? builder finished 'em?

Like I said Rad, this is an experiment. I am still young enough where I can recoup the loss if I fall on my face. I have tons of disposable income and want to try to do something with it. I won't be able to retire because of this, but if I can make 200-400k out of this free and clear then it will be a good start. In the next two years I will have the house that I live in currently paid off and my condo is already free and clear. That will give me 5 houses and a condo that I own at 28. Good start I think.

M7- I still stand by them at least looking for a foreclosure. I wouldn't bother with something 10-15 years old but there are plenty that are a year or two old. Who knows, they may stumble into something like I found that is brand new. Doesn't hurt to look.

sounds like a plan tt...very savvy....all the best!

Like I said Rad, this is an experiment. I am still young enough where I can recoup the loss if I fall on my face. I have tons of disposable income and want to try to do something with it. I won't be able to retire because of this, but if I can make 200-400k out of this free and clear then it will be a good start. In the next two years I will have the house that I live in currently paid off and my condo is already free and clear. That will give me 5 houses and a condo that I own at 28. Good start I think.

M7- I still stand by them at least looking for a foreclosure. I wouldn't bother with something 10-15 years old but there are plenty that are a year or two old. Who knows, they may stumble into something like I found that is brand new. Doesn't hurt to look.

wtf am i doing wrong? we're about the same age (28 in may) and i'm in no position to buy one place, let alone five. had i not gone to grad school, i may have been able to get something small though.

steet smarts vs book smarts.

TT...well here's the question I have about these houses that builders are trying to unload. My in-laws want good and reliable neighbors...is there anyone else living in these neighborhoods? I just picture them living in this beautiful home with empty houses surrounding them. They also like to have a fair amount of land (at least an acre) and living in a "association" type development is a no-go.

why the need for good, reliable neighbors? safety?

wtf am i doing wrong? we're about the same age (28 in may) and i'm in no position to buy one place, let alone five. had i not gone to grad school, i may have been able to get something small though.

I don't think you are doing anything wrong. I think I told you huys this story before but since you asked how I did it then I will retell the story. I got very lucky in that my parents put 100k down payments on mine and my sister's first houses for us. That was there way after college of making sure we didn't struggle. My brother chose to take the money and start his construction company. I sold that house at the peak of the market and pocketed almost 300k. I moved into my condo(the condo market had been killed) and I paid cash for a 1200 sq ft condo that overlooks the beach for 100k cash(10 years ago that same condo would have been 400k). I took the some of the remainder of the money, paid off every bill that I had in the world.

I then bought Tricia's BMW and still put around 140k and change into the bank. At this point, I am 25-26, free and clear of my home, cars, credit cards and making great money as an engineer. For two years, I could put save almost all of my money. I then put a down payment of around 75% of the purchase price of my current house when we moved out of the condo into the house next door to Tricia's parents. I rented out my condo for $1500 a month and send that money every month to my mortgage payment on MY house. Did I lose you yet?

So at this point, my condo rent pays triple house payments each month for me and ALL of my money is still disposable. Long story short. My parents did alot of the work, the housing market did alot of the work and I have been smart enough not to go run out and buys tons of shit I don't need. I could go out and buy a Porsche or a 40 ft boat or some dumb shit like that but I have a goal to meet and that wouldn't help me get there.

Well that and they are social beings who are no longer working. They don't want to just sit in their house all day. That was one of the bones of contention between the two of them though. My FIL wants land and wants to be sort of secluded from others...my MIL wants neighbors...people who could let their dog out if necessary, water the plants...have lunch with etc. So they sort of agreed on a place similar to ours...we have an acre and half of land but we also have neighbors on either side that we rely on. Does that make sense?

^^ buy the porsche or the 40 foot boat if you want to...you only go around the world once.

TT...well here's the question I have about these houses that builders are trying to unload. My in-laws want good and reliable neighbors...is there anyone else living in these neighborhoods? I just picture them living in this beautiful home with empty houses surrounding them. They also like to have a fair amount of land (at least an acre) and living in a "association" type development is a no-go.

These houses are in a development. It is not a gated community like I live in now but they are an association kind of deal. M7, even people that built a house on an acre of land sometimes can't afford them. They just have to look. I don't want them to do anything they don't want to do, but just spending a couple days looking wouldn't be the worst thing in the world, right? If they can not find anything then so be it.

Like Rad said, foreclosures aren't for everyone and I wouldn't buy one that was over 5 years old because that is when stuff starts happening, AC goes out etc. I am great friends with the president of the mortgage division of Riverside bank. I will call her and see if she can get a list of foreclosure properties around Ocala. At the very least, your parents might be able to just look. If they can save 50-75G then it would be worth it to at least look into it, no?

If they decide it isn't for them then they haven't lost anything but a nice afternoon driving around Ocala looking at houses and enjoying each others company.

i love the BA

we get shit done for our peeps!!!!

Of course I could fall flat on my face, file bankruptcy and sleep on M7's couch. Who knows.

As long as you bring your brother to service me and my house, you are MORE than welcome! [img]{SMILIES_PATH}/wave.gif[/img]

I don't even no where to begin. I am deeply hurt that I am not good enough to service you that you want my brother instead. My feelings are hurt.

you left me at 100k from parents. [img]{SMILIES_PATH}/icon_wink.gif[/img] good thing you're being smart about it.

What kind of mortgage did you take on those places, TT? I saw something yesterday where fixed rates had moved higher again, while the adjustable had gone lower, despite the Fed lowering rates.

5/1 Arms with NO prepayment penalty. I started to go with 3/1 but wasn't 100% sure I could make my money in the next three years, if I do then I can still sell without the penalty.

Rates are actually very good right now. You can get a 30fixed for around 4.2-4.6 with excellent credit.

5/1 with no penalty sounds like a good idea. Give yourself the luxury of some extra years.

And I've said it before--you ever need an advisor on some of your extra pennies, let me know. I can get you into one of our managed account options--give you a good diversified portfolio.

5/1 with no penalty sounds like a good idea. Give yourself the luxury of some extra years.

And I've said it before--you ever need an advisor on some of your extra pennies, let me know. I can get you into one of our managed account options--give you a good diversified portfolio.

Yeah, we are going to have to get together and discuss some things one of these days. I never thought I had enough to worry about an advisor but I am getting more and more. My liquid assets right now are probably around 125k if I HAD to get money today, bank accounts, 401k, IRA's etc. That to me isn't enough to use a broker but it may be a good start at a trial run. If this deal works out the way I suspect it will, I am going to invest the entire thing.

I want something very diverse but also easily accessible. I have never been one to shy away from a challenge or take a chance. If another deal like this came up then I would want to be able to jump on it. Does that sound like something you could do?

I don't know about the real estate part of it, but as far as investing the other funds there, I could definitely help out. I'm going to study up and get my Series 66 so that I can be a licensed advisor as well as a broker and then I'd be able to show you some of our managed options. We have our own program we run and we also partner with Russell to offer their managed accounts. And those are just two of the resources we have available.

Just let me know down the road and we can start talking about some of this stuff.

Could I roll over my stocks, 401k, and IRA's to you right now if I wanted? I am not sure how that works.

TT...if you think you could handle the challenge of resigning my house and all the contracting nightmares that entails, then by all means leave your bro at home. You are still welcome...I just need me a good contractor!!!

Could I roll over my stocks, 401k, and IRA's to you right now if I wanted? I am not sure how that works.

I'd probably advise you to keep your 401k with your employer, but if you gave me a copy of a recent statement, we could run a report looking at your current allocation and make some recommendations.

The IRA and retail accounts we could transfer directly over to RayJay. I would just need to get some info from you and fill out the paperwork. I could do that in about two weeks, once I finish up with the conference we're putting on in Orlando (that's keeping us all a little busy along with the fact that I've been helping to transition in a couple of really big advisors who signed on with us from other firms). Just let me know and we can get that conversation going off-line.

No problem Josh. We will catch up soon. Thanks dude.

Allie- I just got off the phone with Margaret from the bank. She is going to try and run down a list of foreclosures with addresses. When she gets it I will PM it or email it to you. IF they wanna check them out, cool...if not, then no problem. Just trying to give a different view on the situation. Hope it helps somewhat.

HEY TT...can you find some for both Ocala and Gainseville too? My MIL just got SO excited when i told her that!

HEY TT...can you find some for both Ocala and Gainseville too? My MIL just got SO excited when i told her that!

Sure, I will text he about Titletown as well. No problem at all.