The Short Sale Nightmare Pt. 2 Dan Wins

Staying focused on the prize is the key to working foreclosed properties and or short sales. Never let your emotions rule the day. Lenders are normally heavily bureaucratically laden and have a myriad of details to follow through. Hence the reason why Lender’s will go out of there way to work with a Homeowner rather than to foreclose and take the property back

In the case of the Victorian home in Mt. Tabor Portland Oregon for Dan, the Seller had chosen not to work it out with the Lender. They just wanted out and did not care what the consequences might be.

I was very fortunated in this case to be working with a Lender who’s department head was not on vacation or dashing out to some conference in Brazil. This individual was on top of her game. She was attentive and often new the current status of the inventory that she had to work with.

In the case of the Victorian home the seller had recently refinanced the home taking some of the equity out only 90 days previously to our offer. With out going into the gory details, suffice it to say he had spent all of the money ( can you say party on man ).

Armed with the knowledge of what the Lender would be interested in looking for should they decide to work with my buyer Dan, I set about by providing it.

• Dan hired a company to do a Full Home Inspection, We gave a copy to the Lender.
• From the Inspection Dan’s construction company gave a bid for the work.
• I also provided detailed bids from the sub-contractors that would be doing work.
• I created an accurate Market Analysis for the property, and sent it to the Lender.
• Provided open lines of communication between the Lender and my self always answering the phone when they called with questions.

The Lender reviewed all of the documentation given and requested an extension of time to do an appraisal review of the previous appraisal and to schedule to new appraisals.

The end results were that the Market analysis that I prepared were almost exactly the same conclussion drawn by the two independent appraisals done by the Lender.

The Lender subsequently accepted Dan’s offer some $60,000 below what they were owed. Closing took place only 45 days longer than anticipated.

Yes Short Sale’s and Foreclosures can be a Nightmare, but if you keep your head in the game and can work through the bureaucracy without becoming frustrated, there are opportunities to be had.

Hot Fixer Market in Portland are You Ready

A little less than a month ago I was sitting in front of an Investor who had called me about putting his Rental Property on the Market. I had done all my homework and felt that the property a 1907 Fixer located in the Alberta Arts District of Portland Oregon should sell fairly quickly at the listed price of $259,000.

The prior three weeks leading up to this point in time had been spent in research for value. The property is somewhat nonconforming in a good way. Providing comps was the tough part. The Seller was to give notice to the tenants so that we could begin with a vacant property.

The key to selling Fixers is accessibility for Buyers. They frequently have very tight schedules and will like to see on the spur of the moment.

So as I sat there in front of the Seller I was totally surprised by the fact that no one in the last three weeks had begun the process of giving notice to the tenants. On top of it the Seller was now leaving to go out of town and would be gone for four or five days.

Setbacks like this are an inconvenience, and unfortunately just part of the business. I began the marketing by putting into the MLS and an add on Craig’s list. Within a few hours the phone began to ring from prospective buyers and real estate agents.

I set up the first showings for eight days later. It was all complicated as the tenants did not speak English and I was left to wait until the Seller returned home.

The first showings did not go all that well. I arrived about 15 minutes early to discover the tenants who were supposedly going to open the doors, were not at home. A quick call to the Seller and the twenty some buyers and agents were all left to wait as the Seller made his way to the property from a small community near by.

When he arrived finally he discovered that the tenants had changed the lock and he was not able to provide access. Disappointed several of the buyers and agents began to leave when the tenant showed up and gave access.

A rocky start to say the least. As the buyers began to filter through I had that one on one heart to heart talk with the seller about access. He quickly said that he would produce a set of keys for me as I had previously asked for admitting that he had thought that it would not be necessary even though I had previously warned him.

The first round produced nothing. Over the next few days I began to field calls and set another showing appointment for 4 days later. This time armed with the keys the showings went off without a hitch.

Some two hours later the call came in from a Buyers agent and her client. They had written an offer of approximately $20,000 shy of full price. I gathered up the paper work and made my way towards the office. I had just barely left her side when the phone rang again. It was another Buyers agent and there Buyer had written a full price offer. All cash to close in 15 days after inspections.

Feeling much better now and armed with two offers I made my way towards the office. Once again the phone began to ring. It was Chris one of my long term clients who I had told about the property right after I had listed it. Chris had been busy but wondered if I could meet him at the property within the hour to show him. I told him that I had 2 offers in hand all ready. He said that he still wanted to see the house. I called my sellers and they said that they would not be available until the following morning.

Chris loved the property and after walking outside asked how much it was listed for. I told him the listing price was $259,000. You have 2 offers in hand already he asked. Yes I do.

I will offer $269,000 cash a 10 day closing no inspections no contingencies. Fine I said and began the paperwork. The following morning the Sellers reviewed all of the offers and quickly accepted Chris’s offer.

The Property Closed 3 days ago. I asked Chris what compelled him to write an offer $10,000 above full price. He said that he new there were other offers and that in five years he probably would not remember the difference between $259,000 and $269,000. But he would instantly be angry if he lost a great property over a lousy $10,000 bucks.

When the Fixer Market Heats Up Will You be Ready ?

Herb Hamilton is a Real Estate Broker with RE/MAX Preferred Inc. Realtors working in Portland Oregon

                               ” A Real Estate Transaction with Herb is one YOU will Profit from “

http://www.hot-portland-oregon-real-estate.com/ or http://www.hotpdxhome.com/  A Web Site full of local Portland Oregon information and real estate searches for homes.

http://www.househuntportland.com/  A Web Site for the home buyer. Receive updated real estate listings daily or hourly 24/7. Sent by email on a street map with a Photo a Description and an Address.

http://www.portlandflips.com/ An Investors Web Site. Spend your time analyzing the results that will be sped your way within minutes of becoming active in the local RMLS.

“Fixers, Flips, and Rehabs” Part 3a Doing the Project the Begining

In last weeks post we covered Finding the Right Project https://portlandflips.wordpress.com/2007/02/19/fixers-flips-and-rehabs-part-2-finding-the-right-project/ . This week we will cover the beginning steps necessary in Doing the Project.

Over the years I have personaly worked on many Projects of my own. I have also worked with a great number of rehabbers as a consultant to thier projects like Gary’s 1950’s_RANCH located in the Fabulous OVERLOOK  neighborhood of Portland Oregon. Or Isa’s SWEET_VICTORIAN close to Historic PENINSULA_PARK in North Portland with it’s award winning Rose Gardens and Community Swimming Pool. The one thing that has remained consistent with these great Rehabbers is that they have a game plan for Doing the Project.

One of the most successful strategies for doing your project starts before you take possession of the home. It starts with an analysis of the Home inspection Report that you should have done during the purchase phase. You may have had ( if not you should have given strong consideration to ) additional inspections such as :

• Full Home Inspection by a Licensed Home Inspector ( license required in Oregon )
• A Sewer Line Scope
• An Oil Tank discovery and DEQ test if one was found
• Roof, Electrical, Plumbing, Foundation or Structural inspections if needed

After a full review of all of your inspections you should immediately begin to call all of the Professional Contractors and or Sub-Contractors you may need to do the work you are not qualified to do. Make sure they are Licensed and Bonded and have good references or are in good standing with the OREGON_STATE_CONTRACTORS_BOARD  . Be sure to check out all the great information the board has on their site covering Permits and rehabbing homes etc. Now that you have identified the work that you don’t want to do yourself, it is time to ask for bids and availability of those workers ( contractors etc. ) who you have chosen to do the work.

Once the Closing has taken place it is now time to do your first in earnest walk through. Be sure to take along your Realtor. The Realtor who helped you purchase or you intend to work with on the resale of the project will be invaluable to you. Realtor’s have Great insight as to what the Buyer’s are looking for in today’s market. It will help you so as not to make a mistake ( usually caused by Ego -or I can do it myself attitude ) that you may be sorry for later. I have seen so many of these type of mistakes. I do get tired of hearing “Where were you when I needed you ? ”  I was right here all the time.

Back to the walk through. Be sure to take a flashlight, Measuring tape, Tape Recorder if it helps you remember, Digital camera and the trusty yellow note pad with plenty of pencils. The walk through not only reinforces what you had seen before when you were in the purchase phase. But it also is a chance to look at some of the solutions to those existing problems that your mind may have been working on while waiting to close. In any room that you intend to modify ( add a bathroom or staircase etc. etc. ) you will want to measure and draw a diagram of that room and any adjacent rooms that it may effect. In other rooms where you might just be doing cosmetic work like Patching walls and or painting etc. identify those rooms with a name. Like the Front bedroom or bedroom number 1, anything that will help you and your crew to stay on track. Heaven forbid your workers begin putting in a staircase to a room that only needed painting.

After you have completed the walk through and have created the drawings with the long list of work to be done. It is time to go back home and work out a scheduled work list. It is best not to take on to many areas at one time. Be sure to schedule work around any Contractors so as not to step on each others toes. It is important to remain consistent in your work. Do not finish one room at a time ! It is better to tackle all of the major work, wall moving, bathroom building, structural work, sheet-rock work etc. before you move on to the next level. It is just to easy to damage a finished room while walking through it with tools and or materials. Be sure your schedule has a time to start  and finish work and an expected date of completion for individual projects as well as the entire project.

The final portion is to double check prices on materials and or fixtures. You should have a partial list made up from the intial walk through made in the purchase phase that helped you calculate the cost of rehab to the project. List all cost of materials etc project by project. Example, kitchen would include any cabinets, fixtures, flooring, etc etc. 

Next week in  Fixers Flips and Rehabs Part 3b Doing the Project the Begining, we will cover the actual construction work.

” A real estate transaction with Herb is one You will Profit from ! “

Townhomes are not my Beef but Poor Quality is !!!

What a beautiful day. The tunes are playing and I am driving through a neighborhood that I had not been through in a while.  As I came around the corner my eyes began to focus on what appeared to be a new Town-home development. Now don’t get ahead of me. I don’t dislike town-homes or row-houses. In fact as a Real Estate Broker working in the Portland Oregon metro area I know their value. They can be the perfect answer for the first time Buyer looking to get into something they can afford or a great alternative for those who may not want to chase a lawnmower around any longer.

But here is my Beef. Over the years I have made an effort to affiliate myself with people who have high quality building standards. Most of my clients are Rehabbers and Builders. For those not in the know a rehabber is someone who buys homes, usually fixers, to Remodel, Renovate, or Rehab. In the early days of my career when their seemed to be an unending supply of cheap fixers and rehab buyers were around every corner. I decided tomake some choices about who I would work with. The following guidelines have served me and my clients well. I chose to work with people who create beauty and value. By doing so they create the future Comps that they will need to support future sales. If they were to do poorer quality work they would be working against themselves by creating a group of Comps of lower sales prices .

This brings us back to the topic at hand and my beef. Town-homes of questionable taste. You can spot them even from a distance. The poorer quality really shows up though once your’e inside. It truly is a shame. Working with builders and rehabbers I know what the bottom line costs are on these projects. I also know the costs associated with doing enough to get by or going the extra mile. It is just not that much difference in money.

So why not go the extra mile ? Well it might be the builder or rehabber just doesn’t have the skills to create better quality. Or it might be that they don’t really believe in themselves or the market. I believe however that it might be something else. Two of the builders I work with, Peter and Richard although competitors, they both share a common philosiphy. They both want to be proud of their legacy . The other day Richard shared with me his vision and hope for his future. Well into his retirement years and sitting in front of a Cozy Fireplace he envisions his grandson rushing into the room full of excitement. His grandson bursting with enthusiasm had seen an older but beautifull home that day. After enjoying this future conversation with his grandson Richard would lean back in his Rocker in front of the fireplace and say ” Yep I built that one in 07 “. 

It is all of our responsibilities to create and insist on homes of lasting value and greater standards of quality construction. Homes that can stand up as a testament to who we are  as a people.