July 2014 IC Meeting

Almost two weeks ago was July’s Investors Club (IC) meeting. It was the same day that I had to install the new stove for Mallory in Property X, and I wasn’t in a very good mood after having to lift that damned stove all those stairs with Pelcom’s Nate. I got there purposely late and, as I expected, it definitely wasn’t as information-rich as last month’s meeting.

Some guy who specializes in buying foreclosures came to speak. I wasn’t all that interested in foreclosures, as they usually have them in the bad areas that I don’t want to be associated with. Nevertheless, I decided to pay attention and found some of his information interesting. He mainly dealt with how banks dole out foreclosed properties and the best ways to find and purchase them:

• I have to do my due diligence. Many foreclosures are run down and shitty, so I definitely have to use all my experience to see what needs replacing and what can get the property into rentable condition. It may help to bring a handyman along to give a rough estimate of how much repairs would cost. It also helps to know whether I’m gonna flip it or rent it out. Obviously I’d prefer to rent it out, but it would be nice to find a foreclosure in a developing area so that I can get some type of value appreciation.

• Banks usually like to sell foreclosures to owner occupants, using the first 21 days or so to accept applications from owner occupants only. Banks generally like to see that whoever buys it will be living there, as it usually means a safer investment. In most cases, they give applications from owner occupants first choice before they look at the applications of investor scumbags like myself. We asked if there was a way we could pose as owner occupants, but he said it isn’t worth the trouble. Many banks, like Wells Fargo for example, will open a foreclosure to all prospective buyers without a waiting time for investors to send in their applications.

• If I’m approved, I must have my bank statements, tax returns, and cash ready. Yes, cash. While it’s possible to get a foreclosure through a mortgage company, banks like to get rid of foreclosures nice and quick, which none of the usual hiccups that happen during a mortgage process. Obviously, cash buyers gain more favor from banks.

• In Smalltown and places like here, there’s usually a $1000 deposit. The buyer (me) would also have to pay for things like the abstract, land survey, deed stamps, etc. Average cost is about $1500 for those things, so an extra $3000 should be saved up along with the purchase money.

• He recommended Homepath.com to view foreclosure listings.

Once he was done, the president of the club bellowed her usual bullshit about the advantages of becoming a member and upcoming conferences that we would get discounts on if we sign up. The meeting was then concluded and I got the hell out of there. I still wasn’t in the best of moods, but I’m definitely looking forward to the next meeting. There will be a speaker there who will talk about how to gain access to hard money lenders and private lenders. This would be ideal for anyone looking to buy those same foreclosures without having to put money down. This would also relate to last month, where that guy Donny talked about finding rich people whose money we can use to buy properties without spending a dime of my own money. Looking forward to it.