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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Here are some additional points to consider. Posted by Ward-CA- on December 18, 2001 at 7:10 AM In Reply to: Have I done enough research? posted by Jake on December 17, 2001 at 11:22 PM : Ok... I am sure I am going to begin to frustrate some folks but here goes. : 1. I identified a property that appears to have a reasonable amount of equity to flip. approx 50K. : 2. I identified a first (200K) and a second (30K) trust deed. : 3. I went to the courthouse direct website, and got copies of both trust deeds, and the trustee sale notice. Everything appears kosher, no partnerships, or other parties mentioned as part owners. : 4. I went to the LA County assessors website and confirmed back taxes of 10K. : 5. I have viewed the property. : 6. So if things go well at auction, assuming this goes to auction, I get the property for a bit over 200K, pay off the taxes, do approx 10K worth of rehab, the second falls away, and sell for somewhere around 275K. : Question: What am I missing? Is there more to this? I guess there could be a lot of competition at auction, which could eat up all margin for profit. But besides that... should I be doing something else? Should I rely on docs from an online title/lien research company? : Any insight would be appreciated! : Thanks, : Jake =?=?=?=?=?=?=?=?=?=?= Jake, 1. You don?t say anything about how you determined the current fair market value of the subject property. Was it sold comps? An appraisal? Did you drive the comps and match them to the subject property? 2. How do you know they are 1st and 2nd trust deeds without assuming so? They certainly aren?t marked as to their priority so how did you make the determination, just guessing? How far back did you go and how far forward in time did you come? By the way did you check both trust deeds to see that both were signed by all of the owners of the property at that time? Jake, please answer this simple question: How far back in the record do you have go to find your point of beginning in a title record search? 3. The next time you want copies of recorded documents just call your local title company?s Customer Service Dept. and they fax them to you FREE. 4. I don?t know how the Assessor?s office gave you figures on back property taxes. Here in San Diego County you have to contact the Tax Collector?s office. 5. Just looking at the target property is not good enough. Look at the sold comparables too and make sure they support your assumption of value of the target property. 6. Whoa! You feel the property is worth $275,000 retail. And from that you?re subtracting only $20,000 in costs (taxes and rehab). What about sales costs of about $30,000?? That breaks down to 6% for sales commissions, 2% for transactional expenses, and 3% for assistance towards Buyer?s costs? The most pressing skill you need is to learn how to research the title record of a property at your local recorder?s office. The next skill would be to get a tad better with you purchase computation. For example you don?t mention a specific figure you won?t go beyond in bidding for this property. You need to have that firmly in mind before you start bidding or you will have a tendency to bid way beyond a reasonable stopping point. Hope this helps. Follow Ups: Re: Here are some additional points to consider. Jake 11:45 PM, 12/19/01 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : Ok... I am sure I am going to begin to frustrate some folks but here goes. : : 1. I identified a property that appears to have a reasonable amount of equity to flip. approx 50K. : : 2. I identified a first (200K) and a second (30K) trust deed. : : 3. I went to the courthouse direct website, and got copies of both trust deeds, and the trustee sale notice. Everything appears kosher, no partnerships, or other parties mentioned as part owners. : : 4. I went to the LA County assessors website and confirmed back taxes of 10K. : : 5. I have viewed the property. : : 6. So if things go well at auction, assuming this goes to auction, I get the property for a bit over 200K, pay off the taxes, do approx 10K worth of rehab, the second falls away, and sell for somewhere around 275K. : : Question: What am I missing? Is there more to this? I guess there could be a lot of competition at auction, which could eat up all margin for profit. But besides that... should I be doing something else? Should I rely on docs from an online title/lien research company? : : Any insight would be appreciated! : : Thanks, : : Jake : =?=?=?=?=?=?=?=?=?=?= : Jake, : 1. You don?t say anything about how you determined the current fair market value of the subject property. Was it sold comps? An appraisal? Did you drive the comps and match them to the subject property? : 2. How do you know they are 1st and 2nd trust deeds without assuming so? They certainly aren?t marked as to their priority so how did you make the determination, just guessing? : How far back did you go and how far forward in time did you come? By the way did you check both trust deeds to see that both were signed by all of the owners of the property at that time? : Jake, please answer this simple question: How far back in the record do you have go to find your point of beginning in a title record search? : 3. The next time you want copies of recorded documents just call your local title company?s Customer Service Dept. and they fax them to you FREE. : 4. I don?t know how the Assessor?s office gave you figures on back property taxes. Here in San Diego County you have to contact the Tax Collector?s office. : 5. Just looking at the target property is not good enough. Look at the sold comparables too and make sure they support your assumption of value of the target property. : 6. Whoa! You feel the property is worth $275,000 retail. And from that you?re subtracting only $20,000 in costs (taxes and rehab). What about sales costs of about $30,000?? That breaks down to 6% for sales commissions, 2% for transactional expenses, and 3% for assistance towards Buyer?s costs? : The most pressing skill you need is to learn how to research the title record of a property at your local recorder?s office. The next skill would be to get a tad better with you purchase computation. For example you don?t mention a specific figure you won?t go beyond in bidding for this property. You need to have that firmly in mind before you start bidding or you will have a tendency to bid way beyond a reasonable stopping point. : : Hope this helps. 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