Did you know that we look at every single transaction as an investor would? That is one of the most important ways in which to view real estate. Looking at future values and potential “rentability” of those homes which our sellers are considering selling.
On the real estate buyer side, what will this property be worth in two years? Is there anything which should be concerning to the home buyer creating future functional obsolescence or other issues? Yup – We do real estate as if we are the ones flipping the bill.
This entire real estate and HousingRadio.com show were transcribed – listen for the most accurate rendering of the show. Computers are good, but sometimes not 🙂
Here is the transcription of our Real Estate radio show:
Housing Radio: 00:00 An investment series that we’ve put together giving you a glimpse of some of the ways that people try to do this and how to watch out for yourselves. Good everybody on Connor MacIvor Remax is Paris 9 1 1 team local agent headquartered in Santa Clarita Valley with a great wonderful fantastic fantabulous team in place to assist you with all your real estate needs under the Remax corporate. And we’re here in Santa Clarita Valley serving Greater Los Angeles cities and beyond housingradio.com is how you access our systems and you can do all sorts of things.
Connor MacIvor: 00:33 First and foremost probably one of the most important things you can do. It’s going to come down to searching for real estate looking for those houses that are for sale. Now if you’re not investing and you’re doing your regular real estate let’s say you’re trying to buy something to live in. You could also look at that as an investment property. That’s important if you’re looking for somebody to rent and hold. That’s also being an investor if you’re looking for something to purchase rehab and flip. That’s also being an investor. Now a lot of ages are they talking with each other and there’s banter you know for people in the private sector people that are licensed have a little difficulty.
I think it’s a little bit more difficult for them because they have a particular intention and it has to be revealed that they’re licensed people that are in the private sector you’re not licensed so there’s nothing to reveal all you’re interested in is purchasing property property low and selling higher than you purchased it for creating some kind of a profit margin. Now depending on what your numbers are we see in some cases people like that 10 percent 15/20 percent profit margin and some of them break it down and the numbers actual money.
So they’re looking for $25000 to $35000 dollar profit margin per property after all is said and done that’s going to include the hunting of the property the commissions to be paid the rehabbing of the property the marketing of the property on the other end doing all those other items paying the commission and getting the property sold as long as they have twenty-five thousand dollars in their profit or more depending on the investor they’re going to be good enough it’s a group usually that number’s going to be higher. But it depends they can also make up for that in volume. Looking at real estate investing through a lot of people online and a lot of people these little seminars they put up there tell you how you can do it for zero down as far as conventional loans go that’s going to be difficult a difficult prospect just because those lenders out there aren’t allowing for zero percent down.
Housing Radio: 02:39 They are allowing for somewhere in the neighborhood above 20 percent down to have an investment property that includes those properties that you’re going to purchase that you’re going to rehab that you’re going to rent out as tenant occupied and then sell at the other end.
Connor MacIvor: 02:56 That also includes those properties that you’re going to purchase.
Housing Radio: 03:00 You’re going to rehab and then sell it immediately as soon as possible. So your money doesn’t continue to be tied up too long you walk away with a profit and you do it again. Those particular properties if you are somebody that’s looking to get your typical kind of a conventional loan then that’s where you’re going to be. Now if you happen to have equity somewhere in some piece of real estate Ciardi on you might be able to pull that equity and use that money in order to have that 20 percent down to flip these properties. So at the end of the day if it’s going to be done in a conventional normal investment type strategy if you don’t have access to cash and funds and other people to be a member of your team then typically you’re going to need that 20 percent down.
Housing Radio: 03:47 That’s going to be unless you have access to maybe a veterans loan there could be a way to work with that particular scenario. FHA they’re going to be looking for ownership. So that’s going to be difficult. Some banks if you happen to have big investment money with these banks like you have some kind of a PMA account you might be able to market account you might be able to borrow to purchase an investment problem I’d be able to borrow with less than 20 percent down stuff.
A lot of these people that are on television just be wary because they’re talking about different markets that Southern California is still going up in price. It’s a very fast-paced market besides what you may hear a lot of people still are moving to California. We see it by the relocation systems that we run online. We see a lot of people doing those inquiries and wanted to know what’s going on investing in real estate. Be wary. You’ve got to make sure the numbers match. The other thing that people talk about are auctions and they also talk about tax liens sales for a tax sale take place typically and it’s going to depend on the county.
Housing Radio: 04:57 But the foreclosure usually takes the tax lien sale usually takes two to three maybe even longer four years. That’s something to watch. But most of these properties have equity in them so that ownership isn’t going to allow the taxes to lapse.
Connor MacIvor: 05:14 Now there’s a lender on that property if it’s not owned Free and clear then that lender is going to be the one that monitors and will pay those taxes if the person to borrow the money originally to make that mortgage isn’t making it any longer. So there are fail safes built in. So it’s not the original owner of the property it’s going to be the bank. If the property is owned free and clear usually it’s going to be somebody in the family member or that original person that bought the property the one that owns it currently that’s going to keep up with those taxes.
Housing Radio: 05:46 It’s very rare credibly rare that a property at least in Southern California hits a tax liens sale that’s completely paid off. So if they’re telling you that’s the type of property look for look for it but there are a lot of entities out there looking for those properties as well.
Housing Radio: 06:03 And again they do not come up very often if at all in Southern California they might say well you know I heard Conner that the auction is a great great place to go. Maybe yes maybe no. It’s going to depend on who’s at the auction on that day. I remember going to a couple in Pomona and that also in Norwalk and it had a couple of days that I went there out it sticks out like a very vivid memory there were people there that were just like in pawn wars you know they go to the pawn wars they go to the storage war storage wars. So they go to these places and they then bid on the storage unit. You’ve seen this on television.
Well, it was the same kind of thing where you had a lot of people bidding on these properties that hadn’t done any research and in order to bid at a property at an auction you want to find out who is in that property if at all. What kind of shape that property is in and what it’s going to cost you to get these people out if there happens to be somebody that lives in there even if it’s the owner because there if they’re not going to leave on their own folks there’s going to have to be attorneys and the court involved in that eviction process. You can’t just go and say hey I’m kind of MacGyver the new owner of this property I just bought it here’s here’s the property that I own you have to get out.
They could say sorry Connor we’re not going anywhere. Good luck. And then I would have to go and hire a legal team and we have connections with these if you need one of you know we would have to hire the legal team to evict the people in the home. And that could take six months. So I have to factor in that number six months of not being able to recoup any loss on the property. I would have to keep tabs on that of what it would cost. Then the other thing I would what I need to factor in. Are they going to damage that house on the way out? What kind of issues is going on in the home? If they’re not paying their mortgage anymore and they allow that loan to lapse into default go to foreclosure and that property did sell at auction.
What other interior issues have they created or are they neglecting. These are things to consider in addition to that if you are purchasing properties at auction are these particular properties are there any liens on them mechanics liens for example. Somebody comes to my house and does work in my garage. I say I’m not going to pay them. The next thing that they typically would do is go down to the county and they would file a lien on my home for me not paying them. Now I can do anything with this property. I can’t sell it because that lien will be found out and that’s mine. So title insurance will protect the next buyer. However in the case of an auction property you want to check the title and make sure there aren’t any liens such as I spoke about or any others tax liens.
Connor MacIvor: 08:55 Also from the government for people for people failing to pay their taxes maybe those folks in that property are in the same situation that they’re not paying their taxes anymore or the government. So the state of California or federal government or wherever the state is they’re going to come in and they’re going to put a lien on that real property and that’s something else that needs to be taken care of. So you need to look at all of these things before wanting to run out there and start to invest in real estate. Now there are ways to do it again. Winds to be had. I would also suggest that anybody looking to buy even a first-time buyer look at buying real estate as it being an investment for a long-term if you’re going to be purchasing residential real estate you’re going to be moving in.
Speaker 4: 09:40 Look at this property as if it’s going to be something is going to be held on for quite a while. Add onto that in that way you’re going to be a little bit more frugal about your purchase and you’re going to take a little bit more time. I think that’s very valuable. I’m kind of MacGyver. This is housing radio dot com a little bit of an investment update as far as Santa Clarita real estate goes we’ve been watching that market folk and it isn’t great.
We have lacked real estate inventory per SCVnest.com – I’ll show you that information now. And if you look at here in all of Southern California everything for sale 11000 506 active in Santa Clarita Valley. Within the residential listing, only 356 homes condos townhomes all total for sale and that’s not very many. That’s going to include everything from actin awkward I’ll say Canyon country can stay Newhall Saugus Stevensons ranch Valencia 356. If you’re seeing more than that you’re being played.
That’s why we always direct everybody to go to housing radio dot com just to make sure that you’re seeing the real inventory and are being gamed out there by some of the real estate syndication websites that want to steal. Well they want to take your personal information and sell it to agents willing to pay for it. Ivor thank you for tuning in. Very much. It’s always a pleasure.
Reach out to me when you’re ready I mean how’s a radio that can’t tell a friend. We’ll talk to you soon. Connor MacIvor over and out.