Building My Rental Empire – The Truth About Foreclosures – Part III

The Offers
Two offers were submitted on properties last week.  The first one, a very nice home with minor cosmetic flaws, came back effectively about $3k less than asking price (they had just reduced the price by $3k the day before so effectively they were saying…"pay the asking price chump".)  We were told there were some pending offers or something at much higher prices than our offer…so keep it. Good luck.  This is a numbers game.

The second property, the one I believe is the better value of the two, countered and we’ve countered back.  I have indicated that I’ve made my final offer and it’s about 20% off of retail.  Maybe a tick better than that but "market price" is tough to say these days.  I’m basing my numbers on current "for sale" comps and sold comps over the last 6 months.

Prices here in Des Moines have stayed very steady even with 4x the inventory on the market.  It seems though that banks are STILL not willing to move properties and are playing the waiting game.  If they don’t wise up soon, I think they’ll be sitting on an ever increasing inventory over the winter.  Perhaps January will be a better time.

Still looking at more properties and a few duplexes are in the works.  From a pure cash flow perspective, duplexes are looking good.  I’m generally averse to multi-family simply because of my own perception. 

Another great observation that I’m loving is that more and more people are complaining about being a landlord.  The "one bad tenant" that made them become flippers, etc. is what I’m hearing more and more.  I love that actually.  If I spend the time buying right…and renting right..I will do what others don’t like.  That’s usually the profit move right?  Do what others dislike.    



2 thoughts on “Building My Rental Empire – The Truth About Foreclosures – Part III”

  1. I agree Doug. If you enjoy being a landlord and others do not, there is a profit opportunity in that. Anytime you are willing to do what someone else would rather not do, a healthy business may be the result. Just ask the guy who runs a business cleaning dog poop out of his clients back yards!
    Good luck finding the right properties. It may take time but, like a marriage, waiting for the right one is worth it.

  2. Doug,
    I’m dealing with some similar issues right now. I’ve actually been advised to wait as long as next summer before the banks really start letting their guard down. I love being a landlord even when I have to deal with problems…if you play the numbers right!
    Let’s get together and talk more about it this week if you’re in town!

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