House Now On The Market

Last time, I mentioned the property behind hard money loan #15 was about two weeks away from going on the market. I'm pleased to say it is now on the market! Below are some photos.

This is a bit interesting. The house isn't fully staged, just a few pieces of artwork on the walls and some plants. But I still think it makes the property show better than being completely empty.

The property is listed for $400,000. My partner's wife is the owner of this one and she bought it for around $299,000. When it was bought, our estimates of comps ranged from $375,000 (computer generated) to $400,000 (opinions of two real estate professionals who have lived in the area most of their lives). Our mortgage is for $220,000 or 74% LTV based on the purchase price. With the holidays approaching, I don't expect any movement on this until after the first of the year, but who knows.

Rolling Along

Nothing much new has been happening on the investment property front. My hard money loans are being paid on time. Operations at the Houston apartment complex were essentially unchanged for September (the last month I have data for) from August. As I mentioned after the last investor conference call, the property is currently losing money, but things are slowly turning around. Management expects a return to profitability in early 2011 and a resumption of investor payments at that time. I think some of the other investors are getting impatient for distributions to start again - management sent out a notice today reiterating what they said in the yearly conference call. I guess many of the investors were not on that call so didn't know the situation.

The property behind hard money loan #15 will be ready to be listed in about 2 weeks. Back when our borrower first got the property at a foreclosure auction, it was still inhabited by the prior owners and their brood - a total of 8 adults, 2 kids, and 3 dogs. The prior owner wanted $6,000 and 1.5 months to move out. We offered $1,500 and 4 weeks. He came back and asked for $3,000. We told him no way. He threatened to take all the windows when he left. I've now found out that we did have to hire an attorney to file a suit to get him out, but as soon as he was served, he moved out without damaging the property. It cost $900 for the attorney, so we saved $600 over what we had offered him and he got nothing from us.

The property for hard money loan #14 is still on the market. It went up for sale in mid-August for $499,000. Our borrower has dropped the price now to $475,000. If I was the seller, I'd drop the price more to sell it quickly, but as long as the borrower keeps paying, let him list it for whatever he wants :-) Even with the price reduction, he's got close to a $100,000 profit waiting for him when it sells.

I don't know the current status of the property behind hard money loan #13, but I received another payment on the loan yesterday, so it's current.

Now this takes some guts (or lack of brains)

This guy is letting his house go into foreclosure because his bank erroneously charged him a $25 fee and refused to refund it. If he can buy his house back at auction for less than what he owes, he'll come out ahead.

Not sure if he fully understands what he's doing though. He seems to think that at the foreclosure, it will automatically become owned by the bank and then he can buy it back as a REO property. Does he not realize that when it is at auction, anyone can buy it? It only becomes an REO if no one buys it at auction. And if he intends to buy it himself at auction, does he realize that when you buy a house at auction, you need to pay for it in full?

eBook Price Reduction!

I've lowered the price of my eBook, A Flipper's Diary! The original price was $29.98. Get it now for only $12.95 - that's a savings over over 55%!

GMAC Finance Halting Foreclosures **Updated*

If you are a foreclosure investor, you might want to start paying attention to what company is doing the foreclosure on any property you are interested in. We've all seen the reports about mortgage companies foreclosing on the wrong property. Apparently, this is something of an epidemic at GMAC Mortgage, as they told their employees yesterday to immediately halt all foreclosure proceedings in 23 states. They are also halting the sales of all properties they have already foreclosed on and extending the closing date by 30 days. They are allowing buyers already under contract to cancel and get their deposit back, should they want.

Update: Another story says the reason for the freeze by GMAC is that GMAC employees signed about 10,000 "affidavits and other foreclosure documents a month without verifying their accuracy." The Florida Attorney General is investigating the filing of fraudulent documents to the courts.