Real Homes of Genius

One of the blogs I frequent is Dr Housing Bubble in LA County.  (http://www.doctorhousingbubble.com/  ).  Great commentary on the state of So Cal real estate.  Besides his personal pet-peeve for garbage cans and Realtor cars in listing photos on the MLS (which I share,) he regularly posts about "Real Homes of Genius".

A real home of genius is one where a bank and buyer broke all rules of sanity in overvaluing a property to the point of ridiculousness.  We've got one here in my area this week, and I think I"ll keep them coming.

Real Home of Genius - Santa Maria Style...

First,
The original sales info.  Purchased in 1/2003 for $320,000

Second, Purchased in 11/2005 for $450,000!!

Third, Notice of Default, Notice of Trustee Sale 4/22/2009

Fourth, Trustee Sale on 1/14/2010

Finally, onto the market in 5/23/2010 for $165,500 and reduced on 6/17/2010

Here's the video I shot this morning. A true gem.



Enjoy!
Taylor

Bank Repairs Property Without Asking!

I know it sounds crazy.  I didn't believe it myself when it happened, but I have video to prove it.  Check it out.



Here's the backstory.

I have a client that made an all-cash, as-is offer on a bank-owned (REO) condo.  It was in pretty good shape and she loved the unit so she offered close to retail.  In fact, all the unit needed was carpet, paint and install some hand-rails and it would be good to go.

Offer was accepted in a day and we moved into escrow.

Yesterday, the listing agent called me in a huff because there were contractors in the condo tearing out carpet and it looked like a painter had already come and gone....

I called my client and she didn't know a thing about it.  No answers...

Until later that afternoon when the listing agent called me to apologize.  The bank had hired and scheduled to have the contractors paint and carpet the unit and didn't let the agent know.  (weird.)

So, my client gets carpet and paint.  On an AS-IS bank REO.  Gratis.

Gotta love these banks... Never the same thing twice.

Cheers,
Taylor

You're Nobody 'til Somebody Loves You

I made it on a list!

Best Blogs on Real Estate ranked my blog as on of the top 50 real estate blogs!  

Very Cool.  

Thanks everybody!  

(Click link below to check out the list.)

Cheers,

Taylor

Been Gone So Long

Missed you guys.

I started this blog as an effort to share my experiences as I grew my real estate investing business. However, things didn't really go as I had hoped.

After some initial success in early '08 in Virginia Beach/Tidewater, we sold (lease option that went south and ended up as a short-sale) our Virginia Beach house and moved home to CA.

Turns out that I couldn't have picked a worse time to move and try the wholesaling method of the real estate business in California. The whole financial world was on a tilt after the collapse of Lehman and the 300+ lenders that melted down in 2008-09 and I was trying to wholesale properties in a free-falling market. It sucked. I won't even tell you about how bad, just trust me. It sucked.

After just one successful wholesale flip in March of 2009, and after encouragement of my lovely bride, I decided to get my license and continue moving forward in real estate as an agent/Realtor rather than return to my previous career in the insurance industry.

I got my CA real estate salesperson license Aug 2nd, 2009 and continued to try and manage my 'investor' leads as well as build a clientele as an agent. I ended up getting many of my initial listings from those leads, but as the market has continued to slide downward, getting 65 cents on the dollar minus repairs to use as a wholesale deal became more and more unlikely. I shut down 11 Day Sale on 12/31/10 and have focused all my efforts on building a career in real estate as a Realtor.

Since I was no longer attempting to be an investor/wholesaler, it didn't seem that I had much to write about on the blog. But as time has gone along, I have come to realize how much I have learned about investing in real estate, and about my market and there are a lot of things that I would have liked to share, but didn't because they weren't 'investor' topics. Plus, writing is good therapy, it's free and I like it.

But, like I said, I missed you guys. So I've decided to change the content of the blog and keep writing about the crazy stuff that happens to me as I wander along on this new career path.

Sound good to you?

Nice to be back.

Taylor

Tommy and the Christmas Train House

Cool story.

I got a call just before Thanksgiving from a seller who's father in law's (88yrs) (Mr 88) health was to the point that he couldn't live alone in the house and the family was looking for options and responded to my mailer. The son in law actually said that it was uncanny that the mailer came when it did as they had just talked about selling the house the day before.

My son Tommy and I went to the appointment together and after a side-trip to McDonalds for a happy meal and toy, we showed up right on time.

The nurse/caretaker took to Tommy right away and asked if she could play with him with the toy train around the tree while I toured the house. So after shaking hands with the owner, I headed off on the tour with the son in law.

About half way through the tour, the caretaker called out for the son in law to come quickly and he hustled off to help her. I was just behind him and saw that Mr 88 had slumped back into the couch and was extremely pale. She was dialing 911 when I grabbed Tommy and turned off the train controller. The son in law escorted me to the door and said that Mr 88 didn't have much time left. We chatted for a bit on the porch and I took Tommy to the car.

We could hear the siren of the ambulance as we got into the car and passed them as they came up the hill as we drove away.

As I drove away, I realized that I was the last person to shake hands with Mr 88 in this life. Kind of weird. It still seems a little surreal for me. I was a little shaken up by it. And, since I was out of the room, I hoped that Tommy hadn't gotten in the way or made any troubles.

I have been watching the paper for the last couple of days and the Obituary came out in the paper today so I called the son in law to offer condolences.

He told me the rest of the story.

Mr 88 was a bit senile and it turned out to be a bit of a Godsend that I had Tommy with me when we came to the house. See, his son had died in Viet Nam and Mr 88 was prone to having visions of his son and deceased wife.

It turned out that while I was touring the house, Mr 88 was watching Tommy and the nurse play with the Christmas train. Mr 88 was clapping and hollering for him to make it go faster! faster! and having a great time. His vision was of his son and wife playing with the train around the Christmas tree (Tommy and the nurse). He was laughing and having a good time. The nurse was watching him closely and said that he was smiling as he sat back into the couch. He sat back, sighed, got a tear in his eye and then was gone. Just like that. Total heart failure.

I got teary as the son in law told me the story. It's uncanny how things work out sometimes. I felt that it was the right thing to do, bringing Tommy to work with me that Friday. It just seemed correct. I am glad I listened to that little voice inside because it is good that my little guy could make an old man's last few minutes on the planet a little better, a little happier and a little less lonely, and I feel great about that.

Happy holidays everybody.

This life is short & we only go around once, so let's enjoy each other while we're all here.

-Taylor

Back in the Saddle

You'll remember that a year ago I put on my first CA open bid sale.

And, while it didn't go as planned (plan being that i make another sweet 5 figure paycheck,) we were able to secure a buyer for the property and I eventually got some $$ (4 figure paycheck) for my efforts.

Still a big fan of the open bid sale concept.

Another year gone and as it turns out, exactly 1 year to the weekend from my last open bid sale...

http://www.postlets.com/res/2989512

It's a nice little condo/townhome in Grover Beach with views of the Pismo Beach hills and some nice amenities.

As another little reminder of how much things can change in a year, I'm licensed and running this open bid sale as an agent! No chance of 5 fig paycheck this time, however... I am hoping to make up in volume for what each potential sale lacks in potential profit compared to an investor deal.

Lots and lots and lots going on in my little real estate world right now.

• I've started a consulting project for a company that works with real estate investors as a success advisor, which allows me to spend more time at home and less weekend nights working at the restaurant (which is nice.)

• Plus, I have two buyers in escrow and the condo listing. Not bad.

• I just finished a submission for a free quarterly newspaper that will be mailed out to every household in town in about 3 weeks. Should be a nice little promo piece.

• I partnered with one of my investment property buyers in Virginia Beach (she bought Jeanne St in VB. Remember that one from May 08?), and we are going to update and re-vamp 11daysale.com and 11daysale.net. She'll help build the site and we'll both submit 'free special reports' and videos. And, if leads come in from different areas in the country, I'll be able to use my connections from my RE consulting gig to get them taken care of and hopefully make a little referral $$.

California fall weather is just spectacular and we are LOVING it here. Thanks to my wife's family for support on that one. I will say that it is truly refreshing to have your in-laws be your biggest fan/support. Not everybody can say that.

I hope to post more often, but as you can imagine, my days are full and I love being busy.

Pray for a quick sale and 2 quick escrows!

More next week.

All the best,
Taylor

Buying REO's - Market for the Insane

First off, thanks to TampaSteph and also Shae for the following video.

Are you thinking about getting into the REO market? Maybe you don't like dealing directly with homeowners and think that it would be much easier to buy directly from banks?

It isn't my favorite method of doing real estate, and the following video has a familiar ring to it if you've ever dealt with a bank 0wned or short-sale property.
http://www.youtube.com/watch?v=SM7oWKgCVo4&feature=player_embedded

Enjoy & good luck with your own REO adventures...

Blog Post #100! Hawaii in 2009

I've got a lot of things going in real estate land, but first,

Thanks to everyone that made my most recent trip to Hawaii possible!
My brother got married Saturday and his bride is from Japan, so the most convenient place for everyone to meet was... Hawaii!! So we took the kids out of school for 4 days and flew to Oahu.







4 Days in Oahu/Waikiki for sun, sand, surf and crowds.














I took my oldest son (13) surfing at Canoes/Waikiki (which, incidentally was the same place I learned how to surf @ age 14.) It was a very rewarding experience

North Shore on Friday and the quality of surfing literally blew my mind. In fact, the sheer number of great surf spots and corresponding high quality surfing re-adjusted my surf quality meter. Here's my surf confession: I'm a chump and my spots here in CA are crap. I admit it. Hawaii kicks serious surf booty.
Beautiful sunsets,













Awesome views,













And Delicious Food. (We ate the whole thing already?!)

Sales Mastery Resource: Option ARM Reset Schedule Update

I subscribe to Clusterstock.com and their 'chart of the day. I've been sharing a similar chart with sellers from Deutsch Bank that shows a wave of resets hitting in 09-11. Looks like banks have updated their plans and extended the pain out for a few more years...

Here's what Clusterstock says of their chart:

CHART OF THE DAY: The Option ARM Armageddon

John Carney and Kamelia Angelova|Sep. 21, 2009, 6:04 PM |

Tags: Chart Of The Day, Mortgages

"The Option Arm Armageddon was supposed to strike in the spring of 2009. Across the country, option adjustable-rate mortgages (ARMs) were set to detonate and start a new wave of foreclosures.

But it never happened. We made it well past when this chart from Credit Suisse showed the option ARMs were supposed to begin to hit. And the crisis didn't come.

Why not? Well, when interest rates dropped to historically low levels as the Fed fought the financial crisis, the wave of resets was held off. Unfortunately, low interest rates won't last forever -- they'll now likely strike next year and continue well into 2011. Many borrowers who now have the option of making payments so low that they don't even cover the interest are seeing their original loan balance grow, even as their home values continue to fall or remain flat.

The chart below shows that the option ARM reset problem is comparable to the subprime problem, and will likely last for quite some time. Armageddon may have been forestalled but it hasn't been overcome."

So what does this have to do with Sales Mastery? Well, one of our main tenets is: Foreclosures up=Inventory up=Prices DOWN.

Sellers need to know this info so they can plan what the best move is for them. Sitting tight? Better have a comfy seat... This looks like the best time to sell for the next few years...

Subscribe to the Chart of the Day.

Cheers,

Taylor

Resiliance

Funny story.

You know I work as a waiter at a local italian restaurant a few nights a week to keep cash coming in (and also pick up a few real estate leads...)

Last night was excruciatingly slow so I was excited when a table of 9 got sat in my section. I was out on the patio so any night mid-week is a total crap shoot when it comes to getting tables.

I got a drink order and loaded up the largest cocktail tray we had with 3 cokes, 2 iced teas, 2 pints and a lemonade. I didn't have room for the raspberry martini so i decided to hand-carry it with my right hand and deliver that drink first when I got to the table.

I approached the table and went to set down his raspberry-tini, saying, "here's your raspberry-tini sir..."

He says to me, "no, I ordered raspberry tea."

Whoops. No big deal. In fact, I had an extra tea on my tray so that would work out fine. (Internal dialogue: now what to do with this drink in my hand so I can unload this heavy tray of drinks?)

So I stopped setting down his drink and stood back up, moving my right hand slowly so as to not spill the fruity martini. All my focus was on the martini. I was rolling through the possible temporary resting sites for the drink so I could unload the tray in my left hand.

At this point, my left arm (unbeknown to me) was reaching its limit with the super-loaded tray and made just a slight twitch. First drink to go was one of the 3 cokes. It rolled off the tray and I laser-tracked it with my eyes and caught it between my knees as it fell. Amazingly... Whew!

Martini? check
Glass between the knees? check
Tray on left? . . .

It was all super-slow-motion from here on, but as I stood next to my table of 9, in the doorway by the bar, I and the rest of the people on the patio and those within sight-line from the bar, watched as one by one, the drinks toppled off my tray and into my lap. (remember, i'm squatting, ever-so-slightly due to the drink between my knees...)

Seriously, I'm standing with a cocktail in my right hand and a soda glass between my knees. What the heck could I do at this point? NADA...

As I watched the beers begin to topple, I reflexively made a "cover the ball" motion to keep my patrons from getting soaked and collapsed the entire tray into my body.

Only 2 glasses broke! And, I still had a full martini in my right hand as everything came to a stop.

Soaked to the bone, and embarrassed as I could be, I smiled and curtsey'd to the clapping guys in the bar, and started cleaning up broken glass.

My shoes were squishing with beer and soda all night.

And to top it all off, the table shorted the payment on their bill and I had to use the gratuity to pay the remaining bill! I made $6.37 on the table.

Smile and move on... Prove how resiliant you can be.

:)
Taylor

Seller Motivation Theory 1.0

The real challenge these days is seller motivation. I'm developing a theory and watching the market and am getting more firm on my idea, but here's what I have so far...

Seller Motivation Theory ver 1.0
In every market you have a range of motivation. Try to draw a mental picture with it as a pendulum where the far left represents very low motivation to sell and the far right represents virtual desperation to sell. The left half of the pendulum are those with internal motivation to sell. As the pendulum swings up to the right, external motivators come into play (foreclosure, job change/transfer etc...) and add to the motivation level.

As investors, especially in the recent past, merely talking to motivated sellers was the key to success.

The Success Equation went like this:

• Get your mailer/postcard/letter/advertising/yard sign in front of enough motivated people and you were bound to buy/wholesale/flip some houses.
  
• And assuming you could estimate repairs with moderate accuracy and perform basic math in the MAO* (*MAO= Maximum Allowable Offer. MAO=(After Repaired Value x 65%)-repairs-profit) calculation, you would make money.

Late night infomercials and internet real estate gurus sold (and continue to sell) the idea of making money this way.

But... remember that as investors, we need EQUITY to be able to get involved and make money. So, with the relatively quick run-up of home prices from 2001-2006, the moderate-strongly motivated real estate owners had equity to spare and due to their motivating circumstances, were willing to part with a portion of that equity for a quick sale and all the other benefits that we, as investors, could provide.

The true challenge in a declining market is to take those folks on the left half of the motivation pendulum, those with less urgency/motivation, but who have equity and get past the financial motivation to the real reason for selling. It takes time and some real finesse to pull off these types of deals (I've learned this the hard way...)

Downward moving markets strip equity out of many motivated seller deals and traditional investor strategies quickly become out-dated (since most investor pricing models require at least 35% equity to even get started...). Leaving Short-sales, REO's and high equity deals as the remaining ways to make any money as an investor.

But that's another post all together.

Nice to have you stop by. I've missed posting my happenings. Lots of things going on, I'll have to post again this week and we'll get caught up then...

Cheers,
Taylor

A Birthday Gift for My Bride

My lovely bride's birthday is this week. (Happy birthday honey!) The top thing on her birthday list is for yours truly to get his Real Estate License so we can get on with making some money already!

I log on to the DRE website every day to check my license status...

Nothing.

So, with a little coaxing via phone this morning, I was able to get someone to pull my file and see that everything they needed was in the file, fingerprints done, fees paid, test passed, proof of citizenship, yadda, yadda, yadda... and that in fact they were ready to issue the license. Her words were "it should post today prior to 5pm mr Taylor."

As of 2pm... no license.
As of 3pm... no license.
As of 4:09pm... bing!












Happy birthday baby, we're back in business.

More tomorrow!
-Taylor

Hey Bro, Where You Been?

Workin' man, workin'...

Holy Crap it takes the state of CA a long time to process paperwork! I finished my pre-licensing classes in record time (2 weeks ahead of schedule) and submitted my paperwork the week of May 16th and didn't hear from the Dept of Real Estate for over 5 weeks! I got the go-ahead (login/password) to schedule my agent exam a few days ago and I am all set to take the exam this Thursday (July 1) in LA. Wish me luck!

In addition to studying real estate and waiting tables, I have spent time organizing my leads and sending out follow up notes to everyone. The phone is ringing and I should have some seller appointments next week. Nice...

Once I get this exam out of the way I am set up to work as an agent for a local RE broker and will be calling my seller leads to test for motivation to sell either to me as an investor or with me as a realtor. I am getting tired of not making $$ and need to get my life moving forward again. We've learned a lot in the last year, but that's a topic for another post.

Keep me in mind on Thursday!
Cheers!
-Taylor

100M here... 100M there... Soon You're Talking Real Money

Unreal.

I thought $100M was a lot of money. Watch this and learn...





Oh, and just for good measure, check this out. (big shout out to my family in Richmond VA!)


174mph, but what's the MPG of the vehicle? Environmentalists want to know...

On the real estate front, I've been doing lots of substitute teaching and waiting tables and studying like a maniac for the CA real estate exam. Just waiting for the state to approve my application and give me a test date.

More follow up calls this week.

Enjoy Memorial Day! Thanks to all the soldiers out there! I am enjoying my freedom thanks to you!

-Taylor

I'm not this crazy, but it's still amazing stuff.

wingsuit base jumping from Ali on Vimeo.

More real estate to come.

-Taylor

Strategy Adjustments

Well, I just rolled past the one year point as a corporation. Which is good. What a crazy year it has been too. Things really seemed to be trucking along there in June/July last year, then slowed down as 08 came to a close.

With the changes in the market, I have been forced to take a hard look at what is working and what is not working.

Based on the last deals I have done, PROBATE is working... There is equity AND motivation (which are the key elements in this investing game.)

While Free and Clear/High equity mailers get lots of calls, the appointments haven't been as frequent and the resulting deals have been non-existant in the last 6 months.


Absentee owners/landlord mailers also generate lots of calls, but in this crazy market, there is just too big of a gap from where I need to be and the lowest they will take. I can't justify the expense when I'm not sure I'll be able to convert the calls to cash $$$...

So...

1. I'm putting the mass mailers on hold. Going back to the old-school. Probate mail and knocking doors...

2. Continuing my Probate method of gathering info at the courthouse each month, mailing a nice letter and now, (2b.) adding a follow up component by designing an executor follow up post card.

3. Door knocking motivated lists. I have a researcher knocking expired listings for me right now and am going to have him add probates to the list. We knocked 7 doors the other night (expired listings) and bumped into a probate executor and I was able to schedule an appointment for the following week. Quick results and little cash outlay. (gas money.)

4. Get licensed. I have heard/read many conflicting opinions about whether or not to get my RE license, but I was successful finding buyers for that property that went into short-sale and have so many potential listings and short sale leads, I can no longer keep giving the business away as referrals to my agent. I need the income and love the thought of keeping myself in the RE game during this market downturn.

We're making the same changes in Virginia as well, with emphasis on follow up with current leads and continuing to mail probates.

It's baby steps at this point, returning to the things that originally brought in dollars for the dollars spent and on making money through the market change so that when the shift comes I can be ready to jump and make cash again.

Keep watching.

-Taylor

Buy at the Peak, Sell on the Way Down...

I'm making follow up calls (18 so far) this evening and just had a nutty call that I had to get online.

Here's the stats:
She bought for $397,500 in 12/05. Which was about 4 months prior to the peak of the biggest peak in american housing. Full retail at the peak of all peaks.

She has rec'd my mailer once every 3 months and called to see if she could get out of her house with a little profit.
Wouldn't tell me what she thought it was worth. (I had 3 websites open looking at current value...)
Wouldn't tell me what she owed.(can pull all that from county records in about 5 mins.)
Didn't want to meet. (I can't help those that don't want help.)

So, in the end I told her that Zillow.com and Realquest.com both showed a value for her place at $297 in today's market, would that number be in the ballpark?

Heavens no. I wouldn't sell for a penny less than $450k.

Hope you have a couple decades to wait my dear.

It's gonna be a while.

Here's the foreclosures around her house.


Ok, thanks. I feel much better now.

Back to the phone...
-Taylor

More Core Identity Thoughts

I've had 2 meetings with sellers this week that have been frustrating to me.

• Both were single women with houses they needed to sell.
  
• They needed to sell for as much as possible, as fast as possible.
• In the end they individually gave me the same 'i want to think about it because you're numbers are too low' as a reason to leave the meeting without a contract or a return appointment.

• One has listed with a realtor and I expect the one from today to list with a realtor

It is super frustrating for me (ergo another 1am blog post) because I know that what I have represents the best possible chance for these sellers to get what they want/need, which is a. quick sale, b. Cash c. Cash that meets or exceeds what they would likely net from a retail sale.

But something must be missing. I may be too logical in my presentation/meeting with them. Maybe I don't build enough rapport, find out what their hot buttons are, paint them in to their pleasurable future...

I have mentioned Frank Kern before, but I don't think I've linked any of his video to my blog. Check it out. It is an interesting premise to approach business/sales from such a 'touchy-feely' kind of place, but it resonates with me and my best meetings have followed a similar path.

Enjoy and tell me what you think...
-Taylor


this guy was cool too. Absolute Congruence.

Oh NO! The Obamanator attacks!

By RICHARD ROHL, Published: March 31, 2009

"WASHINGTON -- At the protest of "vulture" investors,

President Obama will sign legislation tomorrow reversing all

private transfers of property by homeowners in default.

This provision of the "Community Risk Abatement Plan," a

recent addition to the stimulus package in consideration. It

will require the owners of all property acquired in the last

two years from sellers where were behind on mortgage or

tax payments to be returned to the previous owners within

121 days."

Good thing for me that I don't deal in foreclosures.

-Taylor

I love surfing.

I really love it. Once this little business gets going I'm going to surf more. And stand-up-paddle surfing? I'm sooo going to get one of these boards. It can be completely flat and you're having a good time. Plus, my 12 year old (who has never wanted to surf) wants to get out there with me on one, so it's got to be cool right?

Enjoy-
Taylor


Find more videos like this on Stand Up Paddle Surfing