Sunday, February 20, 2011

203k - The Sleeper


It will never cease to amaze me how few people have even heard of the FHA 203k loan program. It also makes me wonder how they have been in business so long and NOT known about it. Then you have those who know absolutely nothing about it and tell everyone else it is a bad thing... loll Yes, there are those out there that don't want anyone to do a 203k loan as they heard from someone years ago that had an issue. I guess if those same people ever had a fender bender they would never drive a car again. Of course not. But they will tell you in a heartbeat of a problem that they heard from someone about that was a disaster. When you pin them down quite often they can't provide any specifics as they really had no direct experience with one.

This is clearly a niche product but you can have a pleasant experience if you merely use an established team of professionals. Many people have asked me why with my background in real estate why I always list my properties with a Realtor... how can they be in the business and suggest I do otherwise. My wife and I have bought and sold over 300 properties and listed them all when it came time to sell them. Then you run into someone like ________, a very astute investor who is sitting on over a hundred homes. Why? I talked to him and found that he is willing to pay a commission on his houses, so why not then list them? I called on a lender in the area where he has many homes and the lender had over 100 qualified buyers and not homes. The lender said most of those buyers were brought to him by a couple of Realtors and he was just waiting for them to find them homes to purchase. I wouldn't wait. But he did and likely is still waiting. I just don't get it. I don't want to get it. There is no reason we can't put these people together for a common good. HELLO, anyone in there? Sometimes you wonder.

Investors, come to one of our upcoming seminars and bring your fixed up properties, we'll put you in touch with some real buyers and help you get them sold. I know of one investor who does list all his properties but wants you to come to his open houses and bring your buyers. I guess we all have our own ways of marketing the homes but we like to do it in the seminar room and write contracts when possible in that room. It really is a kick to see someone join the group and walk out with a new client or house to show, or a signed contractor "subject to" their seeing it. Our host Realtor gets all the leads from the event as new clients to show homes over the next few days but if you have a listing that needs some work bring it and you may be on the other side of that same transaction. We need your participation at these events so please give it some serious thought and if you have a buyer that can't find that "perfect house" then bring them as some of our investor friends bring homes that are already fixed up that aren't currently on the MLS... Whoa, you mean some houses aren't listed? Yes, I'm afraid so, but you can sell them and make a commission on them by writing into your contract. You know that.

Mixed use properties are abundant but when I talk about them I always hear people telling me that they aren't in our area, BS, they are too. They are all around you. I've done 203k mixed use building in SF, Oakland, Vallejo, and on and on. You just don't focus on them but they are larger sales with larger commissions. If you have a four residential property on the 2nd and 3rd floors of a building over two stores, you have a gold mine. You get to count the building SF, all of it for figuring the value but ignore the commercial aspects of it for the purposes of the appraisal. Maybe you have one like the one we did in SF that had eight residential units that we turned in to 4 units plus a grocery store below on the first level. A good one of these and you can be retired with it's income.