![\"Crush](\"http://www.flipthiswholesaler.net/wp-content/uploads/2012/02/FTREO-Banner1.png\")
Hi Guys and Gals!
How was your week? Everybody making lots of offers and lots of money?
All is well over here in Tampa, minus the fact that I haven’t seen the sun in about 4 days, and also, I’m FREEZING MY ASS OFF. I know many of you are buried under seven hundred feet of snow and are without electricity and you probably want to crawl through the computer and strangle me when I complain about it being fourty effing degrees here, but I can’t help it. THIS WEATHER BLOWS. It’s no accident that I live in the Sunshine State, so I feel entitled to complain.
Anywho, enough about the weather- let’s talk real estate, shall we?
I thought I was going to be writing a post today about a new REO deal that I just got under contract, but that ain’t happening, apparently. I’ve actually been negotiating with the bank on this particular deal since last week and thought it was in the bag. The house has been on the market on and off for over two years. Two. Years. Seriously. It’s currently listed for $25,000 and my initial offer was $12.2k. The house is a piece of crap located on Piece Of Crap Street, but I’ve got a buyer who happens to like this little area and he’s looking for something in the el cheapo price range, and this dump fits the bill…
So, anyway, I offered 12.2k, all cash, no contingencies, with a 3 day closing. The bank came down from $25k to 16k on their first counter, which was quite shocking, in a good way. Nine times out of ten when they come off their list price that much right out of the gate, they will come down more. So, I countered back at 13.5k last week and have been waiting and waiting for a response. I already ran the deal past my buyer, who said he would be interested at 20k-ish.
I finally got a call back from the agent yesterday letting me know that they got a full price offer and asking if I was interested in coming up any more. HAHAHAHAHA! Yeah, no thanks.
I figured it was a wholesaler who put it under contract, so I checked Craigslist a few hours later, and sure enough, the property was listed with a nice little 7k markup. There’s no way in hell anyone is going to pay that much for that property, so I expect to see it hit the market again in the next 3-10 days, depending on how long the inspection period is. I already let the agent know that I’m still interested, and I’ll be checking in with her every couple of days so she doesn’t forget…
Aside from that, I’ve got a few other deals I’m working on with my wholesaler buddies, but nothing under contract at the moment. I’ve also got a few out of state buyers that are looking for deals in Tampa, as well as some of my local buyers who have been calling me looking for houses.
And that’s about all I’ve got for now, folks. Gotta run- time to make the doughnuts. 
Have a great weekend, Everyone!
P.S.
Things are not going so well for Chef Steph. My Scallops Parmesan turned out disastrous and had to be thrown away. Seriously, it was that bad.
Ewwwww. I can barely look without gagging a little bit.
On February 12, 2010 at 9:09am, Brandon said...
Sorry you didn’t get the deal, Steph. I’ve had that happen before because the asset mgr took forever to get back with an answer. I guess it just comes w the territory.
Btw, I’m with ya on the weather. I grew up in Pinellas Cty and can’t remember a crappier winter.
On February 12, 2010 at 9:25am, Stephani said...
Yeah, it’s pretty annoying losing out on a deal because the asset manager takes an entire week to get back with an answer. Oh well. I know it will be back on the market in a few days, so hopefully I can snatch it up.
On February 12, 2010 at 9:19am, Shae said...
Ok, you were right…that doesn’t even look that appetizing. LOL! Hoping to get a better scallops recipe for ya, bud.
You’ll be doing a post about getting this same house under contract in the next couple weeks….
.-= Shae´s last blog ..The Wealthy Widow =-.
On February 12, 2010 at 9:24am, Stephani said...
I told you so. And it tasted about 100 times worse than the picture looks, if you can imagine that. Bleh.
On February 13, 2010 at 5:42am, Craig Fuhr said...
OMG – yup, I did. I just threw up in my mouth. But, it’s OK, I swallowed it.
.-= Craig Fuhr´s last blog ..Snowed In and Still Buying Houses. =-.
On February 13, 2010 at 8:48am, Stephani said...
Ewwwww.
On February 13, 2010 at 3:19pm, Carey_PA said...
Ok Steph I will admit that the pic doesn’t look all that yummy but when I clicked on the recipe to see what it’s suppose to look like…..well it looks delicious. I hope you give it a try again. I think it will be an amazing dish and it’s definitely going on my list of meals to cook up.
I’m a HUGE scallops fan (well I’m just a huge food fan in general lately lol) But I do love me some scallops. I’m sorry about the deal but I know you’ll stick with it and you’ll get it if it’s still hanging around.
.-= Carey_PA´s last blog ..From the worse day of my life to taking a seller’s call…. =-.
On February 13, 2010 at 3:30pm, Stephani said...
Hey Carey,
That picture is actually not a pic of the recipe in question. It’s just a generic one that shows up on the side of all the recipes on that site. I agree though, that it looks DELISH, which is why I picked the recipe in the first place. I didn’t realize until afterwards that it wasn’t actually a picture of scallops parmesan.
Either way, I screwed it up royally, and it was honestly one of the most horrid things I’ve ever eaten.
On February 13, 2010 at 4:06pm, Jimmy said...
Hey Steph on that offer you made, what if you weren’t able to find a buyer in 3 days? Would you lose your deposit?
Thanks!
JJ
On February 13, 2010 at 10:26pm, Stephani said...
Hi Jimmy,
They are never able to close in 3 days- I just put that in the offer to make it look stronger. They will usually send their addenda back with a closing date 3 weeks to 30 days from the date of the contract.
But yes, if I was not able to close and I made an offer with no contingencies, I would lose my earnest deposit…
Steph
On February 14, 2010 at 11:35pm, Neil Uttamsingh said...
Steph,
Really interesting to read about the wholesale process.
It continually blows my mind to read how different the US and Canadian real estate markets are, with regards to wholesaling specifically.
I have some fellow real estate investors who are trying to wholesale properties in Ontario, and to no avail. I will direct them to your blog so that they can see how it’s done!
.-= Neil Uttamsingh´s last blog ..How to buy your first rental property – Step Seven =-.
On February 15, 2010 at 6:39am, Stephani said...
Hi Neil,
I’ve heard from some other people in Canada that wholesaling doesn’t work there, and have always wondered why? Is it a legal issue?
Would love to have your fellow Canadians stop by- thanks for telling them about me.
Steph
On February 15, 2010 at 8:27pm, Neil Uttamsingh said...
Hi Steph,
In my opinion, there are a number of reasons why wholesaling does not work in Canada. I have compiled this information just based upon my own observation and experience.
1) Banking regulation in Canada is very strict.
Many Canadians poke fun at our banks and our banking system, often times out of frustration. The frustration is felt by Canadians, because they perceive the banks to be very ‘tight’ with their regulation. The truth is, they actually are. As such, there have always been very strict guidelines with regards to issuing mortgages. As a result of these strict guidelines, the Canadian market has…
2) A very low mortgage default rate.
I have heard this stat before, and it is actually quite ridiculously low. The sat I believe is less than one percent. This percentage is not exact, so don’t quote me…However, it is very close to what I just quoted. Needless to say, it is shockingly low.
As a result of the two points above, many people in Canada who end up obtaining a mortgage for a property, have been thoroughly qualified, and for the most part are perceived by the Canadian Banks as being a low risk for default.
Another reason why I think that Wholesaling does not exist in Canada is because…
3) There is less competition between banks.
In Canada we have only 5 major banks. These 5 major banks own the Lion’s share of the market. There also exist many other banks, however, they are for the most part unknown, and hold close to no market share.
Because we have less competition between the banks, the banks do not have to make changes to their banking products at the detriment of the bank.
As an example, in Canada we used to be able to amortize our mortgages over 40 years. Of the Big 5 banks in Canada, only a few banks offered the 40 year amortization. Not all of the banks wanted to offer the 40 year amortization, because they felt is was too risky of a product.
As a result of many of the variables above, and due to the strict regulation of the Canadian banks, Canada did not experience a dramatic decline in housing values during this past recession.
There were many areas of Canada where the values held, and many areas where the values continued to increase.
As a result, in Canada, we do not have homeowners who are distressed and need to unload their homes. There is the odd power of sale here and there, but that is it.
So in summary, I think that wholesaling does not exist in Canada in the same way in the States, due to the strict regulation of the Canadian Banks. The strict regulation make is very rare for a homeowner to get into trouble with their mortgage, because a lot of time is spent by the bank, making sure that the homeowner will be at a low risk of defaulting.
I hope my monster response made some sense…
Onwards and Upwards,
Neil
.-= Neil Uttamsingh´s last blog ..How to buy your first rental property – Step Seven =-.
On February 16, 2010 at 10:16am, Stephani said...
Holy crap! Thank you for the response, Neil.
So, if I am understanding you correctly, the banks in Canada actually qualify people who apply for mortgages, as opposed to just handing them out to anyone who can fog a mirror, like they do here in the US? What a novel idea. Hehe.
I can see how that would keep the foreclosure rate very low, but what about people who are in trouble and need to sell quickly for other reasons; job loss, death in the family, illness, job transfer,divorce, etc? I would think there are still many motivated sellers, which would create opportunity to buy at a discount, no?
On February 16, 2010 at 10:02pm, Neil Uttamsingh said...
Hey Steph,
Good question.
Funny enough, since my last monster comment on your blog, the Canadian Federal Government just tightened up mortgage rules again in Canada. The announcement was made today and was front page news.
Anyways, to your point, there are definitely distressed sellers due to job losses, divorces, illness etc. Most of these homes end up going power of sale.
It is EXTREMELY tough to get your hands on the Power of Sale lists that banks have. The banks guard these lists like the Knight guarded the Holy Grail in Indiana Jones and The Last Crusade.
You cannot get your hands on this list unless you have a major IN with someone. As such, the sweet deals (homes to buy at a discount) are only scooped up by a select few.
Also, since the population of Canada is only one tenth of the population of the US, we do not have the same volumes of distressed homes on the market, that you guys would have.
.-= Neil Uttamsingh´s last blog ..Everybody loves Canada =-.
On February 17, 2010 at 5:02am, Stephani said...
Hmmmmm. Interesting.
I assume power of sale is like a foreclosure auction?
I guess, then, the best way to go (if at all) would be to get to the homeowner before the power of sale?
Thanks for the education, btw- I know nada about Canadian real estate.
On February 18, 2010 at 10:27pm, Neil Uttamsingh said...
Hey Steph,
Its all good. I know close to nada about US real estate, so we are even.
I don’t think that power of sale and the foreclosure auction would be a direct comparison.
Power of sale in Canada essentially happens when the homeowner is delinquent on their property tax payments and first mortgage payments. Once the homeowner is behind on payments, the bank takes over and makes the homeowner sell the home, so that the bank can recoup any losses.
You are right… the best way to go is to get to the homeowner before it goes power of sale. The only trouble though is since these power of sale lists are kept on the d low by the banks… it is quite hard to figure out what homeowners are distressed and need to sell…
.-= Neil Uttamsingh´s last blog ..A message from the author =-.