Profile picture for ying.li.burnside

Are the real estate deals really gone?!

My question is - Are the real estate deals really gone?!  Looking to spend $300K but buy a home that is worth $400+.  Able to pay cash.  Location: Atlanta, Decatur, Sneville, Hampton, Fayettville, McDonough.  Based on my diligent search, the deals like this do not exist any more at least not today? Please offer your input. Thank you.
  • April 08 2013 - Atlanta
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Answers (19)

There are still deals out there, but you need to act quickly and check it out daily.  Banks are still putting properties on the market.  In the $300K price range there are less buyers, so you might be able to really get a deal.
  • July 05 2013
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Then use Kevin - I suspect he's going to be better and more productive at finding deal than you, he's an agent working in that arena.
  • April 11 2013
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Profile picture for ying.li.burnside
Are there still opportunities with buying around $50-60K per house for rental purposes in the great Atlanta metro?  I had a co-worker who bought two in 2010/2011 around 50K in Cobb county.  The first one is giving him stable rental around $1100+/month. The second he is planning to sell.  Are those deals also fastly snatched by investors?  If I am interested in similar deals + rental income, do I just use MLS, homepath.com, hud? Or do I partner with those investment ventures that claim they have wholesale deals you don't see in MLS? What are the risks involved in partnering with investment ventures? I receive deal alerts from Kevin Morice and a couple of others. 
  • April 11 2013
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Pasadenan is spot on again.

There is a group of buyers in every market that does little more than watch the housing market. It's never a good time to pull the trigger; values will drop more, rates will drop more, there's shadow inventory, I don't like that house.....

This has been going on for three years USER? Is this a focused search or a casual one?

Atlanta statistically bottomed in Jan '10, we are now in a clear seller's market due to lack of inventory, fear of finally rising rates and the perception of an improving economy. I think we'll see a slump in the under 200K market once investors cut and run but overall we should be stable - not really appreciating - but stable over the next three to five years.

We are unlikely to ever see the nonsensical highs we saw, hit the reset button and focus on the last two years and current trends. The days of major buyer kills are long gone.
  • April 11 2013
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- Looking to spend $300K but buy a home that is worth $400+.

And, who isn't?

- Used to be a $800K home was indeed sold around $450K, 

And did those buyers immediately flip it for $800K?


  • April 11 2013
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Profile picture for Blue Nile
You should also be aware, that if people are "listing" properties below present market value... that is a typical marketing strategy used in "declining markets" rather than "chasing the market down".  It doesn't mean the properties were sold at the listed price.  They use the low listing price to get multiple offers, to establish the "present value" faster, rather than waiting for a property to be worth less and cost more to market.

Very few parts of the country are still in a "declining market" presently.  The bubble correction has completed throughout most of the country.
  • April 10 2013
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Profile picture for Blue Nile
There are plenty of people that can buy golf course properties for what ever they want to pay.  That is not at all the issue.

The issue is "what is it worth to them", and "what can they buy cheaper in a better area"?

Yes, the $600k that homes in those areas were selling at during the "bubble years" had absolutely nothing to do with "intrinsic value".

To understand the concept of a bubble a bit better, you may want to watch this segment of a NOVA production:
"Mind over Money".
  • April 10 2013
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Profile picture for ying.li.burnside
The last few posts are extremely informative. Thank you.  However, I would say I have over the last 3 years paid attention to the same Golf & Lake community, actually went to tour the homes there many times. Used to be a $800K home was indeed sold around $450K, or $600K home was sold at $350 on lake or golf with fantastic floor plans. I am not sure I agree they were over appraised b/c they were truly spectacular homes all around. Now what is available in the same community are mid to high 300K, and the floor plans and finishes are not exciting any more. I feel there is another aspect of this, i.e. no matter how deserving a home is to the appraised price, as a country we probably do not have enough people with the buying power to sustain a payment that are 500K to 1 million+ so they have to go default after a few years.  As for Hank's question, "am I privy to all of this", I am not, that is why I will hire an excellent appraiser like you and I would feel money spent on this type expertise is well spent.  I value the opportunity to post on sites like this as I get great insights/referrals from professionals and would be able to pay for their expertise when needed. 
  • April 10 2013
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Well said Pasadenan. As I said initially, this type of post always fascinates me.

The number of "investors" that end up trashed and broke is startling - and as a FNMA foreclosure appraiser I see it regularly. Most fail to understand the almost infinate number of ways they can be blindsided.

Nothing worth spit is being sold below market anymore - FNMA is overpricing properties and pushing Homepath mortgages (conveniently NO appraisals) and short sales are getting full appraisals before lenders decide whether or not to complete a deal. If the appraised value is higher, they counter and if the counter fails, they foreclosure. The home goes back to FNMA, is listed high and sold to a buyer with a Homepath mortgage.....the circle of death.

9457029 - are you privy to all of this?
  • April 10 2013
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Profile picture for Blue Nile
I'm having a great deal of difficulty understanding the "free equity" concept...

If you know the meaning of "present market value", then you already know that what a property is "worth" is what you pay for it, and not a penny more.  And if someone else is willing to pay $100k more than you are?  Well, then it will be sold to them instead.  Nobody really cares about "cash" when the federal reserve will buy the mortgage backed securities with imaginary money.  The seller gets the "cash" regardless.  The only advantage of "cash" is no appraisal contingency, which means the seller can sell it for $100k MORE than it is worth, rather than vice versa.

Yes, Zillow indicates in many areas across the nation that foreclosures and other "distressed" properties are selling for up to 30% less than similar non-distressed properties in similar areas, but that is because:
1) Many foreclosures and REO's have much differed maintenance, and many cannot get occupancy permits "as is", thus some will not even qualify for loans.  Of course people won't pay for maintenance if they can't even afford to pay the monthly mortgage payment to keep the property.
2) The foreclosures and REO's are sold "as is", thus there are not going to be any seller concessions, nor seller corrections of deficiency items.
3) There was an excessive market saturation of bank owned properties that had to be liquidated.

Yes, there was some opportunity for investors to buy REO's, fix them, and put them back on the market, but only if they were extremely good at doing their own repair estimates and own CMA's, and intended to do the repairs themselves.  Most contractors find they make much more money doing the repairs for someone else rather than trying to do flipping of distressed properties.

But something did change at the beginning of the year due to Federal Government policy....  the market saturation of foreclosures and REO's decreased due to Fannie and Freddie both stating they will let the borrower walk away without a foreclosure process and without trying to do a short sale.  This means that Fannie and Freddie can liquidate the properties directly through HUD without going through the expense of a legal process, and without the banks involved.  It also means that the sellers can leave without being strong armed to take 75 cents on the dollar.

Yes, you used to be able to get appraisers to tell you a $300k property was worth $400k.  That is partially what caused the bubble.  (The "real" cause was NAR lobbying congress and HUD for really bad housing policy, especially "nothing down loans" with no income qualifications).

But appraisal guidelines and requirements have changed substantially since then.

If any investor knows how to do estimates and knows how to find and screen investment properties, why would they bother asking on a site like this if there were investment opportunities or not?  Of course there are.  But you don't have enough data on a site like this to make those determinations without visiting the actual property, and without detailed economic analysis of the neighborhood and neighborhood trends.

So, if one claims to be an expert "investor" and claims the used to be able to find thousands of such properties in the desired areas, but now can find "none", maybe you already answered your own question.  On the other hand, maybe your evaluation criterion was defective from the outset?
  • April 10 2013
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Understand the logic - don't necessarily agree but I understand.

A few things -

An attorney isn't likely to write the offer, you will likely use the GAR contract. If it's a REO property, the lender will require that along with a pile of other addendums that essentially absolve them of anything to do with the home. If the buyer doesn't agree and sign, typically there is no deal. At the end of the day, your attorney is going to be filling in a few blanks.

You must be good to be able to find properties and complete data analysis on the area, sounds like you're ahead of most agents. You will also negotiate the offer? If the lawyer will negotiate, what experience and data will they use? Correct on the inspector issue.

As I said, I agree that most agents bring little to the table - however understand that a good agent provides value and makes things look easy. The lawyer isn't going to have much is any juice; REO properties are transacted as stipulated by the bank. If you have issues, they will find someone that doesn't and work with them.

With a buyer agent fee being paid by the seller - and not you - why wouldn't you vet agents and get one with experience in dealing with REOs? Do you know how REO agents interact with reps at the lender to price and manage properties? What type of schedule they use for pricing and reductions?

Real estate is easy, anyone can do and blah blah...until something goes wrong. Again, 80% of agents are all but worthless - but getting one that's experienced - at no cost to you - seems more logical than paying a lawyer to essentially fill out a sales contract.
  • April 10 2013
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Profile picture for ying.li.burnside

Response to Hank Miller.  The reasons for not wanting agent in certain transactions:

1)  I plan to use a real estate attorney to write an offer on some situations (esp. REO, foreclosure deals). With an agent, I still would feel comfortable
 having attorney that I pay an hourly rate to review the contract. I also call the listing party to get as much info as I possibly can. How much work will the agent do? 
2) I did almost most of the work in finding the property. I screen the area and the house before hand. I look through the past tax history up to 2012 (some only contains history up to 2011 so how many agents think to provide more info than you can gather on your own?). I hire a inspector myself. 

In houses that the agent has shown me, of course, I will go through the whole process with the agent to finalize transaction.  But in investment situations where I obtained all the info on my own, I would hire an attorney to write an offer. 

  • April 10 2013
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So already the areas under consideration have been reduced. If you have an agent, do they know what you want? If you don't have an agent, is there a reason?

[Removed by Zillow Moderator. Reason: self-promotion. Please see our Good Neighbor Policy] might be of interest to you
  • April 10 2013
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Profile picture for Mike Bottaro
Historically speaking it is still an excellent time to be buying, however it is starting to slowly become a seller's market.  Inventory is low right now, and sellers are starting to call the shots again only at much lower asking prices from the 2004-2007 era.
  • April 09 2013
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At least in the So Cal area, the party is over...

  • April 09 2013
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Profile picture for ying.li.burnside
More specifically:
1) View: Better than avergae Golf or lake or scenic view
2) Plan:Open floor plan
3) Area: Fayetteville (not as far south as peachtree city), McDonough or Hampton
4) Sq Ft: over 3000
5) Basement: must
6) Equity: 100K (pay 300K~, worth 400K~)
7) Prefer 2007 and newer (but if the space and view is there, will renovate to update.
  • April 09 2013
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Define deal?

I see questions like this and when pressed, many times the person asking the question cannot define what success means. The areas you have are very different; Atlanta? Where in Atlanta? 300K in Hampton is much different than 300K in Decatur.

Define diligent search. Where are you searching, using an agent? How are you establishing market value for the homes you "miss"? Are they really worth what is being asked or paid?

Unless you know what it is that you're looking for, you won't find it
  • April 09 2013
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There will always be deals! Obviously, not as many "deals" can be found when there are fewer homes on the market. However, people will always have situations that create a need to lower their asking price, based upon their need to sell. 

It's all about timing and persistence. I have connected numerous Buyers to an automated service offered by our local MLS where they receive all new listings and price changes the day that they hit the market.

I'm in your area and I would be happy to do the same for you. Just message me!
  • April 09 2013
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This depends on where you are looking and what you are looking for. Truly, the market has changed and continues its rebound but there are still great opportunities out there. They just aren't as abundant as they once were.

The reality is, the longer you wait.....

Good luck,

Bill
  • April 09 2013
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