By: Raymond Stoklosa

Raymond Stoklosa — Wed, 18 Nov 2009 22:13:08 +0000

I certainly agree that for the average person buying bank-owned homes (REO) is the best way to go because both short sales and foreclosure trustee’s sales are fraught with uncertainty and hidden complications. REO’s are a more business like transaction. Granted the procedures are biased in favor of the bank, but we are dealing with a purely business decision and a reasonable amount of due diligence can be performed to protect the buyer. We teach an educational program about each topic to inform and educate investors and home buyers about the issues and potential pitfalls. However, banks sell their properties at fair market value, and they are not giving them away. It’s simply the “willing buyer-willing seller concept” at work. In almost every instance the property is worth what the buyer pays in light of the location, physical condition and market activity.  Can a buyer over pay? Of course. Is the bank desperate to dump their inventory? Not in San Mateo County.

I do disagree with several things you mentioned. In my opinion:
1. All homes sell for fair market value. A discount is a bargain only when applied to the fair market value of a property. A negotiated purchase price that is less than the asking price for an over-priced home is not a bargain. It’s the negotiated Fair Market Value for the property.  If you paid 50 Cents on the Dollar, the property is probably worth 50 Cents on the Dollar.
2. There are no reliable “tools which can give the investment value of any given property with ability to predict how much appreciation it achieves in the coming years.” No one person or tool can predict future appreciation with accuracy or reliability.   There are tools that can calculate cash flow, return on investment and depreciation analysis based upon a given set of variables. However, the “garbage in- garbage out” rule applies.

When I hear people talk about “incredible profit” by flipping, I ask who and where and let’s see the details. Lots of alleged real estate gurus are selling “how to do it” flipping packages and making a lot of money. In fact, many of the self-described gurus are making more money selling stuff than from flipping real estate. Ask yourself, if they are making such incredible profits why are they spending their time, money and effort to promote their system when they can be making incredible profits flipping or wholesaleing real estate. All markets are different. Flipping only works for the right person in the right market environment. In my experience San Mateo County is not a flipping market especially if someone expects incredible profits re-selling newly acquired property.. Real estate is by definition an illiquid long term asset. It’s an investment asset not a speculative one. It’s time that makes money in real estate…not timing.

I’ve been a real estate broker for 31 years and during that time I seen or heard just about every so-called guru who has come down the road. If you are interested in an interesting bit of advice go to:  http://www.johntreed.com/Reedgururating.html

I think you may find the information useful. And, please attend one of our upcoming programs and introduce yourself. I’d like to get acquainted. Good luck.

Take care and be well.

By: Ryan

Ryan — Thu, 12 Nov 2009 10:36:02 +0000

With the recent housing crisis in the United States, many investors have seized opportunities to increase their real estate profits through purchasing distressed properties. Many new investors have also discovered that they can obtain properties for less than their market value and realize an incredible profit by reselling them. However, it is by far better to invest in REO properties than it is to purchase real estate via short sale or foreclosure. There are tools which can give the investment value of any given property with ability to predict how much appreciation it achieves in the coming years.

Comments on: Homeview, Sterling Downs and Farralon Neighborhood Belmont Real Estate Price Report

By: Raymond Stoklosa

By: Ryan