Archive Monthly Archives: December 2012

Happy New Year 2013 from Steve and Sylvia

Family vacation

As 2012 draws to a close, it’s been a wonderful year in Austin for me, Sylvia and our family. Shelly is doing well in her sophomore year at TCU. Caroline is doing well in her (also) sophomore year at Westlake High School. Our business finally picked up in 2012 to our busiest since 2008. And I, Steve lost 30 lbs! More on that below.

Thanks goes out to all of our friends, family, clients, customers, acquaintances and others. Without you, our lives would not be as wonderful as they are. We end 2012 with much gratitude.

Now for my shameless plug and request for support. No, it’s not about business or leads or referrals. Something much more important. It’s about health, fitness and curing cancer. Please read on …

I spent most of 2012 getting into better shape. I was becoming a fatty again, and as I approached age 50 in 2012, I wanted to get serious about my fitness and health. I started cold turkey in March 2012 getting up at 5AM (yes, 5AM!), 5 days a week, and going to the gym for morning workouts. I have continued that schedule ever since. Through exercise and better eating, I’ve lost 30 pounds and feel great as 2012 comes to an end.

But as 2013 begins, I feel like I hit a fitness plateau. The routine is getting old, and I feel myself slipping back to old habits. I want to push myself to another level. I need a new challenge for 2013.

I was not sure what that challenge would be, until New Years Eve, 2012. I’m going to run the LiveStrong half marathon in Austin this February!

Read more …

Posted by Steve
3 years ago

What’s the deal with the We Buy Houses signs in Austin

We Buy Houses Austin sign

Ever wonder what the “We Buy Houses” signs really mean? You see them all over Austin, usually in middle to lower priced neighborhoods, and older transitional areas with a lot of fixers. Often the signs seems homemade and haphazardly placed. The words “fast” and “cash” are on most. If you were to call this sign, would you really receive an offer to close fast, for cash?

Maybe, but probably not.

The signs, called “bandit signs”, are actually a lead generation tool used by real estate wholesalers and flippers. Some of these guys are actually legitimate real estate investors looking for motivated sellers with dumpy homes who want or need to sell fast. Most of the sign placers are “bird dogs”, who find the motivated sellers then turn the deal over to the investor for a finder’s fee.

Either way, the main goal is to make you an offer and get the home under contract at a price that will produce a profit on either a wholesale resell (selling the contract) or a rehab/flip.

What sort of offer will these guys (or gals) make you?
The formula is fairly universal and straight forward. 70% of market value minus repair costs. Market Value, also known in the business as “After Repair Value” (ARV), is the value of the home if it were in retail sales condition and able to sell to a buyer using a conventional mortgage.

So, let’s say you inherited an old junker in South Austin that would sell for $225,000 in good condition, but it has a bad slab, bad roof, major plumbing problems, severe neglect and multiple trailer loads of junk to haul out of the rat infested back yard. And let’s say it would cost $100K to bring the home up to par, including the investor’s holding time costs, interest, insurance, utilities, risk factors, etc.

That home would be worth (0.70*225,000) – $100,000 = $57,500.

I’m over-simplifying the formula, and there are a lot of other components that go into the “repair costs” part, but this is an accurate “quick and dirty” computation. Also, the terms of the deal will often not be “all cash”, but instead some sort of creative financing. And, these deals are very, very hard to find.

Will this investor make money if he can buy such a house at this price, owner financed? Maybe, maybe not. Many don’t.

Read more …

Posted by Steve
3 years ago