Home Buying in Los Angeles>Question Details

laurenberryh…, Home Buyer in Killeen, TX

I am only intreseted in buying single famly homes in foreclosure under market in Los Angeles that will have some equity.

Asked by laurenberryhill, Killeen, TX Sun May 19, 2013

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Dear Laurenberryhill,

Although a statement like this will most often be scoffed at by Los Angeles real estate professionals, it's a common note and likely the most heard introduction we get to new clients. For that reason it may make sense to address why you get this reaction from seasoned agents.

First and foremost, every buyer wants a "deal." To most, that means the opportunity to buy something desirable at a discounted price. In an real estate world that would also mean the discounted gem would be located in an A tier market, like Los Angeles, New York, San Francisco, etc. Hence, when an experienced pro hears a potential client explain they will only buy something with the idyllic characteristics you described they have the same reaction a mom may have to hearing a stranger tell them her newborn may only eat baby food. Seems like common sense, right? Any good mom will know that already.

Second, buzzwords are often misunderstood and on the surface seem much more exciting and enticing than they do after one has taken the time to fully understand them. I don't mean to imply you don't fully understand the benefits and drawbacks of buying foreclosed properties, but when veteran agents hear that you will only buy "foreclosed" assets it can make them wonder if you understand that valuable property can also be found as short sales, probates, or as non foreclosure properties which have some other form of distress, or if you have just left a weekend seminar with a "guru" preaching how to make money in real estate with little to no effort...

Finally your pitch. There is no shortage of money and/or buyers who want to buy deals in Los Angeles below market. Your competition for these properties include pension funds, private equity investors, pooled money led by fix and flip gurus, and experience mom and pop investors just to name the most capable and most present. These groups will buy multiple properties a month (sometimes 30 or more) and have large sums of cash to spend. They make their decisions in very short order (1-3 days) and can close within 5-10 days.

The most successful of these buyers know exactly what they will and won't buy and lead their conversation with exact specifications. Experienced and successful real estate brokers know how to "qualify" their buyers as well as they qualify a deal. Buyer qualifying 101 tells us that a real buyer can lead with specifics and follow up with examples of where they've done it before.

I'll leave you with this:

You're off to a solid start. You've made a decision to pursue real estate investment and you know which market you're seeking. You've made the jump and started your search in the right forum. You know you want a good deal, are determined not to be a sucker and know of one asset type that can help you achieve that goal.

To continue on your path of success, refine your pitch to be more specific. Consider that deals are found beyond the foreclosure market. Scan the neighborhoods of Los Angeles as it's a wide and diverse place (I assure you Bel Air is a very different market than Vermont Knolls). Determine which price points are best suited to your goals and abilities and keep at it!

Best of luck,
A

Allan S. Glass
President
ASG Real Estate Inc. ®
149 S. Barrington Ave, Suite #660
Los Angeles . CA 90049
Mobile: 213.952.9052
Direct: 213.973.8637 (213.97.FUNDS)
Fax: 213.947.4461
E: asg@allanglass.com
http://www.asgreinc.com
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2 votes Thank Flag Link Sun May 19, 2013
Thank your for your answer. I have done this in Long Beach and was very successful by going directly to bank REO listings. Thought I could try it in LA
with a realtor however after reading these reactions, I think I'll continue on my own.
Flag Mon May 20, 2013
Wow! That sounds like a good idea!
Do you have a lot of cash?
Do you know where to start?
1 vote Thank Flag Link Sun May 19, 2013
Great idea - tough to come by.

Call me if you serious.




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1 vote Thank Flag Link Sun May 19, 2013
REO homes are not selling for much below market these days.

You may be able to get a REO home for a bit under market, but you will surely have to be paying cash.

At least this is true in my area. With the low inventory we have right now if the investors do not grab a property right up, there will be multiple offers from owner occupant buyers, and bidding wars follow.

Much Success to you!

Kawain Payne, Realtor
Prudential California Realty
0 votes Thank Flag Link Mon May 20, 2013
I am only interested in ruling the world.
0 votes Thank Flag Link Sun May 19, 2013
You'll have a lot of competition! Every REO in today's market has about 20-30 cash buyers (investors/developers) submitting non contingent offers. You can try attending Trustee Sales as well (you'd need to do your homework prior to attending) - there are a lot of investors there as well bidding against each other. Contact me directly at lenasrealtor@yahoo.com if you'd like a professional help.
0 votes Thank Flag Link Sun May 19, 2013
Lauren, which real estate investment seminar did you attend to learn that?
0 votes Thank Flag Link Sun May 19, 2013
I have not intended a seminar ,I just purchase properties in foreclosure, hold and sell> I have done this in Long Beach very successfully and now I am interested in Los Angeles.
Flag Sun May 19, 2013
Ditto!
Great answer Allan... I gave it a Thumbs Up!

Ron
0 votes Thank Flag Link Sun May 19, 2013
Tim - I was going to say that! Everyone has a dream though. Lol
0 votes Thank Flag Link Sun May 19, 2013
I'm with Tim! There's No Such Thing at this Poing!
0 votes Thank Flag Link Sun May 19, 2013
OK, that made me laugh. Good luck with that.
0 votes Thank Flag Link Sun May 19, 2013
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