Podcast Cover

19 Mar Ep. 31 Shannon St. Pierre-Snapchat, Foreclosures, Passive-Income, Comps, and Appraisals

SUBSCRIBE ON ITUNES

In this episode Adam talks with Hermann London Realtor, Shannon St. Pierre about EVERYTHING! They discuss how Realtors can use Snapchat, buying foreclosures, Adam’s $10,000 a month passive-income goal, and how one Realtor plans on using offers as comps to help with the appraisal.

Email questions to PODCAST@HermannLondon.com

WHAT’S INSIDE
:53 Adam introduces Hermann London Realtor, Shannon St. Pierre
2:30 Gary Vaynerchuck’s views on Snapchat & how Realtors use social media
7:52 Adam made an offer on a single family home. Why didn’t the tenant buy it first
22:22 Adam has a passive-income goal of $10,000 a month
31:30 Setting up an LLC
34:08 Hermann London needs more properties even if it is inherited or burned out
34:55 A lender might call a loan if an owner moves out and make them refinance
39:30 How does a lender know if the owner moves out
41:30 Adam is a little frustrated that home prices are going up
43:28 Looking at past prices when making offers but forgetting about appreciation
44:10 Can a Realtor use offers as comps when appraising
49:00 There was 1 house for sale in Maplewood/Richmond Heights School District
50:57 Beware of foreclosure websites especially regarding inspections
55:00 Adam firmly believes in the value of home staging. His brother & mom own Watson Home Staging
56:28 How to contact Shannon- CELL: 314-583-0070 EMAIL: Shannon@LivingTowerGrove.com

Adam Kruse & Shannon St. Pierre

Adam Kruse & Shannon St. Pierre

 

 

 

 

 

 

 

TRANSCRIPTION

Adam-Welcome to the St. Louis Realtor Podcast, live from the rooftop of the Hermann London Real Estate Group in beautiful downtown Maplewood, Missouri. Today is episode 31. It’s March 14th, 2017 and everyone is wondering what are you doing 3 days before St. Patty’s day? You should be getting your beer made green and getting your whisky ready. We do have a very special guest today. One of my personal favorites; Shannon St. Pierre.

Shannon-It’s a bit chilly today out here on the rooftop.

Adam-That’s right. You are the color person here today so we appreciate that. You are already throwing zingers at me. Our episode is going to be what my wife calls a potpourri episode; a mix. We are going to talk about all sorts of different things. We are going to talk about a rental property I just bought, one I just sold, some warnings about a real estate deal I was trying to get involved in but I found the seller to be a little shady, some of my financial goals, and dilemmas we are having with properties. We are just going to dive right in. It’s going to be an interesting episode for anyone that is interested in real estate and is a real estate nerd like I am. Are you one too?

Shannon-Yes.

Adam- We sat in our company sales meeting today and we talked for 25 minutes about 3 lines on the sales contract. We were arguing what to put for the interest rate and the inspection resolution period and the acceptance deadline date. We just love to talk about real estate. If you do to, please email PODCAST@HermannLondon.com or leave us a message on Facebook and subscribe on iTunes. Our producer, Joey, has us on so many websites.

Shannon-So what’s your Snapchat?

Adam-I may ask you about Snapchat. Shannon and I went and saw a presentation by Gary Vaynerchuck. Gary V for those who don’t know. Did he say that Snapchat was going to be a big deal?

Shannon-It is a big deal. It’s here and if you are not in and in the know then you are already behind.

Adam-I’m in because I have a Snapchat but I’m definitely not in the know because all I get is pictures of my friend’s dogs and my friend Brian Clarich, who is the funniest guy on Snapchat ever.

Shannon-I’ll have to follow him.

Adam-Is it public or is it private messages?

Shannon-It’s both.

Adam-The thing I don’t like about Snapchat is that you can never see the stuff again. I’d love to pull out my phone and show you him with his funny face on and his dating tryout videos.

Shannon-Does he send you his chat or is it in his story?

Adam-I don’t know. I don’t watch it through his story. I used to think people were sending just me a message and I’m figuring out he is sending them to a bunch of different people. How do people use Snapchat for real estate?

Shannon-Some people are actually using it to not necessarilly promote the listing but the lifestyle of the listing. They are using it to showcase the view or something that you are not going to get from the MLS or Zillow; some of those unique features of houses that don’t come through and are neat.

Adam-You pull up your Snapchat and show this kitchen that is outdated and then Snapchat makes it look like it has granite countertops?

Shannon-It puts a filter on it. Wouldn’t that be awesome.

Adam-A Snapchat filter to make your kitchen look good.

Shannon-That is an awesome idea. One realtor used it to show some home technology at Home Depot.

Adam-I guess people could find them as a realtor and then watch stuff on their story?

Shannon-Yes. If you don’t know their username, a lot of people use the Snap codes and promote that by sharing it on Twitter and Instagram to direct people to Snapchat. The hard part about Snapchat is there is no discovery.

Adam-I feel like they are going to have this podcast in a history class 10 years from now and say, “Can you believe people didn’t know how to use Snapchat and now we use it for everything?”. Two more questions. Can you get extra filters other than the basic ones.

Shannon-I haven’t found a way to do that but businesses can create a specialized one. It is a geo-filter. It’s really inexpensive for most businesses to do but it may only be up to 50,000 square feet around your business, but if you use that, it’s like $2,000. If you take it down to the perimeter of your business it is only $50.

Adam-That’s how Snapchat is making money?

Shannon-For now.

Adam-The other day someone showed me a filter where their baby’s face was in every Cheerio in a bowl of Cheerios. Was that a filter before I got on Snapchat or did they download it?

Shannon-I haven’t figured out how specific filters end up in different people’s accounts.

Adam-I wonder if you can download a package of filters. We need to get back to real estate. I was searching the MLS the other day and I found a home near The Hill in St. Louis; I guess technically it is in Southwest Gardens. It was listed at $50,000. I did what I often do and I just made an offer.

Shannon-Single family?

Adam-Single family home. I don’t remember what I offered but it must have been around $30,000. We negotiated back and forth. Ultimately I bought it and closed today for $36,000. What’s interesting to me is that there is already a tenant in the property paying $595 a month and she’s been paying it for a while and she is going to sign a new lease with us when her lease ends in May and she is going to pay $645 a month. It’s a standard increase. The thing that really hit me when I was at closing and they were showing me what my payment was going to be is that my payment is going to be $243 a month. I put 20% down which was just over $6,000 and it boggles my mind. The resident who was occupying the property knew it was for sale and there was sign in front of her house and people were coming through. Why didn’t she buy it? I’m literally paying half of what her rent is.

Shannon-I’ve come across this scenario a couple times the past few months. What I’m finding when you ask that question is sometimes they don’t even think of it. It’s not even on their radar to buy a house.

Adam-Do they assume only rich people buy houses?

Shannon-I think so or they will say they don’t have 20% to put down and I don’t know where that misconception comes from. When was the last time you really needed to put 20% down?

Adam-I did it on this because it was an investment. She could have bought it with zero down.

Shannon-Investors have to put some skin in the game but an owner/occupant who will be living there can buy a home for as little as 3% or nothing. I think there are a lot of misconceptions out there with people who have never owned a home before. Sometimes they want to buy a home but their credit score is below 600 and they are not qualifying right now.

Adam-I’ve heard the argument that they don’t want to be committed but it’s interesting to me because as far as I’m concerned she is more committed to this property than I am. When she signs this new lease she has to stay there for a year.

Shannon-How long has she been there?

Adam-I don’t know.

Shannon-I find that wildly interesting. Some of the properties I’ve looked at have had tenants who have been there for 6 to 10 years. Are they complacent?

Adam-I’m less committed because I could sell it to someone else right now if I wanted to. She is stuck there. In this case my mortgage is under half her lease amount and that is amazing. I’ll be making $400 a month once her rent goes up. I’ll have my money back in a year and a half. Even better is when we buy these 4-family units and one unit pays the mortgage for the entire building and then you have 3 other units doing it too. Those numbers are even better. I want to give a shout out to my lender, Melissa Imo-Moffitt, from American Eagle Credit Union and Anheuser-Busch Employees Credit Union. She is a friend of mine who is awesome. I was under the misconception that you can’t get a loan for under $50,000.

Shannon-I had the same thing.

Adam-What I found is that you can but it’s often that the broker or lender don’t want to do it because they don’t make much money off those deals.

Shannon-They make no money. The almost lose money.

Adam-She did it for me. I hope she made some money.

Shannon-Is there a minimum?

Adam-I think she said there is no minimum.

Shannon-The bank I checked with was $20,000. A broker friend of mine said no way, not gonna happen.

Adam-It wasn’t worth his time. That’s amazing. My numbers would not have been nearly as sexy if I had just paid cash for the property because my return on investment number would be different. Right now my investment is $6,000 and I’m making $400 a month. If you figure out my ROI, it’s a really high number. If I had put down all $36,000 I would be making the entire $645 a month from rent but my percentage of return based on what I’ve put down is a lot lower.

Shannon-You are leveraging your credit.

Adam-Buying these lower end properties has now opened my eyes and I might buy some more. I’ll talk about later what my financial goal is and this will play into that. Next on my list is to talk about this building I’m selling. We’re still in the process of selling it so I’m not going to put the address out there. It is a 4 family building I bought with a partner and we rehabbed it. We bought it for $20,000 and put a little over $100,000 into it. It was condemned and there had been a fire which is why we got it for so cheap. We have it listed for $230,000 and we have it rented and I’m thinking I should buy my partner out. My partner wants to cash out and take his money to do other stuff. I was thinking I should buy it but I wasn’t taking any action. I would rather make cash-flow every month and still have equity in the property. I called Melissa-Imo and she figures out how I can do it as a cash-out refinance to pay off our original lean holders and partner and we would refinance it into my name. I would avoid capital gains taxes since I’m not selling it. I paid for an appraisal but before we had the results back we got an offer.

I wanted an offer for a long time and now we have one after I’m trying to buy it. We made a pretty aggressive counter-offer. The offer was something like $200,000 and I countered back at $225,000. I assumed they wouldn’t pay it so I am proceeding forward but then they counter back. Now I’ve decided that I really want this property so I tell them we don’t want it. Ten minutes later they accepted my previous counter of $225,000 and they are buying it. I’m both excited and upset at the same time.

Shannon-What are you going to net?

Adam-We both are going to get something around $40,000.

Shannon-Why not take that $40,000 and go buy 4 more properties where the cashflow will be more than what you were getting with that 4 family?

Adam-It’s possible to do that but the cashflow on this property was going to be really good. If I had kept my equity in the property I think my total loan on it would have been something like $175,000. We pay the lien holder back and all the work we had done and paid off my loan partner, I think my loan would have been $175,000. The math that I did even after management, I was going to be making around $1,000 a month.

Shannon-A $1,000 cashflow at $175,000 is huge.

Adam-It was good. I would have had my $1,000 a month plus whenever I wanted to I could still sell it and gotten all that cash I was going to get out of it. I guess I could have done some sort of a HELOC and gotten all that equity if I would have needed it. Now I’m just going to have to take all this money and buy other stuff when I already have this great solution with this gut rehabbed property with tenants in it.

Shannon-It would have been a great property. Finding 4 other properties, fixing them up, and getting tenants in there is not worth the hassle.

Adam-What happened was they then got under contract, did their inspections, and they found a couple things they wanted us to fix like a little plumbing leak and electric. You know the ground electric when they run it to the water line? They had run it to the old main water line. We had to put a new one in because it was previously condemned. We said no, we are not doing anything for you guys. I was still hoping they would back out so I could buy it. As the seller we have no right to back out. They then asked for 2 more days to think about it and we said no. They took it anyway. We are selling the building and I’ve got to take that money and find something else to buy. The stomach ache came when I realized I had to pay capital gains taxes on this house.

Shannon-What are the taxes?

Adam-I don’t know the percentage. Ask your own CPA about this stuff. Since we owned the property for under a year and we are selling it, I have to pay something…I don’t remember. If we had closed in April I would have had to pay 20% or some huge amount….there was something about the day I closed was a year after so the tax burden was significantly less.

Shannon-Capital gains tax is 2 years. Is there a 1 year law?

Adam-There is some sort of a 1 year thing. Don’t take my word on it. Call your CPA. I’m having fun buying these properties and I’ve always talked on this show about how my goal is to have more passive income than what my expenses are. There is a boardgame called Cashflow by Robert Kiyosaki. I don’t think I have ever played that with you. Have you ever read Rich Dad Poor Dad?

Shannon-Yes.

Adam-He made this boardgame that is like Monopoly but there are income statements and balance sheets.

Shannon-That sounds like an accountant game.

Adam-It’s about getting out of the rat race so you don’t have to rely on your job to pay for your expenses. My goal has always been to have income from rental properties pay for my expenses but that is really a moving target. I just bought a new car so my car payment went up and we want a bigger house and a baby so that will all change. Since it is a moving target I decided that I need a more set goal which is why I came up with $10,000 a month. Right now my expenses are significantly less than that but having this measurable goal has been empowering for me because it’s giving me something to work for so now every opportunity I see I can measure how much closer it’s getting me to my goal. I can open my Google Sheets, update it, and see how much closer I am to my goal. I love that I have this set goal to work towards.

Shannon-That’s a good goal. I’m going to do the same thing.

Adam-What am I going to do when I get to $10,000 a month in passive income? I don’t know  and that’s sort of the point. I’ll do whatever I want. Will I keep working? I’m sure I will because I love working. If I wanted to quit my job and volunteer at a dog shelter I could do that. I like the idea of having that kind of freedom and flexibility. As salespeople who make commission I don’t feel like we have a whole lot of financial security because you never know where your next paycheck is going to come from. For me no matter how much money I have in the bank it doesn’t give me that feeling of financial security. The idea of having passive money coming in every month gives me that sense of security.

Shannon-I think the hardest parts are setting the goal and just getting started. For us we have a limited amount of cash on hand to buy the properties and leveraging the cash we have along with our credit.

Adam-You might have analysis paralysis where you feel this extreme pressure to make it perfect so you do nothing. My suggestion is to do something. Just buy something and figure it out. The worst case is you sell it or lose a couple thousand dollars but you are still learning and you are on your path to achieving your goals. That is failing forward. If you sit here with the equity you have in your house and the money in the bank you are never going to get towards your goal. You have to actually do something. You also need to consider other aspects of that. I was showing a property in north city and they want $40,000 for their property. When we go up there it’s a four family building in really nice shape. Each unit has 2 bedrooms, bathroom, kitchen, basement storage, and a vacant lot next door so it feels like it has a big yard. Each unit pays $550. You though my deal by The Hill was a good one? This guy is going to buy a 4-family building for less and he is going to get almost 4 times what I was getting. Mine was $640 and his is $550. If he buys this building and gets a loan his payment is going to be around the $250 range and he is going to be making close to $2,000 a month. We wrote offers and the agent is being difficult but I think he will get it.

Shannon-Maybe I should slide in there and buy it myself.

Adam-The thing you have to consider is that property has very little chance of ever appreciating in value. If you drive around there, there are more homes that are boarded up than there are homes that are occupied. The chance of it appreciating are low. 20 years from now it will be worth the same but that’s fine because he will have been making $2,000 a month for the past 20 years!

Shannon-I could not care less at that amount.

Adam-I think it’s interesting. Why don’t I go properties like that? I like to have a diversified portfolio with some nicer properties and some that are all about cashflow which is why I can sit here and say take action. It doesn’t have to meet your exact formula because you don’t have to have an exact formula. The formula is buy cashflowing investments. If I wanted to get to my $10,000 a month passive income in the next 6 months I could.

Shannon-You talk about buying the rental properties but what about flips? Do you count it towards your monthly and is it still a goal?

Adam-To me a flip is when you make a bunch of money but now you’ve got to figure out what to do with this money. I’ve been buying rental properties for 10 years. I never really had the goal of $10,000. I never had a finish line. Now that I have that I end up calling my dad and asking him if it’s too good to be true. What I’ve figured out is that the difference between me and someone who sets this goal today is that I’ve been working really hard for a long time and I’ve got this money to use as down payments. If you are just starting now and you don’t have any money then these flips may be more important to you because you can get the cash to make these down payments.

Shannon-Are you buying these as Adam Kruse or an LLC?

Adam-It depends on the financing. When I bought it through Melissa-Imo, it was an investment loan but it has to be as Adam Kruse. I’ve talked to other lenders that will do a commercial type of loan and you can buy that as an LLC.

Shannon-Are there benefits if you flip a property as you vs. LLC?

Adam-Call your attorney if you have questions. My understanding is that if you do it as an LLC you have legal liability protections for you so in theory they could sue that LLC for everything the LLC is worth. If you have all of your properties in different LLC they can’t take all of them. Think of each LLC as different islands. They can’t really attack all of your islands. My experience is that they sue your LLC, you, and they sue everybody. Will I claim these properties into LLC’s now? Yeah, I’ll probably put each property into different LLC. It’s not that expensive to make an LLC. I know how to do it you can go to SOS.MO.GOV and you can whip out an LLC in 15-20 minutes.

Shannon-For something like $50?

Adam-It’s more like $100. It’s not $500. You could pay your attorney to do it and he will go to SOS.MO.GOV, do the exact same thing, add his hourly rate, and then you will pay $500. That’s my new financial goal. I like to share that. I hear a long time ago that if you have a goal and it’s in your head you have a small chance of getting it. If you write it down your chance is greater. If you tell more people about it then it’s even greater. And if you say it on your podcast then everyone knows. When I see Tom Milford for lunch in a couple days he is going to ask me how I’m doing on that $10,000. Now that I’ve told the podcast I really have to work on it. I’ll try to give updates. I’m about half way to my goal right now. Can I keep talking at you?

Shannon-Keep going.

Adam-I’ll do a quick commercial. Since we are selling that 4-family unit I was discussing, we do need to buy more properties. I am enjoying this flipping thing I’m doing with my partner Brian and our company ProperVest. If anyone is listening and they know about a burned out house, a house where there is a senior transitioning, or a house that’s been inherited and they want to get rid of it for cash, call us. It’s like those commercials that say they buy ugly houses. Give me a call at 314-210-5115. We’d love to by the properties from you.

Something came up that I thought was unbelievable. I’ve been in this real estate game for 12 years. Earlier I said I got this loan and I’m going to quick claim it into an LLC. What is the fear about that? Have you ever heard that the lender might call the loan?

Shannon-Is that a possibility?

Adam-They say it’s a possibility because the loan is in your name and technically the property is in the LLC’s name so they might call the loan. People say that would never happen.

Shannon-The fine print says there is a million things that could happen for them to call the loan.

Adam-If you buy a property and are going to live there then eventually move out they could call the loan which I didn’t realize that. I thought that part was all about intent. If you intend to live there a couple years and then circumstances change so you rent the property they could call the loan even though you are paying them every month. Well, we had a situation that came up. Someone that is close to me owns a duplex and she lived there for 6 years but moved in with her husband when she got married. Guess what? A year later she gets a letter from her lender  saying they heard she moved out and now she has move back in, refinance, or they will call the loan.

Shannon-Is it an FHA loan?

Adam-I don’t know. Would that influence it?

Shannon-FHA will do that.

Adam-First of all, I’ve never heard of anyone calling a loan ever. You never hear about it happening. This can’t be true so I called the bank on their behalf. The bank says she should send a letter explaining why she moved and what her intent was. She sends the letter and then 4 days later she gets a letter back saying sorry, she has to move back in, refinance, or the loan will be called. They said there was a bond rider on the loan, which I’ve never heard of, and now that person has to refinance the property to keep it as a rental. She just wants to sell it and be done with it. I’m telling her to keep it.

Shannon-What’s the big deal in refinancing?

Adam-The big deal to this person is that they hate all this kind of stuff. She doesn’t get it and she’s not into loans and rental property management. Anything like this, she doesn’t understand, and stresses her out. When I have car problems I get stressed out because I don’t know what they are talking about. She’ll probably refinance.

Shannon-I didn’t know they actually did that. How are they going to find out?

Adam-How do they know if you move? You probably fill out a change of address with the postal service and the new person is putting the utilities in their name. I don’t think they are using A.I. and geo-tracking through your phone’s I.P. address.

Shannon-We need to ask somebody about that. If you do an FHA loan and a 203K loan you have to be an owner-occupant.

Adam-Do you think this bond-rider means they have to live there forever?

Shannon-The 203K has a minimum you have to live there. I thought it was like 1 year. 5 years is the normal forgiveness if you do state down payment assistance.

Adam-I know we are not talking about this like we are experts but this is the type of thing that makes it a good reason to use a realtor that has been around for a while and knows that these scenarios exist. You should also use a lender that will communicate with you and tell you what is going on. I guarantee you she didn’t know there was a bond rider on the property. Can I keep going?

Shannon-Keep going.

Adam-Frustratingly for me, home prices are going up. It’s funny because when we are representing sellers it is great but when we are representing buyers I find it to be frustrating and a little scary. I had a homebuyer that was looking in the Maplewood-Richmond Heights School District and he went to an open house that was jam packed with 30-40 people. He says he loves it and wants to make an offer so I go and do my research on what it’s worth and it was listed around $180,000. While doing my research I find that I sold one extremely similar in the area a year ago for $155,000. This new house is not that much more updated and a less superior lot. He asked me what to offer and I said that he should pay $170,000 but they are going to get way over asking and it’s going to sell for way too much. We offered $190,000 and we didn’t get it. What we look at as realtors is the past but what we are not considering is home prices increasing. We have to look at the past and add in a percentage we take out of the air for appreciation. We should be able to do this because everyone knows the best thing about real estate is that it appreciates. Why don’t we as realtors want to give the credit for that when we are representing the buyer. We try to get the best deal for our client but when there are multiple offers sometimes the goal is to just get the property.

Shannon-Last year didn’t you run into the issue of it actually appraising for the asking price?

Adam-There were a couple cases where it didn’t appraise.

Shannon-You can pay whatever you want if it’s the house you want but the thing has to appraise.

Adam-I asked him how long he plans on living there and he said 3-5 years which to me means we need to be much more sensitive about the price. If someone says they are going to live in a house for 30 years and die in it, then we still want to get the property for a good price but it’s less important to be so particular about it. Even if they move in 15 years the market will be a lot different and they will have equity in the home. The worst thing is when you help someone buy a house and they call you a couple years later and you have to tell them they will be losing some money. It’s not really our fault that the market changes. I heard something interesting about appraisals. If a property doesn’t appraise the seller has to agree to lower the price or the buyer has to agree to come up with the difference. I don’t like it when the buyer comes up with the difference but in some cases you don’t agree with the appraisal. Appraisal is an art not a science so it’s not the be all end all. Sometimes the seller doesn’t want to or cant’ afford to come down so you have to make a compromise. Another realtor was telling me about how he was showing a home that was listed at $200,000 so he did the comps and says it’s worth $180,000. He calls the listing agent and is about to make an offer and the listing agent says they already have multiple offers. The buyer’s agent asks if $180,000 will be enough and the listing agent says no because they already have multiple offers over asking. The buyer’s agent says no house has ever sold for $200,000 in that neighborhood and asks how it will appraise. The seller’s agent says they are going to submit all the over-asking offers. Will that stand up? I don’t know. I had lunch with an appraiser friend of mine and he said it would be hard for him to justify that in court. He would love to have all those offers as more supporting documents for value but only through a sale.

Shannon-If it is way over I don’t see how it would be supporting documentation.

Adam-If it’s a little over then the appraiser could say it’s an appreciating market.

Shannon-He could say that there haven’t really been enough sales over the past year.

Adam-If it ends up back on the market and the appraiser says it’s only worth $170,000 I don’t think the seller is going to lower the price. Prices are going up which is why you are seeing all your realtor friends on Facebook say it’s a great time to sell because inventory is low. I did a search today and there was only one home for sale in the Maplewood-Richmond Heights School District. My only criteria was that it was active and in that school district. I also noticed that the total number of listings on the MLS for St. Louis, St. Charles, Jefferson County, Cape Girardeau, and parts of Illinois and there are just under 13,000 active listings on the market. I remember when that was over 30,000 in 2006 and the area covered was smaller. It is like a third of what it was in the past. People need a realtor like you who is door knocking and creating Facebook ads trying to find sellers before everyone knows about them. I was showing a client a house listed by Owners.com and they use Hubzu.com to take and receive offers on foreclosures. All the foreclosure companies are now affiliated with some website to accept offers so that the listing agent is not inundated with offers. I feel bad for the person at the bank who is managing 1,000 listings across the country. Hubzu is like an auction thing and we started to make an offer and what we found is that they have no inspection contingency in their offer. It is not like a normal offer where we get to use our contract and use the terms we want. We are following only their terms of their contract which they don’t even give you. They give you little morsels of what it is. I had to contact customer support. There is no inspection contingency on this house that is over $600,000.

Shannon-It doesn’t even say on the website that there is not inspection contingency?

Adam-Right. They have a sample contract that says you can get an inspection or you might not. It will be one of those so I’m wondering which one it will be. It insinuates that you will have the chance to decide that when you are making your bid but it didn’t have that so I contacted customer support. They said they expect us to do our inspections before making a bid, which is crazy. On any house inspections are hundreds of dollars.

Shannon-$800-$1,000 normally.

Adam-This is a huge house so the inspection price may be way more and there are no utilities on so they won’t even be able to do a thorough inspection.

Shannon-Is Hubzu geared toward purely the investor? Even on HudStore.com, once it goes to the investor they do not allow inspections.

Adam-I think on HudStore.com they say that the seller is not going to do any inspections.

Shannon-You can do inspections but you don’t get your earnest money back if you are an investor.

Adam-In that case you have the right to do your inspections and then back out. In this case we have no right to back out because of inspections so I guess we would have to figure a way to wriggle out because of loan contingency if we wanted to. They won’t turn on the utilities and we are not even under contract. They are saying go figure it out, spend $800 on inspections, and you don’t even know if you will get the house. I’m saying to beware. Use a realtor that has your best interest in mind.

Shannon-It’s good for realtors to know that is even a possibility.

Adam-When I contacted customer service and said it was unreasonable they sent me the exact same response back. One last comment. I want to talk about home staging and the value of it. I do believe in home stating. My brother and my mother did just start a company called Watson Home Staging and they are doing a great job. I just listed two properties for an investor at the same time. One of them he staged and one he didn’t because he thought it was in a better school district and location. The one he staged was under contract in 2 days. The one he didn’t stage has been on the market for 10 days and has no contract. The feedback we are getting is that it feels small. Home staging does work and it does sell. It makes the photos look better which will get more showings and when people visit it will make the home feel more inviting and warm.

Shannon-I agree.

Adam-I know you believe in it. Home staging sells. Check it out. Maybe use Watson Home Staging. Shout out to my brother. I don’t know why I’m helping him out because I usually end up going and moving all that stuff with him and I’m creating more work for myself. I’ll wrap it up. Please contact Shannon St. Pierre.

Shannon-My phone number is 3145830070. Shannon@LivingTowerGrove.com. @LivingTG on Snapchat.

Adam-What’s your Pinterest? Oh, Gary V said Pinterest is on its way out.

Shannon-I do like Pinterest.

Adam-Thank you for being on the show. Please send in your comments and questions to PODCAST@HermannLondon.com and subscribe to the podcast.

Dig into these related posts