Mike Norvell Sr., Developers Capital Realty

This week was certainly busy. We had a scheduled trip to SW Fl already planned and I had a Grandaughter that was coming at any time.

I decided to make the trip, and just try to stay in touch with the cell phone. I certainly wanted to be there at the time, but I could not know when "that time" would be.

Well, on day one of a minimum 2 day trip I got the call that mom to be was being taken to the hospital. It soon became apparent that this was going to be a marathon baby instead of a sprint, so the docs did what they do to slow down the process so that mom to be could rest for a while.

The next day we were coming back on a four hour return trip and I got the call in the later afternoon.....It would be most any minute now, hurry!.. Well, there is no real way to hurry I-75 traffic, so we just stayed in touch on the cell phone with my son and the rest of the family. Mom to be was apparently no longer in a talking mood.

I finally arrived at the hospital at the nick of time, according to the cell phone conversation I was getting from one of my sons as I neared the hospital parking lot.

Four hours later, I remembered how much I hated waiting room furniture, and took my Grandson for a walk to a vending machine in the lobby. As luck would have it, when I came back 15 minutes later, our new addition to the family was here.

Little baby Aubrey had finally arrived. There was much joy as the collective family members shared hugs..I remember counting, 18 people here to share in the event...........What a welcoming party..

When your kids have kids it certianly is a time for reflection. Our first concern, is always is the mom OK, is the baby OK, count the fingers and toes!! Little Aubrey is our fourth Grandbaby,and with another son recently married, I think I am beginning to see a pattern here.....But its a nice pattern.

I wish them all the best........I better get back to work myself....Pretty soon there will be a need for all kinds of things... Spoiling your grandkids is an earned priveledge, RIGHT???

Here is a new twist of what banks are doing to hold cash...they are limiting credit lines, pulling credit lines, changing dates on when your payments are due....

If you have credit cards with a low interest rate, there is a new game that is getting more prevalent...they are changing the date when your payments are due. They also are now taking up to 2 business days to post payments, and then posting after 2 pm because the new computers don't work on weekends....I actually had this line given to me!!!

I have had a line of credit with Bank Of America for quite some time, and have been known to use it. If I can use 10 grand for a deposit on a deal or some venture, then why not use it...But suddenly the payments come due on a different day every month....The only way to do this is go on an auto pay, but now the autopay has to be set up 2 months in advance and done thru the mail... I recently did an on line payment on the 12th of the month for a payment due on the 16th....it posted on the 17th and my low interest rate was removed according to a letter sent out immediately. Luckily my wife( she is so wonderful) always wants a paper copy for our files and I could reference the transaction...It showed we requested the payment on the proper day, from our Bank of AMerica account to the same bank...they said they could not guarentee to get payments posted on the same day.....Finally, two supervisors later, they relented, and put my status back to where it was, and dropped the changes... Yes, charges...my 2.99% had gone to over 20% plus a fee for late payment....

There is no doubt that lines of credit are real problems , they can be pulled at any time.

I had a deal not long ago where the buyer put up a hundred grand off a line of credit, the check cleared, and was then PULLED from the deposit..Yes it can happen. We thought it was impossible, but I saw this really occur.

I now am using an attorney with an automatic sweep account for any furher transactions..Its just too crazy now to wonder what these institutions are going to do.

Wachovia is not much better::On a more personal note, I just transferred 2000 to my wifes account. earlier in the day I had bought gas and bought a new blackberry. FOR MY SAFETY AND SECURITY my Wachovia bank bounced the deposit to my wifes account....apparently I am not allowed to do more than 2000 in a day without thier permission...FOR MY SAFETY AND SECURITY>>> I told them that bouncing a check to my wife does not do much for my safety and security!!!!!!!!!!!!!!

Trust me, you really don't want to bounce a check to your wife....ANd yes, we had the money, it did not show as NSF, it said UCF-Other... I was told that is not as bad as NSF...Excuse me...thats like telling me that getting hit in the head with front side of the hammer is better than getting hit with the claw side of the hammer...and I had to go in and sign for a waiver allowing me to do more than 2000. per day out of my account.....crazy stuff, crazy stuff

Over the last 20 years I have been involved in well over 100 remodeling jobs. Quite a few of them were my own deals. Trust me, nothing teaches you fixer-upper math like spending your own money.

More recently, I have been involved in the decision making process attatched to buying and remodeling REOs and foreclosure homes, and most recently, short sales. I don't claim to be the final decision maker, just have been in the loop. Some of the decisions I have seen are based on guesses, based on some whim or wild estimate that does not take simple math into the process. It really is just simple math.

Those of us in Real Estate know that we cannot be all things to all people. So while I can make recommendations, based on a background of doing more remodels than most, I certainly can't force someone to use basic math skills.

One of my first mistakes in doing remodels on my own rentals years ago was to make un-necessary repairs. My next most common mistake was buying materials like I would in my own home, such a nice carpet when vinyl would do for half the price, with twice the expected life.

I learned to always buy very good paint, plumbing, and electical supplies. There is no money saved by scrimping on these items!!

Following that was the complete and utter failure to do a room by room master plan of exactly what we planned to do,price out labor and materials, and then stick to the plan.

Finally, I made the major mistake of trying to work the remodel into my own schedule and do much of the work myself. While I am a decent carpenter, plumber, roofer and electrician, I am not as fast or proficient as crews of experts who come in and knock the jobs out.

So, I have learned that If I ( or my clients) buy right, we can do what we do best,(make deals) and then hire crews, get permits, and get the jobs done properly and on schedule..Maybe...Ok, maybe not on schedule, but you will have a better shot this way than trying to work on nights and weekends..

We take after repaired value vs before repaired value. the difference is of course the cost of repairs plus value added by the repairs being all done. What was that??? Example.......

Many clients cannot see the vision of the home getting all fixed up, its either done or its not..thats why a $1000.00 paint job can bring 5000 more on the price of the house....and 10,000. less if its not done, for a spread of 15 grand. Thats a good test of if the repairs are worth making..look at the spread just like this on everything you consider replacing if its not broke.....if it brings back an anticipated higher after repaired value pricing, then by all means do the upgrade.

So, if the nieghborhood would support a price of 450k all fixed up, and actual repairs would cost 100k, then anywhere between the spread would be where you wanted to be........minus profit , commisions,holding costs and other expenses added in.

or 450k retail x 85% wholesale minus commisons, repairs, profit, and expenses minus unexpected holding costs equals maximum bid price....and you should start lower than that by at least 10-20 %

Ok, lets get started on the Math!!!!

First, do a comp on the neighborhood. If the home you are looking at were to be in great shape, what would it be worth in the current environment?? Do the math... If it were the prettiest house on the street, all fixed up, what would it sell for fast??? This is your after repaired highest maximum value

Second, get expert bids on doing the work, room by room, and get the bids in writing on what it will take to make the home liveable, or sellable..Resist any urges to invest in expensive upgrades on rental properties, just get it clean and safe, start your bids here and then see if there is any room later to add premium touches that will be noticed.

Third. Take the costs of all the repairs, your anticipated profit, taxes, holding costs, and other expenses and subtract them from your after repaired value price. Then take another 20% off the remainder and submit your bid on the property.

If you have done your process properly, you will arrive at a price that will make money if you win the bid. If you don't win the bid, then good. Better to miss the bid than lose money on a project that is doomed to fail.

Happy Bidding........and Be careful on what you buy, its worth taking the time to get it right before you purchase!!

Who knows, but we figure differently than that.

Its another Busy day at the office Of Blount Development Group.

And we are proud to announce that we are finally direct to several banks, and have created quite a contact list.We are working with quite a few attorneys now from accross the country, it seems they hold the keys to many of the distressed assets.

Our new website at www.AssetsClearingHouse.com has brought in another few leads from buyers agents looking for the elusive REO properties. We are also dealing in NPS and other Notes, but that is another story.

You know, the ones that can be bought for 35 cents on the current BPO, and are in my neighborhood so I can go by after lunch to look at them. I talk to all of them, and remember that there was a time when I was looking for basic knowledge as well.

But, all in all, we have found some very qualified people thru our new site, and we have deals in the works as of this moment from these people. Others are just curious, and are very interested in learning in this phone call or email what it has taken me over a year of intense research to learn.

But yesterday, I had a very nice lady who said that she was calling for her husband, and she was to get infomation and then if he was interested, he would call me back.

Poor Lady, and then she said it. "Now, I don't want to get this wrong, so how exactly do you spell REO??"

You really hate to laugh when the other party is being so serious, but I really can't help it. In the midst of a very busy time of extremely serious conference calls and high finance, this nice woman has got my full attention now.

Gathering my composure, I say very carefully , Ok Mrs *****, do you have a pen? ALright, Its R E O. Did you get it that time? Great, I will send out a welcome packet for you and hour husband to look over, and our minimum is 5 million, so have a nice day and tell your husband we appreciate the call.

I haven't heard back. I hope she didn't shoot her husband .

Its another Busy day at the office Of Blount Development Group.

And we are proud to announce that we are finally direct to several banks, and have created quite a contact list.We are working with quite a few attorneys now from accross the country, it seems they hold the keys to many of the distressed assets.

Our new website at www.AssetsClearingHouse.com has brought in another few leads from buyers agents looking for the elusive REO properties. We are also dealing in NPS and other Notes, but that is another story.

You know, the ones that can be bought for 35 cents on the current BPO, and are in my neighborhood so I can go by after lunch to look at them. I talk to all of them, and remember that there was a time when I was looking for basic knowledge as well.

But, all in all, we have found some very qualified people thru our new site, and we have deals in the works as of this moment from these people. Others are just curious, and are very interested in learning in this phone call or email what it has taken me over a year of intense research to learn.

But yesterday, I had a very nice lady who said that she was calling for her husband, and she was to get infomation and then if he was interested, he would call me back.

Poor Lady, and then she said it. "Now, I don't want to get this wrong, so how exactly do you spell REO??"

You really hate to laugh when the other party is being so serious, but I really can't help it. In the midst of a very busy time of extremely serious conference calls and high finance, this nice woman has got my full attention now.

Gathering my composure, I say very carefully , Ok Mrs *****, do you have a pen? ALright, Its R E O. Did you get it that time? Great, I will send out a welcome packet for you and hour husband to look over, and our minimum is 5 million, so have a nice day and tell your husband we appreciate the call.

I haven't heard back. I hope she didn't shoot her husband .