All Forum Posts by: Andy Mirza

@Chantal Routhier I think Ben gave you the best answer: depends on your skill level and the amount of risk you're willing to take on. I'll add that the risk one's willing to take on should be proportional to how much potential profit there is.

Even in your situation where you're just learning, it might make sense to take on a huge project. It would definitely be easier to take on some lighter projects first but if you take the right steps to mitigate your risks, you should come out ok if the numbers make sense and you do the research.

Another thing to consider with the larger projects are the unknown costs that typically come up. Once you start fixing things, you have a greater chance of uncovering more hidden repairs that have to get done.

@Steve Smith Unless I'm missing something, sounds kind of shady to me. Maybe not illegal but not really ethical. Big banks and hedge funds aren't too hard to outmaneuver so understood why they wouldn't be a threat. What was in it for the property owner/borrower in order for them to give you the tenant's rent money?

Did you offer the property owner money for the option to buy which included keeping the rents?

@Alecia Bolton We used Darin Mangum out of UT to draw up docs for our first Fund. He did a great job for a reasonable amount of money.

@Ronke Adetoba

In addition to SEC regulations, you have to abide by federal & state laws. There's nothing that says you can't do it by yourself but as Dan pointed out, you'd be well advised to find an experienced attorney to guide you through the process. There are lots of attorneys out there who specialize in this field. Be aware that there's a wide range in what they charge so do your research to balance price vs quality to find the right fit.

Our Funds are formed under a Reg D, 506 (c) exemption. Each Fund is its own LLC, which purchases its own portfolio of notes in its own name.

Investors get a K1 for tax purposes.

@Chris Seveney I've heard the same things. I've always been curious how it works and if it's worth the time & effort as well. I'll let you know! 

Anyone have any experience, good or bad, with getting an Assignment of Rents for Residential Properties?

We're trying our hand at this for the first time and were curious what others have done.

For this particular loan, our due diligence revealed that the borrower filed multiple BKs to stop sheriff's sales on multiple rental properties. (He had to convert one to a BK Chapter 11 because he had too much property!) He listed our collateralized property as a rental on his filings, which backed up the servicing comments we read. "Paid to" date is in 2009.

Since the sheriff won't schedule any sales through the rest of the year, we decided to try for a Motion to Assign Rents. Reasons to try this:

1. The sheriff may extend the ban on foreclosures past Jan 1

2. Possibility of getting some income from tenants while we wait

3. More importantly, deny the borrower income to fight us in a potential BK proceeding.

4. Low cost and short timeline to get the motion granted (less than $1000 and 30 days)

@Bob Floss II Will County has canceled all sheriff's sale through the end of the year.

Cook County is not allowing the entry of any orders for foreclosure. The courts are extending this moratorium on a monthly basis, so fingers crossed for October.

Seriously, Lake County, July 2021!!!

@Chad U. Sounds like it might take a lawsuit to get that insurance company to pay up. That situation doesn't sound right to me but some insurance companies seem to be good at getting out of ways to pay out.

@Chris Seveney The way I remembered it being explained to me, if you use Ross Diversified, FPI will cover a subsequent REO except for liability insurance. That was a relief to know that there wasn't a gap in coverage. Also, the moment you sign up as a lender in their monitoring program, any new loan that gets transferred to FCI gets covered by FPI if needed. (Please correct me if I'm wrong).

Regardless of what you do for insurance, you should set up your systems to alert you to get the proper insurance and to renew when necessary.

Was having the REO burn down a good thing or a bad thing, just curious?

A lot of people on here are very familiar & experienced with buying and selling. Maybe start by looking at previous posts to learn more and then ask specific questions?

@Johnny Forgione We like Summit Valuations the best. In our experience, they make the least mistakes out of the others we have tried and are easy to work with when we dispute the 1 in 7 BPOs that comes in poorly. They'll review the agents work and make revisions if need be.