All Forum Posts by: Account Closed

@Jeremy Knox "This is exactly what she said in an e-mail:Please bring your POF, a blank EMD, Articles of Incorporation and Certificate of Good Standing"

Ok. She had it right EMD. You had it wrong EDM.

Gleaning from this one line in her email, and the documentation she is asking for, she sounds like she has worked with or works with serious investors and knows what she is talking about. She might be OK after all.

@Jorge Maldonado Welcome to BP!

@Talal B. It is not that difficult. Just make sure you read all your contracts that you signed very carefully. Also when you see a property you like on the HUD website, go to the addendums page and read everything especially if it is a property you really really want. Granted start with the PCR (Property Condition Report) and the Repair Escrow if there is one to get an idea of what they estimate the repairs would cost in order for the home to qualify for an FHA loan. I usually download all the addendums on a property I set my eyes on with a focus to bid until I win.

I had my package rejected once because I had left out a "Disclaimer and Disclosure" document that I was supposed to sign and include in my package even though I had followed the Asset Manger's Instructions to the letter on how to properly fill out my package. The problem was that the missing document was one of the documents on the addendums page. They had not mentioned this in their instructions though and I had not checked out the addendums fully. Thankfully, they allowed me to fix it and they ended up approving the package.

@Talal B. If I am not mistaken, from what I have read on HUD contracts, HUD sells their homes "as is, where is". They will not do any repairs and they will not allow you to do any repairs whatsoever before you close on the home. Regardless of whether it is a simple code violation, damage etc. you are not to lift a finger to improve or repair a HUD house until you own it and your name is on the title.

I got permission from the HUD Field Manager in my area to turn on the utilities on a HUD home I was working on that I had under contract. I needed to turn on the natural gas which would have helped my inspection but the tech from the gas company pointed out some code violation to do with the venting of the furnace. I could not correct the violation per their rules so I could not turn the gas on. Like a previous poster said, if you are in a situation like this, you either pass on the deal and lose your EMD or move forward if you still feel comfortable with things.

I do not know if you can re-negotiate, it may be a possibility and you can try but I do not know. If you do try and are successful, let us know.

@Jeremy Knox Ok, let me get this straight, if, IF the realtor really said EDM, and if, IF, she was really serious and it was not a slip of the tongue....ahem, I would say you probably need a new realtor. That is almost like a doctor saying you need an M.I.R. .....and the doctor was serious.....and it was not a slip of the doctor's tongue.

Hopefully, it was just a slip of the tongue. Or maybe you as a newbie, being a little nervous possibly as you talked to her have a sketchy memory of what you heard. So I will give both of you the benefit of the doubt. It is EMD (Earnest Money Deposit).

Keep an eye on her though going forward to make sure she knows what she is talking about. Ask some prodding questions... in a nice way and see what she says e.g. I was just curious as an investor, what is the average price per square foot of older homes that have not been rehabbed in zipcode 123456 that I am considering investing in?

@John Weidner Just my 2 cents but I think it would be more difficult to sell because you would have to find a buyer who was OK with the road noise. I had a similar situation where I had my eye on a house in a nice subdivision but my subject was in the rear of the subdivision where it backed up to an Interstate Highway. I passed on the deal just based on the road noise I could hear when inside the house despite all the other positives it had. I personally just could not get over the road noise and I figured my potential end buyers would have the same issue. Even if they tried to justify it on it's other merits they would not be fully happy with the potential purchase and they would probably bail out of the deal as soon as they saw something that was what they really wanted in the first place.

@Jake Thomas Congrats. You brought that house into the 21st century. When was it originally built?

Welcome to BP @Timothy Edwards .

@Account Closed I don't know but I would say if you get involved in with a major institutional fund, you would probably be just another number and most likely be shut out of the process. If you network at a local REIA and get to know local, real life, experienced, reputable investors that lend privately in your local market, they may offer you the opportunity to partner with them on something they are lending on and thus be willing to teach you the inner workings of the lending game since you are vested with them.

Some reputable self directed IRA companies may have some good educational material on how to be a private lender using a self directed IRA...I don't know, I have never looked into it.

You can also learn a lot by reading through membership agreements that funds put out to see how they are structured and how they lend. Reading through legal documents in public records that chronicle a transaction can also be helpful.....even starting out with the promissory note or simply note and mortgage (or deed of trust) on your own house if it is financed and any other documents you signed e.g. your home owners insurance policy when you purchased it.

On top of everything, make sure you have a good reputable attorney if you ever get into lending to keep you away from potential land mines that can sink you before you even set sail.

@Account Closed . If the main goal is passive income through lending, find a reputable fund or ask for recommendations for one and invest with someone who already knows what they are doing. Lending is a different animal.

While I have not directly lent money to real estate investors, I brokered hard money loans back before the 2008 crash. I worked real closely with a principal of a hard money lending company that lent nationwide. I accompanied him on several on site due diligence inspections on deals I had sent him and learned a lot about the HML business. When we went on an on site due diligence inspection, we would meet the borrower/s, study the subject, the comps, the market and talk to knowledgeable local realtors to see if we could to get a good feel for the market. Then if we felt good about the deal, we would need to find a good local real estate attorney to act as the local lender's counsel to make sure that we were in compliance with the lending laws in that particular State and jurisdiction and our documents were drafted correctly to be enforceable in that jurisdiction.

Once the loan is in place, you need a system for servicing, accounting, making sure taxes and hazard insurance premiums are paid and.....a system for collections if things go wrong. If things go really wrong, you need to be on your game to legally take the property back and find a way to dispose of it.

Bottom line, to be a lender, your due diligence has to be top notch and you have to know everything you can about the subject property, the borrower and the market the subject is in. If you ask me, there are too many moving parts to handle to start out in lending without any prior experience. You can grow into it with time and experience but I would not start there.