All Forum Posts by: Bryce Y.

@J. Martin Interesting discussion.  Regarding B), I can see you've put a lot of thought into your yield analysis, but assuming you are going to finance the construction, the lender will not look at it the way you do.  They will want to know what it will sell for when completed, so that if you bail halfway through the construction, they can finish it and come out whole.  

@Ross K.  I ended up going with dark green and white.  I wasn't thrilled with the outcome but at least it was nicer than before.

 Hi Joel, what do you mean by this?  New tables, chairs, flooring, etc?  

No problem.  If it was in winter then there would be a legitimate concern over pipes freezing.

What are you worried about?  If you are that concerned just turn them on in your name.

@Dion DePaoli et al

What do you think the future holds for these sub2 promoters? Do you think there will be a mass crumbling of the sub2 "house of cards"? The way I see it is it could happen either by economic forces causing end buyers to default or banks start enforcing DOS in large numbers. What do you think the catalyst will be?

The way I read it is this applies to agents and title companies, and not so much the individual investor. That's why I asked what would have happened if this was discovered when both loans were still performing. Would HUD have the ability to force the bank to call the note due? No legal advice.

Interesting.  What do you think would have happened if they discovered this while the wrap loan was still performing?  

How difficult is it nowadays to assume an FHA loan?

 1.  In general sub2 is a horrible way to sell a property.  Since the loan stays in their name they are on the hook if you stop making payments, note gets called, etc.  It will also affect their ability to get financing in the future.  Not sure where you got 1/3 thing.  I never said anything about high end home owners seller financing...

2.  I would never do it and it is my opinion that most sellers in this guy's situation wouldn't.  Again, just my opinion.  Let me turn this question around.  Would YOU as the seller accept no interest and a balloon in 3 years?  This goes for the entire situation.  What does the seller have to gain by going through you as opposed to selling traditionally?  

3.  I know historically it's low-probability, but IMO it is still a legitimate risk and should be addressed.

4.  I don't think selling to an entity will fly as far as skirting DF, but I'll let the experts comment on that.

What makes you think he'd be receptive to sub2?  Feel free to make the offer, but there's a reason only desperate sellers (usually behind on payments) with little to no equity tend to sell sub2.  

There is also close to zero chance the seller carries back a 2nd lien note interest free w/ balloon. And you cannot sell to an OO buyer with a 3 year balloon. What will you do if the bank calls the note and the buyer can't refi?

I don't mean to be harsh but there are a lot of holes and assumptions in your analysis.