All Forum Posts by: Joel Owens

Yes if your other notes are at those interest rates you stated then keeping the cash to make new investments makes sense.

Make a low offer to all 3 and see if one of them bites.Start out at 30 like I said.At the end of the day they want to feel they got more than you were willing to pay them.They want to mentally win the war and feel superior in negotiations.

Let them feel this way and revel in their accomplishments.You will know all the time you accomplished your goals.

It really depends on who the seller is.Was the seller who owner financed a corporation or a one time property owner or a seasoned investor??

If say they invest in a certain asset class say multifamily the deals that are abound today might not be here in a few years and the interest rate might be higher.So in that case they will have a motivation today to cash in.

There are hundreds of reasons they might or might not sell.Some want existing security above potential reinvestment returns.

If they do want to sell the note I don't see them selling to someone else unless as I said there is a ton of equity and the interest rate on the note is great (for the note buyer).

So you are only trying to buy off the seconds on properties you bought a few years ago and obtained owner finance on???

3 years is a long time and motivations can stay the same or change.If they don't need the money now they might not want to sell at 50 cents on the dollar.

In my sellers listings most note buyers haven't touched a second in a few years.The reason is most markets have been declining in value.If they have to foreclose they would lose money on the deal.

So some seconds will be bought but only if the appraisal shows a ton of equity left over after the first and second position.

With you you own the property so in paying off the second you are just reducing your debt down.

If you want to pay 50 cents on the dollar offer 30 cents and work your way up to 50.The owner holding the second may be happy that you have been paying all this time and wants to keep things status quo or they might have other investments they want to pursue.

For example the note is for 300k.You payoff at 150k and they use that to buy a distressed apartment building etc. where over time they turn the 150k into 600k.

Just make the offer and feel them out.

At the end of the day we all want money to afford the things we want to accomplish and have in life.

Given that no matter who you are you only have so much time in the day.You can leverage people to do more in the same amount of time but the time remains the same.

I want to flip this around.A great broker will not only be working with investors but doing deals of their own.

If the investor has the know how they can get licensed and do it themselves.Some investors are professionals like lawyers,doctors,cpa's and want to invest but have no time.They need a broker to help them with their goals.

There is plenty of business out there for everyone and there are many flavors of investors.

If I only have so much time in the day I as a broker want to maximize my return.I can sell a 1 million dollar commercial property and use the same time as selling a 50k property but my returns will be way less.

Okay looking to start some flips first of the year.How do you handle paying contractors??

If you use a GC and they don't pay their subs then they will lien your property for non-payment.

What do you do in those situations in where the GC doesn't pay the subs or you are the GC but have bad subs and you get rid of them and they lien you?? Do you have them sign lien rights waivers before starting the job??

Thanks for any help...........................

I will just tell you from years of experience to put it all in writing. When people just TELL people something is when problems happen.

In writing it is not your work against their word or mis-interpretation of communication. It is I have signed and read this statement and dated it or even if you didn't understand it that is still on you.

It's very easy to have a form drawn up stating that no commission will be owed if your sister chooses to buy your property.

Okay I got you now. Yes it is doubtful they will let just any joe blow assume the loan.

I had this happen in one of my sellers apartment buildings.They have 850 credit scores and tons of reserves and other properties.Had non-recourse 5 year rate at 3.4%.Everyone and their brother wanted to assume the loan.

The lender said no way for 2 reasons.The buyer is not near as qualified as they seller and the lender would rather have the loan paid so they can re-lend at higher rates.

These lenders give below market rates to clients they have established relationships with.

You need to find out if they will let the loan be assumed under ANY conditions and then what those are.Then if your partner can meet those conditions bring them into the deal and work out your arrangement.

The bank doesn't have to let you assume the loan.

What do you mean by sponsor??

This answer to this will just depend on the skill of the person making the investments.

It's like workers who have the maximum taken out on taxes so they get money back at the end of the year.They are happy as it's the only way they know to save.

The other spectrum is people will have the least amount of taxes taken out as they want to grow that money all year long instead of the interest going to the government.

I also agree that how you invest will depend on different stages of your life.In the early stages people are more risky for larger returns possible.Then over time the goal is slow growth to keep up or outpace annual inflation.As you get older wealth creation tends to be less of a goal over wealth preservation.

It all comes down to do you want to make 200k a year and put in 50 hours a week or make 140k and put in 30 hrs with plenty of time to enjoy it??

One myth is that you can totally eliminate risk in investing.There is always risk in everything you do.You can cut down the risk by being as prepared as possible and over time you will have more successes than failures.

The concentration of wealth is subjective as well. Some can say you have a concentration of wealth in real estate.Others say only if you do a certain type of real estate.

For example one can have all holdings in real estate but diversified among many asset classes. So I know people who are wealthy that only do retail and they couldn't tell you anything about another asset class.

Their level of knowledge is so high in that one field that they can make money and returns in any market and know the cycle hitting way before anyone else.

During the boom times some companies ventured out into un-chartered territory and got burned pretty bad.

Another myth is stress goes away after money.This is also not true.If you don't have it you worry how to get it.If you do have it you worry how to keep it.

For me I love real estate. Stocks I am like a fish out of water and have zero interest into getting into that.The time to even scratch the surface to learn that would take away from my core competency and I wouldn't enjoy it.

If you love what you do it's easier to be successful at it.

Things take much longer to develop than people think.

Typically when you see big apartment buildings go up it is a 3 to 5 year process.It might only be a few years from the time the public hears about it but before that years of legwork went into getting to that point.

I couldn't say if right now was the right time to build.Everything is project specific.If the city will let you use a class C finish rather than a class A the numbers will save you money.

Just to give a for instance some cities will demand a traffic light be put in for some projects.The traffic light parts itself are not that expensive but with the fiber optic hookup and underground cabling you are talking hundreds of thousands just for that one item.

Typically on larger projects it's a fight for the developer to make profit.They propose a certain density and drawing.The county or city then wants to reduce the density and add in all these road improvements and lights at the cost of the developer.

All the costs have to work for both parties to get a deal done.I have seen some projects take 2 years to get approved from submitting after going back and forth with revisions and tabling until the next meeting.

So half the battle is the cost and financing available when you break ground and the other is the political junk.How much total land would you be getting??

Have you completed an environmental around the property?? If other businesses have contaminents that have leaked into your soil that could be a huge development problem.

You might want a developer consultant who knows that market to discuss further.

I know nothing of Washington.