All Forum Posts by: Scott Hubbard

The $226K could be tax assessment value or, as you stated above, a drive-by BPO. The bank will likely require an independant valuation like an appraisal or BPO before accepting any offer.

Interesting question... In my experience, you will go a lot further if you try to keep it simple. Pulling rank, or flexing your investor muscles with a negotiator will not get you far.

When I principal a deal, I do not let them know I am an investor. I simply let them believe I am Joe homebuyer. Since Lenders do not own the property and simply operate within parameters dictated by the investor holding the paper, you can sometimes make a connection with the negotiator on a more personal level by taking a few moments to thank the them for their assistance .

Also, humanize the transaction by sharing the plight of the seller and explaining to them how they can really make a difference is your best bet!

Minna-

If you have an approval from the lender then you may need to renegotiate the offer amount becasue most lenders are working from the net proceeds on the HUD 1. If those proceeds decrease, it may void the approval.

Reworking the BPO is very difficult. Most lender will not order a new BPO for 90 days. In my opinion you have one shot at influencing the BPO.

Delaying a sale varies from lender to lender and state to state. There is no clear cut way I know to delay a sale. If there is a strong short sale offer in play or in escrow, then you have a good chance of delaying the sale.


If this is an actual live scenario playing out, give me more information like the lender, how much time before the sale, how much time has passed since the last BPO.... Better yet PM and we can talk.

Originally posted by Matty M:

That is what we're sold. That is one of its functions. But not the goal. The other view is that the goal of any cartel is to protect its market share, hold its power, and ensure its survival.

I agree with this statement in part. The founding fathers had a goal of creating enduring and soverign nation. One needs to look no further than our constitution to prove this fact. Although the founding fathers did agree that fiat money was not good for a fledgling economy like ours, partly because fiat monies were used to finance the revolutionary war, but they certainly help lay the ground work for a Fiat system creating a centralized banking system.

A central bank was created because in the early days of our government a very group of rich "bankers" controlled the money supply which in turn controlled elected officials. They also used different forms of currency and exchange or trade was difficult. Often "exchange rates" between the different currencies were effected by the very same bankers who controlled the nations liquidity. Many of these so-called bankers were aristocrats from other nations and had no roots in this country. The returns made by these aristocats would be pumped into the economies of foreign countries where they originally hailed.

In 1789, the US Constitution created the First Bank of the United States and charged it with creating a common currency. (the first step to a fiat money system). Then, in 1792 the first mint was created to produce federally uniform coins. The coins were made of silver and gold primarily. Individual states could still print paper money, but this money would have to be back by silver and gold.

Fiat money has been used during the founding of this country to finance the revolutionary war. It was also used in the Civil War, World War I and WWII. In order to acheive this, there would be a temporary delinking of the Gold Standard through the legislative process.

You cannot help but think how we got off-track from a commidity backed economy to a fiat based money system. The truth is, simply put, it is WAR. This country has been at war constantly since the turn of the last century. We have either invaded, occupied, or been invaded in every decade if not every year since the first americans landed near plymouth rock.

Whether it be battling the indians as we pushed our way westward, freeing ourselves from tyrrany with England and the French, battling our own political idealogies as in the civil war, fighting the spread of communism, aiding allies or protecting our interests we have been undaunted in our quest for growth and expansion.

Call it greed or self-preservation, we humans seem to posses an innate desire to conquer and consume. And, under whatever flag, religous idealogy, or political system, we american s did not invent WAR, we just have found a way to finance it better than any previous culture.

Originally posted by Kirk B:

An unregulated Free Market creates far too large boom and bust business cycles which causes employment instability among renter types and therefore harms landlords.

The economy is in the shitter right now becuase the free market was supposed to regulate greed and disproportionate risk, when in fact, it encouraged it.

There is no such thing as an unregulated free market, however, there are heavily regulated economies you can point to that have failed in the reccent past: Former Soviet Union, Mexico and several Latin American Countries just name a few. In these countries there are just a few landlords who own a majority of real estate. There is virtually no entreprenuership and little opportunites for the average citizen of these countries to own real estate or create wealth.

Greed is the driving force behind a capitalistic society and the ebb and flows are natural business cycles which are inherent in expanding economies. If you over-regulate, then investment (greed) is curtailed due to the prospect of lower returns. An under-regulated economy has the opposite effect.

The Federal Reserve monitors these business cycles and interevens when necessary. The goal of the Federal Reserve is to strike a balance between GDP growth and inflation. Ideally, our government would like steady growth as well.

Over the last two decades or so, our economy has become more gobally focused. This, in large part, is a major contributing factor to the bust and boom trends we have been experiencing.

Originally posted by Kirk B:

In other news, GEitner is not resigning and Obama is still the best President we have had in the 21st century

Your political views aside, the BUSH administration did also inherit a recession. Although I did not agree with many of his policies, we did have a robust economy for many years.

The Obama administration will have a very difficult task and they are off to a rocky start. They may be the smartest people in the room, but they have not yet been politically savvy enough to put confidence back into the markets.

His attitude towards investors is contemptable. He has particular didain for RE investors. Your average RE investors are middle-class and for him and his ADMIN to not encourage and help these investors bring investment back into the real estate market is particularly foolish.

The BUSH administration saw the need for private investment in 2000 and helped the economy through tax incentives. That recesstion was short-lived partly through the incentives for small investors. On the otherside, his administration did over shoot the mark which has certainly helped put us into the spot we are in now.

I fear, without either a reduction in capital gains or some other incentive for the entrepreneur, this will be a prolonged recession and an even longer drawn out period of low GDP growth with a moderate chance of higher inflation.

If your friend has a buyer already lined up and that buyer is cash then I would recommend using a back to back close. There are a number of Hard Money Lenders who will fund the close for your friend as long as he has a cash buyer. Conventional can also be done in this scenario, but the buyer might need to shop around for lender that do not have seasoning requirements.

In this case, since it is a jumbo loan, your friend should use his money only if the buyer is committed to the deal. And by committed, I mean a large earnest money deposit. Secondly, the buyer's lender will probably require at least 30 days of ownership before they will fund, so the way around this is to find a HML that will fund the end-buyers purchase, then after 30 days re-fi the loan. The fees will be steep, but if you have a $400K deal, there should be some margin there.

Yet another way is to have the seller quitclaim the property to your friend and file it. Then, delay the closing for 30 days and your friend will be the owner on record for at least 30 days.

Your friend, being an RE Agent might be able to convince the owner to transfer ownership using the quitclaim. Before using this method, check with CA laws governing the transfer of ownership. I personally know CA investors using this method, but I have not personally tried it in California so due your homework and contact an Attorney.

Lastly, if your friend uses a quitclaim, be sure to check with the escrow agent to make sure this will not cloud the title. Additionally, also check with the buyer's lender to make sure this will satisfy the seasoning issues.

If you need further clarification, PM me and we can talk.

As stated already, you should use an addendum in your purchase contract that the lender must agree in writing to waive their right to file for a deficiency judgment.

This protects not only your homeowner but you as well.

1. He can use a seperate Escrow company from the title company. I would look for a small escrow title company locally and ask if they would handle the escrow while working with another title company.

2. Using an LLC in a transaction can be problemmatic especially in a double close scenario. Most investors do not use LLC's in short sales and especially in double closes because lenders will not underwrite jumbo's. LLC's are best used in a wholesale investor scenario where the investor has cash or they are using an investor friendly lender.

3. Option contracts can cause issues if used incorrectly. Did he file a memorandum of agreement? Did he have the contract approved with an RE attorney?

Are you talking about a Short Sale Processing company?

Yes, lenders are accepting short sales! If your using a real estate agent chances are that your not going to be able to negotiate directly unless your agent has had enough sense to get an authorization to release information from the seller and seller's agent.

Typically, lenders will counter near the BPO Price as a starting point. That's probably where you are.

If the listing agent has not figured this part out and does not have the sense to know his/her fiduciary responsibility is to negotiate very hard for her client (indirectly for you too), then this agent is inexperienced and you are wasting your time.