All Forum Posts by: Brian Burke

Using your list, I'll go hard to easy:

I'm not aware of any database that warehouses data on 1031 exchanges by area.

Yes, the goal to distressed MF investing is to reposition the property into better performance. This can be accomplished by better marketing, management improvements, re-branding, installing additional amenities (laundry, play structure, BBQs, etc), upgrading unit interiors, or making cosmetic and/or structural exterior repairs, or various combinations of these. The objective is to make the property more attractive to tenants, which increases occupancy, or more desirable to tenants, which increases rents.

This is much more effective in an area that has fundamentals supporting Multifamily living. For example, an area with high job growth and population in-migration is perfect for this. People who just got a new job, or just moved to a new area, tend to rent apartments. This doesn't mean that you cannot employ this strategy successfully in an area that lacks those characteristics, but having strong fundamentals allows you to raise up your sail and allow the winds to push you. Weaker areas force you to row against the current.

Finally, there are plenty of venues to source property. Auctions, brokers, direct from owners, note purchases, etc.

Good luck!

The full version of adobe acrobat has a binder function, you just select the various files that you want, change them up so they are in the order you want, and then click a button. It converts the stuff to PDF and then you can save a single PDF. Easy to use, but expensive. Worth it though, if it saves you a lot of time.

In the strange stuff to leave behind category...drivers license, social security cards for the whole family, and original birth certificates for the kids. Sad. I found out from neighbors where the guy worked, so bagged it up and dropped it off.

Aside from that, I could have bought my own landfill by now.

I know that not long ago, WF wouldn't finance the buyers of my flips. If I received an offer from a buyer with a WF pre-approval letter I'd ask them to switch lenders or I'd reject the offer. They simply refused to do the loan if the house was owned for less than 90 days. I don't know if this is still true (haven't had a WF buyer lately for some reason) but it sure seems that WF has something against flipping!!

Notwithstanding the above comments (which I agree with), to answer your underlying question (disregarding the effect of depreciation and recapture):

Gain = $31K - cost of sale (commissions etc) - any capital improvements made during ownership period

Income each year = $19,200 (assuming zero vacancy, substitute with actual income collected) - interest (NOT principal) - taxes - insurance - utilities - maintenance - any other expenses

K. Marie Poe, the "sale process" is supposed to be the items defined in 2924 of the civil code as to the generation, posting, mailing, and publishing of the appropriate notices, but I think that the courts have opened the definition to apply more broadly. Not to mention that in today's "homeowners are victims" climate, the pendulum has swung very far toward protecting the homeowner, which means that challenging a rescission is all the more pointless.

In addition to all of the above, and expanding our footprint, I am also tending to flip in the higher price ranges more than I was before. Up there, the prices don't make sense to buy & hold, so there is no competition from wall street. I'm still buying to hold in the lower price ranges, but staying nimble and turning over rocks that the HFs don't even know about are producing ample deal flow despite the added competition.

@Cheryl C, yeah, it is kind of ironic that a buyer cannot back out of the sale, and the sale is considered final once the highest bid is received, but the lender is given a free pass to cancel at will. Not too long ago, many trustees in CA even changed the language in the Notice of Trustee's Sale saying that if the seller is unable to convey title for any reason, the buyers sole recourse will be the return of the purchase price. A little one-sided, don't you think?

F Foster & K. Marie Poe, the legal bills were from two cases, both of which I was the buyer at auction.

In the first case, after my deed was recorded and I started the eviction process, the trustee recorded a cancellation of the trustee's deed, effectively stealing the house from me. The foreclosing lender claimed that the trustor had an open bankruptcy (true) and while the lender had obtained relief from stay (allowing the sale to proceed), at some point during the relief motion the trustor had switched the BK from chapter 13 to chapter 7, and the lender had served the chapter 13 trustee with the motion for relief but had not served the chapter 7 trustee. The bankruptcy judge granted the motion for relief, but nevertheless the trustee & lender saw this as a defect in the sale process.

I sued. They fought me hard, and after they lost a critical motion in a demurrer, they offered to settle. It barely covered my legal fees (and this had gone on for almost a year). It was time to move on.

The second case is one where the trustor claimed that he sent in a reinstatement payment prior to the sale, but the payment was returned. The lender claimed that the payment wasn't sufficient to cover the full amount of reinstatement. I still have title to this one, albeit clouded by a lis pendens, and this suit has been ongoing for over two years now. Trial is scheduled for later this year. That's about all I can say about this one for now!

I recently read this case, but now I can't find the case citation. As I recall, it was a unique set of facts where the trustee gave an incorrect (and very low) opening bid amount to the third-party subcontracted auctioneer. The property sold to a BFP for a very low amount. When the trustee realized their error, they rescinded, and the buyer sued. He won. The court ruled that the trustee's error of communication to the subcontracted auctioneer was not a defect in the statutory foreclosure process, and the sale was upheld. This case didn't extend protections to BFPs when an actual defect in the statutory procedure was detected, as might be the case in the OPs question (or perhaps not!).

Trustees are not given 15 days to deliver the deed. Rather, BUYERS are given 15 calendar days to RECORD the deed, and if they do so, title is deemed perfected as of 8:00 AM on the morning of the auction (CA Civil Code 2924(h)(c)). If the buyer doesn't record in 15 days, that does not invalidate the sale or their title, but instead, title will be deemed perfected as of the date and time that the deed is recorded. This leaves a window of time for some title defect to creep in after the sale, so it is important for buyers to hound the trustee for fast delivery of the deed in order to protect their title.

As to your opinions, I couldn't agree more. Nothing is more frustrating than putting in a lot of time, and tying up a lot of money, just to have something dumb wreck it all. That said, there have been several occasions where I have actually called the trustee asking them to rescind and send me my money back. This usually happens because I contact the owner post-sale and they say they filed bankruptcy just before the sale. If I can confirm that with the BK court, I'll call the trustee and ask for a rescission, because the sale is legally invalid anyway, so it's not worth the fight.