All Forum Posts by: Brian Burke

There are basically 3 ways:

1. Wait for the listing to go back on the market.

2. See if the agent will accept a backup offer after the OO reservation period has expired, with the hope of just moving into contract if the first buyer rescinds (without going BOM).

3. Partner with a non-profit. Most of the OO reservation periods also permit governmental agencies and non-profit organizations to submit offers. I've seen groups partner with a non-profit, the non-profit buys in their name, the operating partner does the rehab, provides the capital, and deals with the resale, and the non-profit and operating partner split the profits in some manner.

I'm not a fan of option 3 but it's a creative trick. I think the intent of the exemption is to allow non-profits to acquire affordable housing, but instead it is exploited such that the non-profit uses it to generate revenue. I wonder if "they" will catch onto this trick someday and change the rules to prohibit it.

I make a lot of offers on short sales. We win some, we lose some.

It is the wave of the future as banks are getting more & more skittish on foreclosing.

One recent example was a short sale (yes, listed on MLS and yes, our offer was close to full asking price). Waited 6 to 8 months for the bank to approve the deal. Rehabbed and flipped it. Result: over $50K NET.

Will I continue to buy short sales? Um...yeah!

Dash F., some great music comes out of Nashville. Looking forward to visiting next year for CMA Fest!

For a registered agent, you could use a friend, or better yet your attorney, or a service that specializes in acting as agents for service. Any of those would give you anonymity from that standpoint.

In order to stay off of deeds and recorded documents, you would have to appoint another Manager of the LLC and that person would have to sign. I suppose that you could have the LLCs operating agreement limit their authority and participation in some respect.

Now for the practical, real-world point of view: I can't think of any reason that you would want to make any other person a Manager of your LLC just so you can obscure your identity. In my humble, non-attorney, opinion, the risks of doing so far outweigh the risks of the rest of the world knowing who you are. What if you and your "friend/Manager" have a falling out and he/she deeds all of the property to themself, or to his/her church, or whatever, and makes your life miserable while you unwind and sort out the clouded title of your property? That's just one example of many.

I'm sure you have a good reason for cloaking in obscurity, and I make no judgment about that, but if you are seeking investors you are selling YOU and you want everyone to know who you are and what you are doing. I've been quoted in newspapers, written a magazine article, co-hosted an investment radio show, spoke on expert panels at investment conferences, and my company quoted in the Wall Street Journal, all for publicity. It's tough to find investors out there and if no one knows who you are and what you do, you put yourself at a serious disadvantage. I say, be proud of it and scream from the mountaintops "MY GOAL IS TO MAXIMIZE MY INVESTOR'S RETURN, AND I DO THAT BY MAKING STRATEGIC REAL ESTATE INVESTMENT DECISIONS!"

One last comment...investors will not trust you with their money if there is a surrogate having signature authority over your LLC. Remember, they are investing in, and entrusting, YOU.

Seems to me that the real question is "is the property worth more than $81,000" (plus back payments). My guess is probably not if he bought it 5 years ago. If not, let it go to foreclosure and buy it at today's prices rather than assuming the inflated prices of 5 years ago.

Hello Dash F.,

1) I wouldn't choose a different name than the ones I've used. There are many schools of thought on this, and in part it depends on your objectives. You could use some cryptic name like A1XB, LLC if you want no one knowing what you do or who you are. If you want to attract investment capital, you might be better off with a name that means something or relates to your company's purpose. For example my primary company is Praxis Capital, LLC. "Praxis" is a greek word that means "translating an idea into action". When investors ask about what Praxis means they are more impressed that it actually means something than if I were to say it was some random combination of letters. Even if you aren't seeking investors now, things change so picking a name that will serve you well in the future makes sense. Having been both a one-person operation and now a large company with investors and employees, I can say that I've been better off now than I was when I was small. That being said, when we are quoted in the media or issue press releases, it is helpful to have a company name that people can remember, and random letter combinations aren't memorable. And names like "Square Orange Zucchini, LLC" don't give you any credibility as a real estate investment firm.

2) It's hard to be totally private. In most states, people can go on the internet and go to the Secretary of State's website and look up the address of the LLC and the agent for service of process. You could use a "mailbox" type address for the LLC, and appoint a company like CT Corporate System (or similar) to be your agent for service of process (for a fee, of course) and that would keep the mystery alive for a while. I believe that there are some states (not sure where but I'm sure someone else can answer, perhaps Nevada or Delaware?) where the LLC info is not disclosed. That might be something to explore. Your mileage may vary.

3) This dovetails into question 2 and ultimately why you'll never truly keep your LLC completely seperate from you. If I can't find out who an LLC "really is" by looking at the Secretary of State's website, I'll look at who is signing the deed, or deeds of trust. Those instruments are public record, and must be notarized. The notary public cannot notarize "mr. squiggle signature", they must indicate the name of the person they are notarizing in the notary acknowledgement. Your name will also appear, such as "XYZ, LLC By: Dash F., as Manager" below the signature line. You could always appoint some other managing member into your LLC and give them signature authority on deeds, but I think that creates more problems than it solves.

The bottom line is that an LLC gives you a thin veil of privacy and will keep casual observers from knowing who you are, but anyone with a little knowledge of the system will find out who you are. Good luck!

Chris Clothier, when I did this study (about a year or so ago) I expected that I would find that Zillow would be consistently 10% low. I would have been surprised, but not shocked, if the results showed that they were consistently 10% high. What I didn't expect (but I guess I should have) was to find that they were consistently inconsistent. The results, and the practical implication to investors that rely on AVMs, made a lasting impression on me so I remember the outcome very clearly.

I can't say the same, however, for where on my computer I saved the results. I searched for them, but all I accomplished was finding a bunch of old stuff on my hard drive that I could delete. Perhaps the results of my analysis met the same fate last time I was searching my computer for something else.

I did a study on a fairly reasonable sample of my own flips not too long ago. I compared my estimate of value that I came up with using MLS comps and market experience at the time I bought the property, the Zestimate from Zillow, and our actual sale price when I resold the property.

Looking at the pool of homes as a whole, I found that my valuation was accurate to within a couple percent. The Zestimate was also accurate to within a couple percent.

This sampling was a large number of properties. Now drill down and look at it asset-by-asset. My valuation on each property was nearly always within a couple percent of actual sales price. The Zestimate was *sometimes* accurate within a couple percent, and was frequently 10% + high and frequently 10% + low. When you average it all out you come out within a couple percent on the entire sample.

This presents a big problem from a practical level. In addition to all of the other fine comments in this thread I explain it to investors this way: if you rely on Zillow to establish the ARV that will drive your purchase decision, you will buy the properties where the Zestimate is 10% too high and think you are getting a good deal, and you won't make any money on them. You will pass on deals where the Zestimate is 10% too low because you will think it is not a good deal, so you won't make any money (someone else that uses better comps will). The end result: you won't make any money!

15 single-familes going right now, about a half dozen finishing in the next week with just as many starting right behind them. Average turns 3 to 4 weeks. 3 project managers and two in accounting, I wouldn't want to try it with less. In addition to the SFRs, averaging about 4 to 6 apartment units per month lately, down from about 15 per month earlier this year. @Peter Giardini is right, the movement of cash is interesting to watch!

I'm not worried either. When the story breaks I think you will find that this wasn't a screaming deal. You could buy 500 houses one at a time and assemble your own portfolio and get a better overall deal, so don't expect these groups to have the ability to underprice everyone else.

Just one more point Lupe Santiago, Jeff S brings up a very good point about selecting a borrower that has experience. You could avoid almost all of this hassle if you just align yourself with an experienced and active house flipper.

For a first-hand example, I have flipped hundreds of houses and I can't think of any reason why I would want to sue my lender. Those of us active in the business don't bite the hand that feeds us. Furthermore a reputable flipper with a spotless track record is less likely to burn you by not making payments or leave you holding the bag with a half-finished flip.

There are a lot of good operators out there, and a lot of bad ones. Find a good one and establish a relationship and you can probably accomplish your goals with less regulatory hassle, and less idle capital sitting in the bank earning nothing while you wait for your loan broker (or your marketing if you become the broker) to find you the next deal.