All Forum Posts by: Joel Cummings

Hello All, Not sure if this idea has been broached in this particular way, but I know the idea is not new. Has anyone ever sold a flip using owner financing, taken a large down payment (25-30%), financed the balance and then sold the note to get a full cash payout? Example:

Purchase price of 525k

25% Down payment 131,250

Note balance 393k

Sell note at 85% value - 334,050

Total cash received: 465300

I know there would need to be some seasoning in there for the sale of the note, and the buyer's credit profile would need to be really good for an 85% payout. Any other issues experienced note buyers would look for?

Is this viable or worth the trouble to consider?

Thank you @Manolo. After talking with my insurance agents, it seems you are right that only the contractor's insurance can cover these types of incidents. Thanks!

So my contractor mooned the neighbor yesterday. Not kidding. He’s no longer working on that job, and an attorney said there’s little chance of being sued, but it made me start thinking general liability insurance might not be a bad idea. Anybody have general liability policy on their flipping business (mine is an LLC)? Suggestions on types of coverage? Can I cover insane contractors under general liability? Hope you laughed a little.

So this is not a rental property question, but it is an eviction issue.  We purchased a flip in June that we have yet to see because the owner has refused to move out. We finally had our eviction hearing on last Friday and everything went fine, the judge issued the writ no problem. 

However, later that day my attorney was informed that the previous owners (defendants) filed a Notice of Removal to Federal Court, a slimy  yet legal delay tactic, AFTER the hearing and the judgement had concluded. My attorney is researching this, but I'm wondering if anyone has any experience with this type of situation. 

We already know they didn't file the Notice properly because my attorney didn't receive any notice of it at all, let alone before it was filed with the court. Will this be completely ignored by the court? My online research says if the notice is valid it can add up to a two weeks to the case, but if it's not valid does it even matter? Thanks for your thoughts.

A Buyer's Agency Agreement is the standard form. There is a place on our state form to discuss commission and where it comes from, but honestly if you're planning to ask an agent to discount their commission as a Buyer's agent on an MLS deal you're going to end up with a poor agent. Sellers pay the agent's commission on the MLS, not the buyer.

For off market properties, you can certainly negotiate commission, since sometimes you'll be paying your agent directly. In a fix and flip situation, I would assume the agent will expect the resale listing on the back end if they bring you the deal, so you might get 5% total for both sides depending on how much work there is to do on the buying end. Also depends on your volume. If you're selling three homes a month, an agent will be more flexible than one deal every six months. You can specify all that in the BAA. 

As far as accountability, there is no contractual way to hold an agent accountable. If you don't like the job they are doing then fire them. If they are being unethical, not acting as a fiduciary, or giving away confidential information to your competition, then you can report them to the local Board of Realtors. Bottom line, if you expect something specific from your agent, be crystal clear about what that is you expect. Most will do their best to comply, or will be honest and say you're nuts. Good luck! 

Melvin List Yes, I'm painfully aware. I have a cash out conventional lined up but would prefer the line. I have about five credit unions willing to do it but want to make sure I'm not missing one.

I'm trying to find a bank that lends in Washington State to give me a line of credit secured to a free and clear duplex. I've called literally every credit union in the state and have a couple options, but wondering if BP has any magic answers. So, any lenders or investors have a bank/credit union they love that does lines of credit secured by investment property? Yes, the rental easily cash flows. Thanks!

Sorry man that sucks, big time. I have to say this next sentence for those who might read this in the future so sorry if it feels critical: don't ever ever ever change jobs right before signing a mortgage, refi or not. You can quit the day after it closes, but if you change anything, even the day before, you're probably screwing over your loan. 

I can put you in touch with a lender friend of mine who might be able to help. PM me your email and I'll send it over to him. If anyone can find a way he can. 

Or find a partner who can qualify for the mortgage and share the deal. Good luck!

Second paint the cabinets. I also think replacing countertops can give a kitchen or bath a whole new feel without replacing everything. 

@Patrick Boutin I have a local lender here in Seattle who does these as well. I don't remember the exact terms, but I think they are similar to the 5% down Fannie Mae product. Try a local investment club or a REIA and I'm sure there is a local lender in your area that has a similar program. I have a lender friend in SD that I've reached out to, and if he has something better than the Fannie Mae product I'll update you.