All Forum Posts by: Don Konipol
Don Konipol has started 221 posts and replied 5493 times.
Post: Did Brandon Turner really lose $14M of investor money while pocketing $4.4M???
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Even on a $66 million purchase, pocketing $4 million upfront seems excessive.
My personal bias is that a sponsor should collect no profit upfront - covering direct costs may be okay, as well as the sponsor having an affiliated entity collecting a fee for services rendered.
As an example of the ladder, in our syndicated EQUITY deals (most of our syndicated deals are debt investments not equity investments ) a separate entity I own holds real estate brokerage licenses in three states. When that entity acts as broker it accepts a broker fee. However, we discount the broker fee to two points if we are on one side of the transaction. Any thing above that collected from the counter party is credited to our syndicated investment LLC.
If syndicator in this case received $4.4 Million upfront for say putting the syndication together, this would be pretty extreme. Sponsor will usually accept “promote” in “units”, in other words equity participation, sometimes only collectible AFTER passive investors receive all their investment back. Sounds like Mr Turner decided that putting together and raising the capital was sufficient to reward himself $ millions regardless of the ultimate success or failure of the investment. In Jersey the Sapranos would refer to it as a “no show” job.
Just to be clear the same goes on with public corporations all the time.
Post: Advice on entering the wholesaling world full time
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Joseph Kirk:
Hi everyone, im looking to take wholesaling seriously and become my main stream of income. Over the past month or so, i'd occasionally cold call by myself, with the only paid software of propstream. I'd export lists, look up the numbers, and call on my phone. At this point, im looking to do this full time and 100x more efficiently.
My thoughts:
-I want to hire 1 VA for cold calling and tracking everything and whatnot.
- I want to keep propstream for specifically pulling lists (i think?)
- I want to get REIsimpli for CRM and use that for staying organized and also considering using their dialer, instead of something like Mojo Dialer so its all on the same platform?
- Would also like to do direct mail, and even text message campaigns. Not sure what software but ideally would like to use a total of 2-3 softwares so im not all over the place.
I feel like im at least slightly knowledgeable with this, but I'm just lost on how to go about it all and get started with the proper steps and software.
I would really appreciate it if anyone who's currently successful in the industry could give me some pointers on:
- the most efficient software to use
- the proper order to go about all this, if there even is a proper order?
- If im thinking about this properly or if im missing something?
1. You are entering a full time business - not “investing”. Entrepreneurial, managerial, technical, and operating experience, knowledge and talent is paramount for a successful small business.
2. You have not mentioned INBOUND Marketing as one of your marketing strategies. The absolute best lead quality is someone who contacts you directly. SEO for your website / landing page leading to a first page GOOGLE search result based on gearing toward a very narrow specialized niche.
3. The above supplemented with pay per click advertising program to generate sellers meeting your parameters, in other words QUALIFIED leads.
4. Capitalization - the successful wholesalers I know spend $10k per month on marketing. They tell me anything less doesn’t allow them to obtain “critical mass”. Since it will probably take minimum of 6 months before approaching break even, and you’ll need to pay up from for website design, initial SEO, etc., you would need at least $75k capital (some of which will remain in reserve as a “cushion”) to have a decent shot at success. The people I know who attempted to “bootstrap” there way into wholesaling ( in the last 10 years) ended up either quitting in total failure or working two years for about $5 / hour and creating nothing of value.
5. Although wholesaling is a business, there is no typical business “exit strategy” as I know of no wholesaling businesses that were sold for anything close to what another type business would sell for.
Post: Loan discrepancy. I think i overpaid into my property!
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Daryl Allen:
Ok to start things off .
Im buying my raw land for $30k. Paid $15k upfront to initiate the contract. Heres where it gets fun. It’s at a 7% amortized interest rate. Signed on april 2022. Ive been making monthly payments of $265 at the least. My required payments were $235. However for the first 5 months i was able to pay via zelle with no fees. Then i get asked to switch to terra notes and have been paying through them since sept 2022. I noticed after about 1 year of app paying they never applied my zelle payments. So i ask for them to update it so it reflects correctly. They never did. So i continue to pay via requested app to today still. Well the other day i noticed still no update, and the extra i have been paying towards principal has been being taken as a service fee. So i compiled a list of these service fees and some taps a $60.75 mark. Well. All the service fees add up to $1318.76 that wasnt ever applied to my principal. So that leaves the $1300 from zelle payments and the $1318.76 from fees that should have went to my principal. Ran it through the usual Google machine and a paid chat gpt and both said i should already be paid off and entitled a refund . Can a Human please help me? I am living off of 366 a week of unemployment for the time being so i cant afford a lawyer
Post: Tenant Lawsuit Over “Equity” and Right of First Refusal – Looking for Advice
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Paul Schmidt:
Hey everyone,
I bought a duplex in Dayton, Ohio in Sept 2024 that came with an existing tenant. The inherited lease had a strange clause:
- The tenant had a right of first refusal to match any bona fide offer before lease-end, and
- Rent and upkeep expenses (like mowing) would count toward the purchase price if he bought the property.
In Nov 2024, I told the tenant I wouldn't be renewing the lease (ending April 2025). Instead of moving out, he sued me and my LLC (pro se), claiming:
- Breach of contract, promissory estoppel, specific performance, declaratory and injunctive relief,
- Plus $15K in “equity”, arguing that rent and expenses made him a tenant-in-common.
He also claimed a right to renew, though the lease clearly said renewal required mutual agreement. He initially added a Fair Housing claim (based on me seeing menorahs in the unit) but dropped it later.
My attorney filed a motion to dismiss, but it was untouched in court for 5 months. The tenant then amended his complaint, forcing us to refile. Meanwhile, my attorney recommends holding off on eviction until the civil case wraps up, since the eviction would likely be stayed anyway.
Legal fees are around $5K so far, and the tenant’s messages have become harassing, including threats like:
- "If I have to sue you and your Llc, it will tie you up in court for 1 to 2 years. You can avoid this by working with me and being sensible. What are your thoughts on this? You can either be a man and work out a deal or be foolish and spent tons of money and time and lose control of the property all for your ego... You can either sacrifice a little money or let me stay for another year or get tied up in a 1 to 2 year court battle that you can't win."
- "Be a man, Paul, not a weakling. Discuss this with me like an adult. Come to a win win or fail. Maybe you don't get it. I've worked in the law profession for over 20 years. I know my rights and how to protect them. Do the right thing Paul, or face the system."
- "Don't trust your Legal Shield attorney. She is incompetent.... Her law school testing results were awful."
Questions for the group:
1. Would you wait on eviction or file anyway?
2. Any chance of recovering attorney fees in this type of case?
3. Would a counterclaim or declaratory action help clear this up faster?
Appreciate any insight — especially from Ohio landlords or anyone who’s dealt with a tenant turning a lease clause into a lawsuit.
So this is a perfect example of how what’s merely day to day operations for a large organization is a time consuming, aggravating all consuming issue for the small investor.
Post: property assessed improvements but no idea why
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Simon Davis:
Hello
I am asking this for my neighbor. She recently lost her husband and is taking care of all the finances herself which the husband used to do. She showed me her property tax statement and was surprised the tax is so much. I read the statement and it says she bought the condo for $x which she agrees with. But then there is something called improvements, and the improvements is just as much, making the assessed value $2x. she has no idea how this could be. She says she remodeled her kitchen a long time ago but never got a permit from the city and there is no way the city would know. besides, based on my preliminary research, remodeling a kitchen doesn't cause a reassessment anyway. There has been some work done on the building over the years, nothing major. The hoa supposedly improved the elevator (which made it worse by the way), they painted the exterior. Nothing that would really improve the lives of the tenants. Could these be why city is assessing $x in improvements? She was going to pay it but I told her let me research this for you. I think it's ridiculous. what can be done? if we fight the city, is there a risk that they will assess even more ("we investigated and realized not only is the improvements worth $x, it's actually worth $x + $100,000").
Actually, the improvements portion of a tax bill represents building value, the base portion represents land value. In real estate terminology anything built and a fixed to land is called improvements.
Post: Did Brandon Turner really lose $14M of investor money while pocketing $4.4M???
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Like almost all social media innovations, BP was (is) heavy on tech - but the real estate personnel are mostly “lightweights”.
This was obvious 15 years ago, but BP was still made into a valuable resource. Especially for the newer investor hoping to learn the basics of investing in SFR.
The fact that some people had a personal side agenda shouldn’t be surprising. Contrary to Barry Minkow ( whom I believe is a career criminal) most deals gone bad are not fraud; they’re usually the result of a “surprise” in the market/economy, undercapitalization / over leverage, or less than competent management/organizers. The ones that are fraud from the beginning, like Minkow’s ZZZZ Best, are a rarer occurrence.
Here’s what I want to know when investing as a passive investor - is the head person a techie, a “salesperson” or a specialist in the particular type of investment being offered. If the first or second, I’m out no matter how good the numbers look.
This is of course no guarantee of successful investment. But I want to eliminate the obvious highest risks.
Post: Looking for structuring ideas
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Frank Harrington:
So I came upon a property. Easy ARV in L.A. neighborhood is roughly 750k. I can get property for 450k.
I don't want to put any money down. What is the best way to structure this so that I can get a good refinance loan in 6 months once I have fixed the property up? Should I have the owner carry the note for 6 months, or at least carry a 2nd for 20% of sales price so I could use conventional lending? Will the seller carrying the full note for the 6 months even count for traditional lenders now as far as seasoning goes? It used to be 6 months from sale would be good enough (30 years ago).
I could go hard money, but I would want to watch the pre-pay penalty, points and interest.
I will most likely hold onto the property for 2 years as residence if I don't use hard money.
Under the right circumstances a seller may be inclined to sell with 100% financing. Almost all 100% seller financing transactions I’ve witnessed fall in to one or more of the following categories
The seller is willing to provide 100% financing because:
1. The sale price of the property greatly exceeds REAL fair market value
2. The seller is desperate - usually because the subject property is difficult to sell, in poor condition, or in a”war” zone
3. The buyer is receiving 100% financing but putting up significant additional collateral.
With the amount of information readily available these days, the number of attorneys willing to take on almost any case, and activist consumer laws and regulations. any strategy that relies on anything other than “adding value” probably doesn’t have long term viability.
Post: What Strategies Do You Use to Value & Sell Performing Notes?
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Victoria OHare:
Hello Everyone,
I’ve been focusing lately on buying and selling residential mortgage notes, particularly first-position, performing notes. I'm curious to hear how others in this space are valuing and exiting notes.
A few discussion questions:
-
What metrics do you weigh most heavily (LTV, payment history, discount rate, etc.)?
-
When do you decide to hold a note vs sell it?
-
For those who sell, how do you find buyers and structure closing?
Happy to share what I look for as a note buyer too, if that’s helpful for others.
The first thing I look at is the ROI - yield to maturity. So I calculate what my annualized return would be based on the current payments, term of the loan and asking price. If the yield/return does not meet my minimum requirement I’ll try to determine the probability that the seller will accept an offer at a price that does provide my minimum ROi.
Assuming the above is positive, I will utilize all available information; LTV, property type, specific geographical market, payment history, etc. to determine if the note fits into my acceptable risk parameters. If it does we’re good to move forward. If not, I decide if there is a minimum ROI for which I am willing to accept the risk.
Non performing notes are a little different. I divide those into two parts. First is the notes that with restructuring can be made performing. Those follow the above criteria, albeit with a much higher minimum ROI. The other part are those that will result in property ownership. That’s a whole different set of parameters.
Post: Assisted Living Motel Conversion
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Joseph Bushnell:
This is a weird one for me, I have a friend that wants me to help him convert his motel "with restaurant attached" into an assisted living facility. Currently I am having a hard time finding reasons that it wont work and I feel like we are missing something obvious.
Any help would be great!
Post: Cold Calling Campaign for Land Deals
#1 Innovative Strategies ContributorPosted - Lender
- The Woodlands, TX
- Posts 6,266
- Votes 9,904
Quote from @Gabriel Romero:
I am relatively new to cold calling and am now focusing on land deals throughout the US. I have completed one wholesale deal in another niche but am transitioning to land. Can anyone recommend a good script for cold calling land owners or at the very least, a general script to call property owners? Does anyone on here also have a good Wholesale Contract and a Purchase and Sales Agreement that work in unison to complete a deal?
Your help is greatly appreciated!