All Forum Posts by: Don Konipol

If the homeowner can't pay on the original note, why would he be able to pay on the note the second time around?

Properties that are listed on MLS are available for all to see, a third party intermediary asking for a fee adds no value to the process. However, a third party finding a good deal that is not generally known to be for sale may indeed be worth a finders fee.

Starting down the path with a misleading or fraudulent ad is not heading in the right direction. Any short term gain will be negated by longer term negative consequences. In a business where few people are 100% honest, those that are honest in all their dealings are rewarded with loyal clients, partners, investors and transaction parties.

In 1999 I purchased a property built as an automotive repair shop in which the owner had been dumping motor oil out back for the past 15 years. I obtained 3 estimates from registered environmental clean up companies. the bids were $45,000, $48,000 and $3000. Being suspicious of the low bid, I contacted the Texas Natural Resource Commsion, spoke with the director and bought him lunch. Over lunch he told me the the company with the $3000 bid was the best one, they just were completely honest. I submitted a low ball offer to the court - the property was in bankruptcy. The court wouldn't all the trustee to accept my offer. I then submitted a slightly higher offer with the 2 high bids for environmental cleanup. The offer was accepted. I ended up paying $125,000 for the property. I contracted with the clean up company, after they finaished and the property passed an independent environmental test I was billed $2250, or $750 below esitimate. I promptly leased the property to a tenant at $3000 per month triple net. A couple months later the tenant offered to purchase the property cash at the appraised value. We agreed on an apraisor who valued the property at $310,000. We clsoed the sale at this price. This was one of two killer deals I profited with investing in properties with environmental problems.

50 states and the District of Columbia all have tax sales or tax certificate auctions, and all 51 are different. Some are similiar to others, but the details differ and to successfully invest (or speculate) you must be familiar with all the laws, rules, regs in the state your bidding in. when you speak of a % yield, your probably speaking of tax lien certificates. the best book I have found on the subject is "The 16% Solution" by Joel S Moskowitz.

The key here is that it is priced at full market value with no motivating reason or need for a quick sale. the only way to make money as a middle man is to find a property way below value and sell it less below value. Sounds like this seller needs to go thru a couple of 6 month listing periods without results before he'll even think of selling to a wholesaler.
On the question of proof of funds, each case is different, however any seller would be foolish to tie up the sale of his property with someone who can't and ultimately won't close. After 30 + years as a real estate investor, I have come to the conclusion that most wholesalers are nothing more than intermediaries without a real estate license. The seller can get better results and representation from a good solid broker with whom he can establish a long term relationship.

What your describing is a classic case of chasing a series of unmotivated sellers. After 7 months it is probably time to see if there are other houses available that you can buy. In the past I hve been in the same position as you except that it was commercial property. The seller (s) were using my offer as bait to entice a more desirable offer from other buyers. sounds like your offer is good enough to be dangled as bait but not good enough to be accepted.

Go to the Scottsmans Guide website and run your parameters thru their residential matrix. You should come up with a bunch of lenders (not mortgage brokers) that lend matching your criteria.

I have had only one experience with property condemnation, but it proved the value of a good attorney. Property was valued at $3 million, gas pipeline wanted about 5% of property so offered $150,000.00. My attorney suggested we hire an MAI appraisor and we convinced the appraisor this 5% land loss would decrease value significantly since potential plans for a shopping center would have to be terminated due to lack of parking as a result of land loss. We ended up getting $625,000.00 after 2 years of negotiating and court hearings.

Any valid lien on real estate is ahead of ownership in a foreclosure sale. theoretically any overage at the sale - in excess of superior liens, taxes, legal costs, back interest, renewal fees, and any other expenses paid by superior lienholder would go to holder of inferior lien. however, most property at foreclsoure sales sell far below current value; the sale is cash only without title policy, so that investors at the sale are looking for a large discount. If nobody bids the amount of the foreclosing lienholders interest then the lienholder will usually bid in a higher bid, at or below the amount he's owed and obtain ownership of property. Except in cases of property with enormous equity, it has been my experience that inferior liens are wiped out at foreclsoure.
The inferior lienholder can somewhat protect himself by having a note acceleration clause in the deed of trust, and should the debtor begin missing payments to the superior lienholder the inferior lien holder can foreclose.
Of course this foreclsoure does not wipe out a superior lien, and the superior lienholder can still foreclose and thus wipe out the inferior lien.
However once the inferior lienholder does foreclose, he can then pay off the superior lien.