All Forum Posts by: Evan Wiesner

@Qwesi McCray they are just normal brokers but they have earned a designation and belong to a group who has dealt with primarily REO sales over the last decade. Because of that they have a great ability to work with unique situations and I've found their knowledge base to be beyond that of the typical real estate agent.

That's not a knock on other agents, but if you're investing out of state it's good to know that the broker you're working with has had to handle some remodels and find contractors for repair work in the same manner a bank would expect their brokers to. Hence there are some commonalities that they bring to the table.

@Maria McGary there are a lot of answers to this based on the situation. The safest assumption is that yes, it's attached to the home and needs to be satisfied if you're going to buy the property. Assuming that you're going to either flip the home or at some point want title insurance, there needs to be a resolution before you'll be able to get a warranty deed on the property (at least without an exception).

There are variables to this of course, they don't last forever without the IRS refiling so the timing is important. Divorce and other circumstances or agreements can be struck in which the property is released but no document recorded. That's why I'll stick with the safe answer, it's probably attached still.

@Warren Lanza the short answer is that there's a limited buyer pool. Almost anytime in real estate you limit the available or interested buyers your value decreases.

In my experience the 55 and older communities are dangerous investments because the buyers are not only limited, but they don't always seem to buy under conventional thought processes. We've had the nicest property, in the best location, and at the best price, and have watched many other properties sell instead because of the "feel" of the property. This is less of an issue when the pool of buyers isn't restricted because someone always seems to like how our remodels work out. That's not to say that you can't make great money investing in them, but I'm always more diligent when deciding to pull the trigger.

@Carlos Gonzalez In my opinion you are in the motherland for hard money so if you're using conventional financing options you're probably going to lose out on some deals. And an inspector is not a bad thing to have on your side but not necessary if you have someone on your team who has some real construction experience. That's probably more of an asset.

@Jay Hinrichs I only meant to say that there are HML's who will set up less conventional methods of securing their interest. In most cases they really are more private money lenders, but they will call themselves HML's. I've ran into many a deal where the financing wasn't secured with a standard deed of trust recorded on the property, but we had to find a way to pay it off in order to purchase the property. And absolutely there are very big players in this space, but the little ones can be very creative.

The point was simply that people should do their homework. A reputable and decent size operator will do everything by the book, but someone with a lot of money can call themselves a HML and do things on a little different plane, sometimes not for the best.

Jason,

There's a whole can of worms to discuss there. First, offer what you believe is a valuable offer for the condition of the home and circumstances surrounding it.The lender reviewing the offer will have their own appraisal or BPO done and likely won't accept less than 82-86% of that number. It's anyones guess what that number is going to come in at, so if you're fair, you stand a better chance of a strong negotiating position.

Always have an inspection contingency, and it's not a bad idea to specifically indicate that it goes until X number of days after bank approval. Granted, that should be a given in any state but I still make sure to write it in. 

The tenants, if there are any, should be out prior to close of escrow unless you want to develop a relationship with them or come to some other arrangement. Writing into the contract that it's contingent upon a written agreement between you and the tenant on an acceptable move out after closing is fine, I would suggest finding a good local attorney to draft a stipulated judgement in that case and you may need to be ok with cutting them a check for a small cash for keys at move out.

Other than that, cover yourself for any unforeseen circumstances. If you think of something due to the owner or tenant that may cause a problem, make sure you have an out for it. The inspection period is the best and and agreement for the tenant is great, but each SS is unique and it's always good to be prepared.

Good luck!

If you're going to invest in any market you don't live in or know intimately you really need a local partner. They don't have to be a capital or financial partner in any way, but they need to be compensated by the deals in a way that makes them interested in your success and they need a local knowledge base that is deep enough to compensate for you not knowing the area. A base knowledge of remodels is great as well. I've had great success working with members of the national REO brokers association. They typically spent years managing smaller remodels for banks and have the local market knowledge and connections to help get deals and get things done.

On an owner carry you are closing on the home in a normal transaction, just setting up a financing option where you pay the former owner each month. So to back out they would have to foreclose on you. But they can't as long as you keep paying. 

You aren't starting the remodel until after you close on the purchase. Then once your done with the remodel you list and sell and the escrow company simply gets the payoff from the former owner. If you can use the same escrow company on both ends you can make it really easy by getting a pass-through title policy and they'll already have access to the payoff from the servicing company they sent it to originally

You'll need an offer signed by the owner before the bank will even consider it. So the owner first and then hope that the bank isn't going to require a couple weeks of advertising to prove that the offer is market value.

Good luck John!

One method is to write your offer with a contingency during the inspection period of coming to a written agreement for occupancy with the tenant. It's a little tricky to write but I've been successful in negotiating stipulated judgements for occupancy prior to the end of an inspection period. The short version is that we offer the tenants cash to move out within 7 days of our successful close of escrow. On a short sale sometimes we will give them a percentage of that cash upon acceptance by the bank. The reason we use a judgement instead of another agreement is that is drafted by our legal representation in that state to specifically avoid the eviction process. It's not flawless, but it's a stronger agreement than something I would write up on a word document. Once we close they are required to be out, and broom sweep the property. That way our cleanup is minimized before we start the demo as we are a fix and flip company exclusively.