All Forum Posts by: Stephen Masek

What happens if the lender calls the loan on that Condo?

Did you file a UCC-1 on the loan to the contract buyer? You may not be able to enforce it if they stop paying.

When was it built? Asbestos, or lead-based paint may be issues which could work to your favor, or be reason to look elsewhere.

You may also want to contact the building department, as some areas make people bring buiuldings up to current code if the work done on them exceeds a certain percentage of value.

A few days ago we asked a management company in Memphis for a quote, and they wanted a full month's rent (capped at $1,000) to lease a property and 12% of the rent! That is the highest quote for property management we have ever encountered!

The manager we have in Memphis uses a plumber and an electrician for routine repairs. That is good from a quality viewpoint, but makes the repairs somewhat more expensive than companies with good handymen doing such work. However, they only charge 6%. We'll still consider switching, but not to a real estate agent with tremendously high fees!

People who charge less can and often do provide superior quality and low prices. I own just such a company (this is not an ad, just an example). Yesterday we won a state highway department bid for $55,000, when the high bid was $180,000. It is the 13th such contract we have won, and we are happy with the money we make on them. We produce top quality reports, but are very efficient and keep overhead low.

Anybody know a good insurer for out of state landlords in Atlanta? We bought policies with Safeco, and they now want to cancel them because we are out of state owners, something they knew when we obtained the policies! Incompetence is high and rising fast in our society.

Ryan, it is indeed fun to buy houses with cash. I started buying cars with cash quite a few years ago, and buying houses with cash is even more fun. Perhaps the next step will be buying an apartment building with cash.

My wife and I recently attended an investment seminar / meeting and were simply amazed at many things we heard. They all fit under the general category of ignoring risk. You could also call it creating houses of cards.

The event started very well, with a nicely prepared review of current market and economic conditions. One of the points made then was that cash purchases are now a high percentage of overall purchases.

One speaker, supposedly an expert, flatly stated that people buying with cash are stupid or lazy. My wife and I are now cash buyers. The data presented at the start of the event indicated that there are many, many others now buying with cash. Are all of us stupid or lazy? I think not!

One of the schemes mentioned by that same speaker was a wrap lease. It is done by leasing a property, then subletting it. He mentioned one person taking in $1,000 per day profit doing it. That means they have leased and subletted numerous properties, probably in violation of most all of the original leases. How many of them have to go vacant at once for them to go BK? What combination of vacancies and units being badly damaged by sub-tenants would make them BK? How many actual owners enforcing the lease terms and requiring that the subletting end would put them under? Perhaps they have plenty of reserves, or perhaps they are hoping that noting goes wrong.

Both speakers were advocating using SDIRA funds to operate as a lender to investors. The second supposed expert indicated that flipping could not be done within an SDIRA, as it would be subject to the unrelated business tax. Neither addressed the obvious issue that operating a lending company also seems to be an unrelated business.

It seems that very few "experts" pushing investment approaches advocate dealing with risk in a professional manner. First, by determining the probabilities of various negative events and combinations of events. Second, by determining the impact of those events or combinations of events. Third, by then developing a matrix of risk vs probability. Calculated risks vs wild gambles that nothing will go wrong are two very different things.

By the way, we have used loans, but always had plenty of reserves to handle various combinations of vacancies, multiple vacancies, rent reductions, and repairs. We sold when we saw rents going down and real estate prices going crazy. We had no idea of the extent of all of the crazy things which were happening on Wall Street and all of the big banks, but it was not luck. We gathered what information we could, and determined that the risk had gone beyond our maximum limit.

In our case, my wife and I own a corporation. We have always tracked contributions to retirement accounts as such. The corporation also uses cash accounting.

We closed on a 4 bedroom, 2.5 bathroom, 1,648 square foot house built in 1999, with a one acre lot for $104,395.08 total cash in an area with good schools on May 25. It needs nothing, as the seller had painted it inside and out, and put in nice quality carpet. Perhaps is was children selling their parent's house? The price seemed too low for the seller to be a flipper.

We are set to close on June 15 on a foreclosed 4 bedroom, 3 bathroom (one bath and bed separate over the garage excellent for a college kid or...), 2,248 square foot house built in 2001 in an area with good schools for $111,500 plus some closing costs and $2,000 in repairs (one furnace, two ceiling fans, some shrubs, a piece of trim).

Both are priced way below construction cost.

We'd like to buy one more newer house in Las Vegas, but doubt we'll find anything until the forclosures resume in Nevada.

We're researching tax deed sales and flipping in California.

I'm finishing the restoration of a Western Air Patrol (California Western Auto) W492 console radio with a colorful mirrored dial, top of the line in 1936.

In many places the parcel number (with all of the required digits, including zeroes) is all you need to find it online. He can also just go to the assessors office if he is in the area.
A good surveyor will be needed to locate the boundaries. Do not trust existing fences and so forth, as they could be way off.