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All Forum Posts by: John Quebedeaux

John Quebedeaux has started 0 posts and replied 26 times.

Post: What do you think? Flip it or skip it?

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Asking Price 46000

Rehab: 15,000

ARV: 85,000

Offer = (ARV x 70%)= 59500 - (Closing Cost+ Repairs + Holding cost)

85000 (ARV) X 70% = 59500 - Loan amount

85,000 X 14.99% = 12741 divided by 2 = 6370 (6 month interest reserves)

85000 x 5% (points) = 4250 + 2500 = 6750 escrow fees

59500( Loan Amount) –6750( Closing Cost) –6370( Holding Cost) –15000( Rehab Cost) = 31380

Purchase Price: 31380

46000- 31380=$14620 need to close deal

Post: First foreclosure rehab completed and rented

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Purchase Price: 30000

ARV: 90000 = (ARV x 70%) = 63000 - (+ Holding + Repairs Closing Cost($27,912.64)

Did you pay the 30 K cash with your own money or financing with 10% down for the HUD home?

What about the holding cost?

63000- 27912.64=35,088 equity in house

Let say your hold strategy if 40 K Mortgage.

625 Lease Rent for ONLY guaranteed of 2 years.

Example 40K =P/Y, 6% I/Y N= 360

PMT = 239.82

About $386 cash flow.

What is you IRR for the money you put in? How long will it take for you to recoup your investment of 30,000. $ 386 a month X 77.7 months = 30000 to break even.

Sell property now 63000- 27912.64=35,088 equity in house

35,088 - closing cost = PROFIT now.

 Just my thoughts

Post: Modular homes

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

I did the financing for them in my hey days. It is hard to get refinancing for them as a consumer. But I am sure a lot has change since then. If you do thing about senior citizen mobile park.

Post: Deal? If so I need help funding or options please!

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

I use to sit on HUD sub committee for foreclosure. Just wanted to share the process.

The foreclosure sale usually takes place at one of three possible sites:

1. The courthouse steps;

2. The trustee’s office;

3. The property (homeowner’s home).

The auction must take place, according to state law, on a regular business day. At the scheduled time, the home is sold to the highest bidder.

If a homeowner has already been notified of a sale date for their home, it is still possible for you, the LMP, to assist the homeowner in saving the home either by working with the lender, the trustee, or through some alternative method. Your level of success is based entirely on your willingness to take the necessary steps in order to help your client save the home from foreclosure.

DEFICIENCY JUDGMENT

Once a home is sold at auction, any proceeds from the sale are used to pay off the balance on the mortgage loan, including past due payments, late fees, attorney’s fees, etc. If the home does not sell for a high enough price at auction, then the mortgage lender may have the right to pursue a deficiency judgment against the homeowner for the repayment of any remaining balance.

However, not all states, allow this action. Check local foreclosure laws for specifics on deficiency judgments in the state(s) in which you are working.

RIGHT OF REDEMPTION
The Right of Redemption (same as “redemption right”) is defined as: The right granted in some states for a mortgagor (trustor, homeowner) to redeem ownership of real property, within a specified amount of time, after a foreclosure sale and upon payment of the amount of debt plus, interest, unpaid taxes and all costs incurred (arrearages, etc).

The redemption period (length of time) varies depending on the foreclosure laws in the homeowner’s state. Some states have no statutes allowing for mortgage redemption after the sale, which means, as far as they are concerned, the foreclosure sale is final.

State Security
Instrument
Foreclosure
Type
Initial
Step
Number of
Months
RedemptionDeficiency
AlabamaMortgageNon-JudicialPublication112 monthsAllowed
AlaskaTrust DeedNon-JudicialNotice of Default3NoneAllowed
ArizonaTrust DeedNon-JudicialNotice of Sale3NoneAllowed
ArkansasMortgageJudicialComplaint4NoneAllowed
CaliforniaTrust DeedNon-JudicialNotice of Default4NoneProhibited
ColoradoTrust DeedNon-JudicialNotice of Default275 DaysAllowed
ConnecticutMortgageStrictComplaint5NoneAllowed
DelawareMortgageJudicialComplaint3NoneAllowed
District of ColumbiaTrust DeedNon-JudicialNotice of Default2NoneAllowed
FloridaMortgageJudicialComplaint5NoneAllowed
GeorgiaSecurity DeedNon-JudicialPublication2NoneAllowed
HawaiiMortgageNon-JudicialPublication3NoneAllowed
IdahoTrust DeedNon-JudicialNotice of Default5NoneAllowed
IllinoisMortgageJudicialComplaint7NoneAllowed
IndianaMortgageJudicialComplaint53 monthsAllowed
IowaMortgageJudicialPetition56 monthsAllowed
KansasMortgageJudicialComplaint46-12 monthsAllowed
KentuckyMortgageJudicialComplaint6NoneAllowed
LouisianaMortgageExec.ProcessPetition2NoneAllowed
MaineMortgageJudicialComplaint6NoneAllowed
MarylandTrust DeedNon-JudicialNotice2NoneAllowed
MassachusettsMortgageJudicialComplaint3NoneAllowed
MichiganMortgageNon-JudicialPublication26 monthsAllowed
MinnesotaMortgageNon-JudicialPublication26 monthsProhibited
MississippiTrust DeedNon-JudicialPublication2NoneProhibited
MissouriTrust DeedNon-JudicialPublication2NoneAllowed
MontanaTrust DeedNon-JudicialNotice5NoneProhibited
NebraskaMortgageJudicialPetition5NoneAllowed
NevadaTrust DeedNon-JudicialNotice of Default4NoneAllowed
New HampshireMortgageNon-JudicialNotice of Sale2NoneAllowed
New JerseyMortgageJudicialComplaint310 DaysAllowed
New MexicoMortgageJudicialComplaint4NoneAllowed
New YorkMortgageJudicialComplaint4NoneAllowed
North CarolinaTrust DeedNon-JudicialNotice Hearing2NoneAllowed
North DakotaMortgageJudicialComplaint360 daysProhibited
OhioMortgageJudicialComplaint5NoneAllowed
OklahomaMortgageJudicialComplaint4NoneAllowed
OregonTrust DeedNon-JudicialNotice of Default5NoneAllowed
PennsylvaniaMortgageJudicialComplaint3NoneAllowed
Rhode IslandMortgageNon-JudicialPublication2NoneAllowed
South CarolinaMortgageJudicialComplaint6NoneAllowed
South DakotaMortgageJudicialComplaint3180 daysAllowed
TennesseeTrust DeedNon-JudicialPublication2NoneAllowed
TexasTrust DeedNon-JudicialPublication2NoneAllowed
UtahTrust DeedNon-JudicialNotice of Default4NoneAllowed
VermontMortgageJudicialComplaint7NoneAllowed
VirginiaTrust DeedNon-JudicialPublication2NoneAllowed
WashingtonTrust DeedNon-JudicialNotice of Default4NoneAllowed
West VirginiaTrust DeedNon-JudicialPublication2NoneProhibited
WisconsinMortgageJudicialComplaint2-3NoneAllowed
WyomingMortgageNon-JudicialPublication23 monthsAllowed

Reasons why people lose their home

A loss of an income, death in the family, medical expenses and other life-altering occurrences can happen to anyone, causing us to fall behind in our loan payments. If we neglect paying our credit cards it hurts our credit rating, but if we stop paying our home loan the situation is even worse, because the lender can foreclose, taking ownership the home. For most families, a home is not only a significant financial investment but also a source of pride. The loss of a home, due to unexpected events which leads to financial problems are most often associated with the following life changes:

*Death of a family member

*Illness

*Loss of job

*Cuts in work hours or overtime

*Retirement

*Injury

*Divorce or separation

Can be financially and personally devastating which can lead to emotion distress and crisis.

Post: Deal? If so I need help funding or options please!

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

I am from San Diego. Since this is not going to be your primary residence the rates will be base on Non Owner occupied residence . Need to ask  a mortgage brokers what that number will be if you choose to  go that route. Let me know I have one handy. Pick a property near your location. Do NOT be an Absentee owner of another state.  My brother in law is a electrical contractor who bought a property in Florida. He took a loss on that property. Stay around your area.

Post: Determining price you can pay

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Calculating Maximum Allowable Offer (MAO)

The formula we use for determining the most that you can pay for a wholesale-able or retail house is:

ARV – Rehab – B/S/H – Your Profit – Investor Buyer Profit=Maximum Allowable Offer (MAO)

After Repaired ValueMinus

Rehab Costs Minus

Buy/Sell/Hold Costs Minus

Profit EqualsMaximum Allowable Offer

**Note: if this is a house you are going to renovate and retail yourself (as opposed to wholesaling it “as-is” to another investor), then you'd simply leave out the "Investor Buyer Profit" in the above formula, since the only Investor involved is you.

ARV is determined using comparable sales or what is commonly referred to as "comps."Be sure to "drive" your comps to make sure they truly are comparable to the house you're considering.You want to make sure that the other houses are roughly similar in size, age, and style to the one that you are considering.You should use sales data that is no older than one year (the more recent, the better), nor more than one mile from the subject property. For even more accuracy, we choose to only use comps that are 1/3 mile away or less, with sales dates within the last six months.Sometimes, even the street can make a difference in the value of a property.If the only comps you have are on very nice streets, but the house you're considering is on a very "distressed" street, then you have to reduce the ARV.How much is an appropriate reduction is a judgment call on your part.You'll want to base that call on how much of a discount will be necessary to entice the final owner/occupant to buy this property over one they can get on the "better" street.

If the comparable sale that you are using is too different from the subject property, then it is of little value.If you use it in your sales marketing, you’ll lose credibility with your Investor Buyers.An example of a poor comparable is when your subject property is an old cottage fixer-upper, and you compare it to the sale of a brand new in-fill (an in-fill is a new house built on a vacant lot in an otherwise established neighborhood).

Rehab dollars vary according to level and detail of the job – everyone has a different formula.As a wholesaler, we suggest a middle-of-the-road approach for estimating enough rehab dollars to get the subject property to look like the comps.You'll need to spend more on rehab as the ARV increases.Logically,buyers like more ‘pretty-ness', higher-end fixtures, cabinets, etc. when they're paying $200,000 vs. when they're only paying $100,000 for a house.

Buy/Sell/Hold costs are all of the costs associated with:

üThe purchase (loan origination fees, title insurance, attorney fees, survey, appraisals, etc);

üThe sale (real estate agent commissions, marketing and advertising, closing costs paid by the Seller); and

üHolding the property (mortgage interest, utilities, taxes, insurance, etc.).

These costs vary greatly for each buyer, but our experience shows that a Buy/Sell/Hold cost of 15% of ARV (0.15 times the ARV) is a safe number to use.If you wholesale the property, you may never purchase the property.In this event, all of these costs are passed on to your Investor Buyer.Therefore, you can subtract your additional B/S/H costs from the MAO formula. Your Buy/Sell/Hold costs will not be 15% because you will not incur long holding times, nor pay real estate commissions, nor closing costs when you sell.You can probably use about $1,500 for your B/S/H for one of these deals, unless your cost of getting the financing was very high.

Profit is quite simply how much YOU want to make in the deal as well as how much you want to leave in the deal for an Investor Buyer.Your profit can range from $3,000 to $30,000 with a typical average in many areas of $5,000 - $15,000.You have to consider all of the costs you incur in marketing and processing all of the deals, along with the time you spend to get a deal, and determine what all that is worth to you.This will affect your MAO, so know your number before you negotiate.If you under-value your profit, it won't take long for you to realize the reward isn't worth the time and effort.If you over-value your profit, then you'll severely limit the number of deals you find.On the other hand, this profit determination is just for the MAO calculation.If you negotiate under your MAO, all that extra profit is yours to keep or to split with your Investor Buyer to make a wholesale deal more attractive.

Finally, remember to leave extra room in case you have to negotiate with your Investor Buyer and you do not get the price you anticipate.Also, sometimes title issues come up or other issues with the property that are easier for you to just pay for than to try to reconcile with all the parties.You want to have enough room to be able to handle those things.

The Investor Buyer’s Profit which we recommend that you build in (i.e. “leave on the table” for the investor) is generally $1.00 - $1.25 for every dollar of rehab, but not less than $10,000 nor much more than $30,000.For example, if your rehab estimate is $16,000, you’d leave $16,000 - $20,000 for the Investor Buyer’s profit.If the rehab estimate is $5,000, you’d leave the minimum $10,000 Investor Buyer’s profit.Finally, if your rehab estimate was $40,000, you’d leave the maximum of $30,000 for the Investor Buyer’s profit.

Once you have determined all of the numbers and do your calculation, you’ll have the Maximum Allowable Offer (MAO).This is the most you will pay for the house.It is the deal breaker.The stop point.The MAO is not where you start negotiating … it’s where you STOP negotiating.Every dollar you negotiate below the MAO is additional PROFIT in YOUR pocket.

We always say “go for the MIN-O: the Minimum Offer the Seller will accept."In other words, start negotiating well below your MAO, and work up if you have to.You can always add to the price you'll pay; but it's very hard to subtract once you've given the Seller a figure.

**Please Note:one thing that the MAO does not take into account is anything odd about the house that might make it harder to sell … things like a busy street, ugly surrounding homes, a nearby commercial property, etc.In these cases, you have to think about how much the final price will have to be reduced to get it to sell.Make sure you either reduce your ARV or increase your Investor Buyer's profit by that amount, thus appropriately reducing your offer to the Seller.

MAO Calculation Example:

Let's say that you did all of your homework, and decided that after evaluating all the comparable sales data, you've determined that the ARV for your subject property is $140,000.Based on your evaluation of the property, you determined it would take about $15,000 to get it to look like all of the comps.

To calculate the B/S/H, you take the $140,000 ARV, and multiplied it by 15% which equals $21,000 [$140,000 x .15 = $21,000].

You decided that your profit should be $10,000 as the Assignment Fee for a wholesale.The Investor Buyer’s profit is calculated by multiplying the Rehab costs by $1.25 to get $19,000 [$15,000 x $1.25 = $18,750].

Now, plug all these figures into the MAO formula and you calculate that the most you can offer on this property is $75,000.

ARV:$140,000

Rehab:$15,000

B/S/H:$21,000

Profit (you):$10,000Assignment Fee

Profit (buyer):$19,000

MAO$75,000

But you’re a great negotiator and the Seller agreed to a $71,000 purchase price. That means you just added $4,000 to YOUR profit – just by talking!

Please note:You may want to double-check your MAO formula with a much simpler, "big picture" formula:

Wholesale/Retail MAO should be:

60-70% of ARV minus Rehab Expenses

Finally, the formula we use for determining the most that you can pay for a property you are going to hold as a rental property is (in monthly figures):

Rent you will receive – Taxes/Insurance/Utilities that you will pay for tenant – Maintenance savings (6 – 10% of rent) – Vacancy savings (8% of rent) – Desired Cash Flow =

Mortgage Payment (Principal and Interest ONLY)

Post: Hello, I'm Tyrell Ferguson

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Welcome. My father was also in the Navy As Command Master Chief. Since you are in the Navy Look into your VA Loan options.

Post: Most Recent Flip, $58K Profit, Pics and Numbers

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Great  job. Can you post your number in the format below . I like to see how it was structure.

Calculating Maximum Allowable Offer (MAO)

The formula we use for determining the most that you can pay for a wholesale-able or retail house is:

ARV – Rehab – B/S/H – Your Profit – Investor Buyer Profit=Maximum Allowable Offer (MAO)

After Repaired ValueMinus

Rehab Costs Minus

Buy/Sell/Hold Costs Minus

Profit EqualsMaximum Allowable Offer

**Note: if this is a house you are going to renovate and retail yourself (as opposed to wholesaling it “as-is” to another investor), then you'd simply leave out the "Investor Buyer Profit" in the above formula, since the only Investor involved is you.

ARV is determined using comparable sales or what is commonly referred to as "comps."Be sure to "drive" your comps to make sure they truly are comparable to the house you're considering.You want to make sure that the other houses are roughly similar in size, age, and style to the one that you are considering.You should use sales data that is no older than one year (the more recent, the better), nor more than one mile from the subject property. For even more accuracy, we choose to only use comps that are 1/3 mile away or less, with sales dates within the last six months.Sometimes, even the street can make a difference in the value of a property.If the only comps you have are on very nice streets, but the house you're considering is on a very "distressed" street, then you have to reduce the ARV.How much is an appropriate reduction is a judgment call on your part.You'll want to base that call on how much of a discount will be necessary to entice the final owner/occupant to buy this property over one they can get on the "better" street.

If the comparable sale that you are using is too different from the subject property, then it is of little value.If you use it in your sales marketing, you’ll lose credibility with your Investor Buyers.An example of a poor comparable is when your subject property is an old cottage fixer-upper, and you compare it to the sale of a brand new in-fill (an in-fill is a new house built on a vacant lot in an otherwise established neighborhood).

Rehab dollars vary according to level and detail of the job – everyone has a different formula.As a wholesaler, we suggest a middle-of-the-road approach for estimating enough rehab dollars to get the subject property to look like the comps.You'll need to spend more on rehab as the ARV increases.Logically,buyers like more ‘pretty-ness', higher-end fixtures, cabinets, etc. when they're paying $200,000 vs. when they're only paying $100,000 for a house.

Buy/Sell/Hold costs are all of the costs associated with:

üThe purchase (loan origination fees, title insurance, attorney fees, survey, appraisals, etc);

üThe sale (real estate agent commissions, marketing and advertising, closing costs paid by the Seller); and

üHolding the property (mortgage interest, utilities, taxes, insurance, etc.).

These costs vary greatly for each buyer, but our experience shows that a Buy/Sell/Hold cost of 15% of ARV (0.15 times the ARV) is a safe number to use.If you wholesale the property, you may never purchase the property.In this event, all of these costs are passed on to your Investor Buyer.Therefore, you can subtract your additional B/S/H costs from the MAO formula. Your Buy/Sell/Hold costs will not be 15% because you will not incur long holding times, nor pay real estate commissions, nor closing costs when you sell.You can probably use about $1,500 for your B/S/H for one of these deals, unless your cost of getting the financing was very high.

Profit is quite simply how much YOU want to make in the deal as well as how much you want to leave in the deal for an Investor Buyer.Your profit can range from $3,000 to $30,000 with a typical average in many areas of $5,000 - $15,000.You have to consider all of the costs you incur in marketing and processing all of the deals, along with the time you spend to get a deal, and determine what all that is worth to you.This will affect your MAO, so know your number before you negotiate.If you under-value your profit, it won't take long for you to realize the reward isn't worth the time and effort.If you over-value your profit, then you'll severely limit the number of deals you find.On the other hand, this profit determination is just for the MAO calculation.If you negotiate under your MAO, all that extra profit is yours to keep or to split with your Investor Buyer to make a wholesale deal more attractive.

Finally, remember to leave extra room in case you have to negotiate with your Investor Buyer and you do not get the price you anticipate.Also, sometimes title issues come up or other issues with the property that are easier for you to just pay for than to try to reconcile with all the parties.You want to have enough room to be able to handle those things.

The Investor Buyer’s Profit which we recommend that you build in (i.e. “leave on the table” for the investor) is generally $1.00 - $1.25 for every dollar of rehab, but not less than $10,000 nor much more than $30,000.For example, if your rehab estimate is $16,000, you’d leave $16,000 - $20,000 for the Investor Buyer’s profit.If the rehab estimate is $5,000, you’d leave the minimum $10,000 Investor Buyer’s profit.Finally, if your rehab estimate was $40,000, you’d leave the maximum of $30,000 for the Investor Buyer’s profit.

Once you have determined all of the numbers and do your calculation, you’ll have the Maximum Allowable Offer (MAO).This is the most you will pay for the house.It is the deal breaker.The stop point.The MAO is not where you start negotiating … it’s where you STOP negotiating.Every dollar you negotiate below the MAO is additional PROFIT in YOUR pocket.

We always say “go for the MIN-O: the Minimum Offer the Seller will accept."In other words, start negotiating well below your MAO, and work up if you have to.You can always add to the price you'll pay; but it's very hard to subtract once you've given the Seller a figure.

**Please Note:one thing that the MAO does not take into account is anything odd about the house that might make it harder to sell … things like a busy street, ugly surrounding homes, a nearby commercial property, etc.In these cases, you have to think about how much the final price will have to be reduced to get it to sell.Make sure you either reduce your ARV or increase your Investor Buyer's profit by that amount, thus appropriately reducing your offer to the Seller.

MAO Calculation Example:

Let's say that you did all of your homework, and decided that after evaluating all the comparable sales data, you've determined that the ARV for your subject property is $140,000.Based on your evaluation of the property, you determined it would take about $15,000 to get it to look like all of the comps.

To calculate the B/S/H, you take the $140,000 ARV, and multiplied it by 15% which equals $21,000 [$140,000 x .15 = $21,000].

You decided that your profit should be $10,000 as the Assignment Fee for a wholesale.The Investor Buyer’s profit is calculated by multiplying the Rehab costs by $1.25 to get $19,000 [$15,000 x $1.25 = $18,750].

Now, plug all these figures into the MAO formula and you calculate that the most you can offer on this property is $75,000.

ARV:$140,000

Rehab:$15,000

B/S/H:$21,000

Profit (you):$10,000Assignment Fee

Profit (buyer):$19,000

MAO$75,000

But you’re a great negotiator and the Seller agreed to a $71,000 purchase price. That means you just added $4,000 to YOUR profit – just by talking!

Please note:You may want to double-check your MAO formula with a much simpler, "big picture" formula:

Wholesale/Retail MAO should be:

60-70% of ARV minus Rehab Expenses

Finally, the formula we use for determining the most that you can pay for a property you are going to hold as a rental property is (in monthly figures):

Rent you will receive – Taxes/Insurance/Utilities that you will pay for tenant – Maintenance savings (6 – 10% of rent) – Vacancy savings (8% of rent) – Desired Cash Flow =

Mortgage Payment (Principal and Interest ONLY)

Post: Real Estate Courses

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Never heard of it. Are you looking to get a license on line with a real estate course. If you do make sure it is accredited.

Post: Accountant says don't invest! Confused.......

John QuebedeauxPosted
  • Real Estate Investor
  • San Diego, CA
  • Posts 27
  • Votes 58

Never give up your dreams. The real estate market is an up and down market. We are in a down market and houses prices are staring to increase in 2015. Look at short sales!