All Forum Posts by: Account Closed

@Isaac Moore Tell me more about how this works. The link doesn't work.

@Julie Hicks I am currently looking at a 25 Unit apartment building for $2.2MM that has positive cash flow, and the seller is willing to carry 35%. 

I am still putting my partners together on this one, but does your company take owner carry on the first 25% and provide financing for the remaining 75% LTV?

Do you do financing of this size and what is your turnaround time?

@Jason Hirko Thanks Jason. I was a Loan Officer and I am very familiar with what you speak. I am assuming that with the hot market in Texas, any house that is currently worth $52,000 was not an expensive house 15 years ago and probably wouldn't support a large loan amount. If the owner doesn't know her interest rate, she is an unsophisticated borrower and likely is paying well above normal interest rates.

@Kelly Conrad Over the years I looked at a few but like this one, they were a tear down & rebuild. When I ran the numbers and timetable, I figured that I could could do two rehabs in the same amount of time for about the same amount of money. I passed on everyone of the fire damaged ones. I did a crack house or two but with no fire damage. Some of it depends on how easy it is to get permits. It looks like an older building so I'm not sure about the plumbing and wiring on the other side and whether that may as well be upgraded at the same time, whether it is on city sewer or septic, things like that. But, you'll never get the burned smell out unless you remove anything the smoke touched. It makes it very hard to sell if the smell is there.

@Samantha Maloney When investors get multiple yellow letters, they all get thrown into the trash. It looks too canned. You are better off finding the "turkey" in the group, focusing on that one, mailing about that address and while discussing just say "do you have any other properties you might be interested in selling". Let them bring the properties up.

@Kelly Conrad It takes so much to get the smoke smell out, that it may not be the deal you think it is.

@Jeffrey Nordin Congratulations on jettisoning the ol' W2. However, you will find that being 1099 will make borrowing money to buy properties very difficult. I see a few solutions though, 

1) You already have a ton of cash stashed and don't need banks or

2) You have relatives or friends who will finance your projects or

3) You understand Hard Money and how it works or

4) You will be partnering and doing Joint Ventures or

5) You will be doing Subject To, so you don't need banks or

6) You have one amazing printing press that spits out $100 bills like candy (I don't recommend this one)

And, by the way, Phoenix, Mesa, Salt Lake, Austin and a whole bunch of other places are better places to invest for safety and return than SoCal right now. IMHO

@Bara Nwokoma Hmmm, Principal and interest on $50,000 for a payment of $710 is 18% interest. What am I missing here?

@Max Biggar I've partnered with family, and enjoyed it immensely, and now I also partner with various people around the country. I always document what we've agreed to. Even family can forget the details of agreement. And there is no harm done having everybody agree going in: 

1) What is the goal for the property

2) What is the exit strategy

3) How to split the profits

4) How to track who has how much money into the deal

5) Who is going to run day to day operations

6) How to handle tax issues when selling the property

7) What to do if one decides they want to be cashed out

8) If one gets married or divorced, depending on the state - community property issues can arise, how are you going to address that

9) How to take ownership - what kind of non-entity or vesting, or what kind of entity

10) If you get sued as a result of the project, what are the contingencies

11) If you find unexpected problems (it is real estate after all ;-) How are you going to resolve the issues

That will get you started.

@Casey Wohl Those are all good questions. PM me for details, but here is how it generally looks. When I buy SubJect To I make the payment on the seller's note. I have disclosures and authorization and all of that. Then, I mark up the property and create a new note for a new amount. When I sell to a Tenant Buyer, I do a Dodd-Frank compliance check, they make a down payment or option payment to me, I get to keep that money, and I increase the monthly payment to reflect the note I've created (actually my attorney does the paperwork) and I get to keep the difference. If they refinance or sell, the original seller's loan gets paid off out of that money and I get paid off my equity with the remaining, all at escrow.

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