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All Forum Posts by: Account Closed

Account Closed has started 75 posts and replied 5714 times.

Post: What happens when drug addict rents cottage in nice neighborhood

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729

Some of that is just plain inaccurate.  Regardless of addiction and disability, illegal drug use is still illegal.  Illegal activities can still be prohibited in a lease.  You can evict a tenant for breach of lease.  Basic, basic stuff.  Not fun, and takes lots of monitoring and the cooperation of law enforcement, but no on is stuck with known illegal activities in their rental unit.

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Chris Martin:
Originally posted by @Terry Sutherland:
Originally posted by @Wayne Brooks:

@Terry Sutherland Just following up...I looked up this property in Hopewell, and it's been for sale since June when they started at $69k.  It's been at $30k since 10/01.  Since it hasn't sold, this tells you it's worth less than $30k, for whatever reason.

 Sold in 2004 as a smaller house. I think 900 Sq ft. 1000 ft. Added with 2nd story then home sold for 143,000 then forclosed in mar.2015 at 100,359  then up for sale at 69,900 by bank

A red flag is that it appears that no permit was pulled for the addition, per county records that I saw online. ...assuming I am looking correctly, that this is in VA and I entered the search correctly. "As is" comes with some baggage.

You know, even with permitting issues, a $25K 4/2 that's relatively rent ready is worth the risk in my book. Buy it with cash, go without hazard insurance if you have to.  I'd have more concern about the rental market in the area.  Is it flooded with $750/mo houses? What are the real vacancy rates? Does the tenant pool reflect the relative poverty of the area?  That kind of thing makes even a nice $25K house a total drag for me.

Post: Seller is refusing to sign Earnest money release form

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Joel Owens:

I didn't read all of this but have seen this before.

Some sellers will not consent to release EM even if title can clearly see the buyer should get the EM.

Sometimes a seller holds earnest money hostage to try and cover attorneys fees. They see we will release 50,000 now minus 4,000 for attorney fees or you can take us to court and win but you will spend a lot of time and wait months or longer to get your EM back.

This is why you want to put language in the contract where title does not have to have earnest money agreement to release by the seller to return EM to buyer.  So title could then with a clear breach by seller or a clear termination with buyer being due EM could release. 

Not sure how many, if any, in this thread have had buyers tie up their property and not perform.  I have. While it's the cost of doing business with retail buyers, I don't take it lying down if an investor buyer changes their mind or doesn't get their funding or whatever.  My business model is not based on profit by keeping EM. But absolutely I expect to be compensated if you tie up my property and walk.  You can be sure that if you or your agent miss a cancellation date or document I'll be all over that, and hold the EM until you negotiate with me.  Or at least make a case why you are canceling.

Hopefully the OP has an airtight trail on his cancellation. If not, $2K is reasonable IMO.

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Terry Sutherland:

just spoke to realtor. Says nothing is wrong with home.  Only disclosure is lead base paint because was built before 1978 (old portion of home only) . But no lead that he is aware of. Just went out of pending status due to financial reasons only so seller dropped price again just to unload it. He said another investor was coming to see it today.  

That kind of discount isn't unheard of. We have family in Dayton that bought a large 4/2 REO 2 years ago, in the winter. It wasn't moving and they got it for $22K. Nearby comps were similar to the Hopewell property. Rehabs selling for $75-125K, and then lots of inventory under $50K just sitting. They sold it this summer for $80K. The market hadn't really changed, just that with some repairs and carpet/paint it could then go FHA to an owner occupant.

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Brent Coombs:
Originally posted by @J Scott:
Originally posted by @Brent Coombs:

Terry, I didn't think you were upset with Jay - I just like making up stories. I also have no problem with Jay setting out terms of that get him either $15k in interest payments OR a smokin' property for 25k!

If Jay were to buy the property for $25K and then wholesale it to Terry for $40K, would you still call Jay's profit "interest?"  That's essentially what would be happening, especially given that Terry has no obligation to buy the property from Jay (i.e., no obligation to pay any interest).

As far as I can see, calling it 60% interest OR $15k assignment fee makes no difference. It's a very good day at the office for Jay either way.

It's weird to insist that a markup on resale is an "interest rate".  It's a mark-up, plain and simple.  Jay would be selling the property, with a short term seller carry back loan.  It's about profit on the resale.  I sell everything I can for a markup.  Nobody calls it an interest rate. 

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Terry Sutherland:
Originally posted by @Wayne Brooks:

@Terry Sutherland Just following up...I looked up this property in Hopewell, and it's been for sale since June when they started at $69k.  It's been at $30k since 10/01.  Since it hasn't sold, this tells you it's worth less than $30k, for whatever reason.

 Sold in 2004 as a smaller house. I think 900 Sq ft. 1000 ft. Added with 2nd story then home sold for 143,000 then forclosed in mar.2015 at 100,359  then up for sale at 69,900 by bank

So it's an REO being sold by the bank? I can't see that in my data. I still see the borrower as the owner. I can see that it was on the market over a year ago, during the foreclosure period, obviously as a short sale with no takers.

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Wayne Brooks:

@Terry Sutherland Just following up...I looked up this property in Hopewell, and it's been for sale since June when they started at $69k.  It's been at $30k since 10/01.  Since it hasn't sold, this tells you it's worth less than $30k, for whatever reason.

And appears to have big honking loan on it as well, at about $130K.  So it's either a short sale or the seller is bringing cash to closing.  

The comps, while all over the place, show no shortage of nearby $30-$50K props.  Hopewell appears to has problems, as many areas near military bases do.  There's crime and low income tenant pool.  And likely a rental vacancy problem.

Post: Seller is refusing to sign Earnest money release form

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Bhanu P.:

@Shadonna Logan

Per Seller, they declined 6 offers (some of them are better than mine) since I am under contract.

To mitigate that loss due to my contract termination, they want to either keep my entire EM after legal battle or to get $2000 from me without any legal battle.

Seller did not spend any money to improve the property or such. Their claim is just the lost time and in fact it is same waste of time for me since I haven't put my money to work during this time.

All I feel is that they are trying to use scare tactics on me. At this point, according to contract it is clear black n white on who/when/how should get EM.

Ok.  Thanks for clarifying that the sellers want $2K of the EM for lost time on the market.  To be honest, that doesn't sound that far out to me.  I would try to get that from a buyer who tied up my property if it's an active market.  How many days total were you in contract before sending the cancellation?  Hopefully your paper trail and the agent's is air tight.

Post: Seller is refusing to sign Earnest money release form

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Jay Hinrichs:

@Bhanu P.  PS I would be super pissed in your situation if an agent bungled the delivery as long as you did what you should have done in your time lines.

5k and under I just would not get worked up... but over that amount and certainly 50 large would get me all fired up as well.

For some of my bigger transaction I have used indepenndant escrow agents separate from title company and used unilateral escrow instructions that slant the transaction my way.. ERGO if I don't approve in writing on a certain day the EM is automatically realesed back to me.

And if the agent did bungle the delivery, they should pony up the $2K to make this go away.  The seller only wants $2K of the $50K EM, which I find weird.  If the buyer and agent didn't meet the timelines, why wouldn't they ask for more?

Post: too good of a deal? hard money

Account ClosedPosted
  • Investor
  • Central Valley, CA
  • Posts 6,037
  • Votes 3,729
Originally posted by @Logan Drew:
Originally posted by @Account Closed:
Originally posted by @Logan Drew:

Try a different retail bank that you have a relationship with, not a credit union.  Also try a small local bank.  They might bite on it to get you to open other accounts.  Also, ask the listing agent (or your own agent to ask the listing agent) if there has been an appraisal done within the last 12 mos.  Take that appraisal and approach a few mortgage brokers that can do hard money.  You'll find someone that knows someone who wants to make a small loan if the deal is good.

It is important to note that a tax assessment is not a good gauge of value.  It's actually not a gauge of value at all.  As a matter of fact, tax assessments are rarely within 20% of the market value of a property and can be very outdated (high or low).  Never use assessed value for anything as a rule of thumb...

Your California-ness is showing.  Tax assessment in some areas are way more relevant.  Many get annual reassessment to market.  My inlaws in OH and family in CT get reassessments annually that do reflect value, although fixed in time when the market could be going crazy. Not anything like CA where houses that haven't sold in 30 years are assessed at $100K and the same house next door is assessed at $650K.  I too never use assessments for my purposes, since real valuation data is available.  But lots of folks are paying taxes on assessments WAY closer to value than we are.

 You are correct that some tax assessments may be 'closer' to market value, but an investor should never use tax assessed value to make decisions about a property's value.  They should only use market value (run comps or get an opinion from an appraiser or local Realtor/ BPO).  I am from Pennsylvania and actually am flipping houses there right now.  The same goes there.  You can't trust a county's valuation of a property no matter where you are at.  The 5 minutes it would take to run comps on a property is time well spent.  Stay away from decision-making based on tax assessed value.

My comment was directed at your opinion that assessed values are usually 20% off market.  Really depends on the muni, really depends on the market. That kind of stat is just too broad for my taste.  :)

It's annoying and troubling how often tax assessed value gets cited here.  When anyone posts a deal here where they list tax assessed value they are either 1) a newbie and don't know how to do valuations or 2) someone posting in the Marketplace trying to sell a deal to newbies.