All Forum Posts by: Patrick Henderson

Well, some good advice has already been offered on this post. I think this may help.

First, know your area. Study what's been going on for a while in that area, this will help you understand many things.

Older communities. Is there regentrification going on? Is it high crime ie. will the copper fly out the door if it's vacant for a week? Are bars on most windows. BTW I've found pockets of good blocks in mainly bad areas where we could get a little more out of them than the surrounding area usually several or more blocks with limited access, that has few entry and exit points and neighbors help us by watching over the place during rehab. They know where they live within the area and they know if its kept up in their little pocket they get to keep their sanctuary.

New communities. Just because it's new doesn't mean it has low crime rates. And, people with money have better things to steal.

If they are building they are building old or new community doesn't matter. it does however, mean good or better things are going on.

when looking for comps it can be tricky,. Example when I was investing in Arizona. Two houses not identical but very similar in almost all aspects, less than a thousand feet apart not accross a major thoroughfare. One is worth 250 and the other 500.

Know your area! It doesn't take that long to find out. If there is a discrepancy there is usually a reason. It's not always a deal. Knowing your area will help in that determination.

Sure take the CMA from your agent. Hopefully they have a working knowledge of that area, if they don't you can point out some specifics to them or find one that does know that area. If there are few comps, thats just the way it is and there can be sevaral answers. Make your decision based on your best judgement. Remember it's an investment there are no guarantees.

Ps. Just because you would not invest and rehab or hold in a particular area doesn't mean someone else won't. Those make good wholesale properties.

Motivation, the act or an instance of motivating, or providing with a reason to act in a certain way:

For me or should I say in my life I noticed early on that my brain was deficient in two things. I don't and have never collected anything, ever! I gave away my baseball cards and kept the gum. Which my friends did not understand.

I simply don't have and have never had the ability to think like an employee. I had my first paper route at age seven, A bottle route soon after, for those who remember that. I collected aluminum cans for a short time when ALCOA first started making it easy to sell them for wieght.

For me and my motivations in RE, I have asked myself this question many times.

This is it, I think. Creative solutions to unique situations. Creative transactions are a big motivator for me. Am I helping others in the process? I like to think so but that would be for the people I've dealt with to determine. While I want those I deal with to feel I have done my best to come to an equitable interaction at the fairest terms. I will not aid you in your negociations with me and I will not negociate from a position of weakness.

I think being ethical is huge but it is a business and it must make a profit or I will not be there tomorrow.

I'm not looking to feed my ego, I have enough of that to last me several lifetimes. I am however, looking for a sense of accomplihment. Something I can look back on and have a pleasant memory of. For me it's difficult to do that if I simply did it for money or ego. Freedom? Yes I do get a sense of freedom from this business but in the sense that I'm the one behind the wheel.

One last thing. RE investing can be very profitable and a very lonely business. Don't forget to share your successes, failures and rewards your choices have brought you.

Great post
Bill

Patrick

@ J Scott, Well said.

Hi Ava, When you started investing in stocks you probably started with mutual funds or at least an advisor. Then you may have went on to pick some solid companies based on your own experience and education. Real estate is no different in that repect. Investing in any enterprise is and should be thought of as a business.

Investing in RE has some advatages over the Stock market in that you're investing in real tangible assets. The Stock you invest in is more paper money than tangible asset, at least in my opinion and many others that I know. And, one large investor in your chosen stock can change everyones bottom line. You're also depending on someone else to manage your business.

Real Estate ealso has tremendous leverage. I have controlled hundreds of thousands of dollars in assets with as little as ten dollars. Hell, there have been times when I have controlled millions of dollars of assets with a few hundred dollars. I'm not saying you can't do that with stocks but you are not in control and if you're shorting a particular stock with that kind of leverage you could lose all the assets you own.

It' a no brainer for me.

Patrick

Hi Amir, I have a skip trace service that I have used over fifty times and they have never failed. Skip trace those you can't find easily those are the ones no one else can as well, Smells like a deal in the works to me.

If you need the name of my people msg. me directly and I'll send you their info.

Just a thought.

K is right to bring up bringing the note current if you have the proper agreements and knowledge to secure your inertests.It's a subject to Deal. It's propbably the cheapest way to control the property in this situation considering the price range. Also it may allow you to pay a liittle more by saving on the financing. Thereby helping them and yourself out at the same time. Not to mention releiving your conscience. lol Beware the DOS (Due on sale clause) but in my experience if the bank getting their money that clause is almost never exercised.

As far as misrepresentation to the seller it's never a good idea. It's only headaches.

What you have is a contract to perform within the terms of the agreement. 10 days 30 days whatever you negociated. Until those terms come due you have the right to sell advertise for sale or assign it. Just be sure to immediately take action. Contact all possible buyers you already have in your lists. Advertise on craigslist, MLS whatever, just take advantage of the time you have. BTW I have gotten extensions on my terms more than once, so don't let it go even if your time is getting short and it takes a day or two longer. Be sure to stay in touch with your seller, many times they let a few days go. Ten days isn't much time though, if you don't have buyers you know already. Thirty days is much easier to work with.

@ Robert

I hope this doesn't sound condescending, cold or arrogant, but. Stop! What you have written is tantamount to a solicitation for simpathy or pity. Don't get me wrong I absolutely understand where you're coming from.

Have you ever heard of NPL (neural linguistic programing)? What's happening is you're not asking the right questions.

Instead of asking things like.

Am I to late to the game. Can this be done where I live? Is it harder to do here than there? Ect...

First let me tell you this. Everyone who has been in this business even for a short time, learns that California is another planet for investing in RE than the rest of the country. Regulations and laws are tough not to mention competition. And, If you were getting started in wholesaling there, the chalenges would be far greater than where you are now. Lean to's cost three hundred thousand in Califonia.

I can guarantee you that wholesaling is going on all around you right this second. As is every other type of RE investing.

Try these questions on for size.

How can I find motivated sellers? (those who need to sell not want to sell)

How can I market with little to no funds to do so?

How can I find the right people to learn from?

How can I jump start this business?

How can I learn more about this business?

Have I done all can do today?

How can I do more?

How can I change course but not lose site of my goals?

If you haven't noticed, almost all of these questions started with "how can I".

This changes our perpective on the tasks at hand immensely. These type of questions sets our minds to work almost on it's own to find answers, It gives our mind something to work on, not something to dwell on.

Congratulations on taking action because action is the key to all things. Knowledge is the power to change circumstances to posibilities.

It's curious that most people in this world equate fate and destiny as the almost the same thing. Fate is where circumstances leave you from things you can't control. Destiny is what we manifest in our lives and our world, it's what we create.

I know you want to succeed by the fact that you are reaching out to BP and others, like your Pastor and your taking action.

Don't quit don't give up, change your mindset.

Get up, get started and take action.

I hope thats helps.

@ Michael

Right now you're doing exactly what you should be doing. Taking action. Nothing moves until you take action. Frustration may set in from time to time but the truth is, frustration is like pain, it tells you where the problem is. I've always believed that leaning is the crux of all endevor, action is the key.

A buyers list? Well it's been said already, find a deal at a price that makes sense to the end buyer. In your case it's a rehabber or buy and hold investor or an owner finance company. which is where my last whole sale went. He hasn't stopped calling since, for another deal. That's what Tim and others are saying. "build it and they will come" A lot of Guru's lately have been touting the buyers list first mentality. Because, thats most newby's biggest fear. What if I can't sell it?

Here I guess, is my blue print from experience. Education first, get as much as possible. And, never, ever, stop learning, you can never know everything about anything.

Next communication. learn the process of negociation.

No one gets everything they want out of a deal, you the seller or your buyer for that matter. The thing is, finding a way for all parties to get what they need from the transaction. With that said, being a transaction engineer, specialist or whatever term you want to put on it, is high on my priority list.

All seasoned investors will look at any deal to see if there is some way to put it togther for them and their collegues benefit. I get calls from people as well looking to put me on yet another list that I never see a deal from or even just something to look at.

Concentrate on finding motivated sellers.

If you can find deals you're indespensible, a hot commodity. Trust me on this. When you have that talent you have this business down as far as moving foward.

One more thing "KISS" keep it simple stupid. especially the numbers.

As always, get up, get started and take action.

Ps. If you're not making offers you're not going anywhere in this business.

@Bill

Isn't it true Bill that any contract can be assigned unless it specifically states that it is not assignable. That has been my experience and understanding. If I'm wrong, can you please clarify. excluding a loan agreement and really we do that with SUB-2.

@Bill

Sorry, missed your post earlier. And I have not done a Sub-2 in connection with a short sale! I'd think the bank wouldn't receive the advantages of doing a short sale, the books, if a Sub-2 were done, the loan isn't paid off and being written down would be a yoke around the lender's neck, financially.

Yes, this doesn't address the due on sale issues, the only question is if you're going to take the risk do you secure that interest.

Disclosure is key, but it still doesn't keep you out of trouble, ruin a seller's credit and find out....LOL

Yes, there are authorizations to obtain loan information, insurance assignments, Special Warranty Deed conveying subject to, disclosure to seller on pitfalls, note/DOT, HUD-1, Tax report, notice of intention to sell to the lender......probably forgot something but I didn't need a POA. There were other contracts for servicing and assignments as well, not an investor issue. :)

I do not file the deed or any other instrument before the bank and I have agreed on a transaction. I don't want my or one of my entities name involved in any way with a default. I really don't know of any way to give any advantages to the bank when a seller has defaulted on their oblgations.Except to clear the books. I would be interested in hearing your thoughts on that, as well as how you utilize Sub-2.

What I do is secure my position with the seller so that if I do what I say I will. Then the rug can't be pulled out from under me once the seller finds out the negociated price and tells a friend and they complicate the deal. While the seller is already in a bad situation, Many people are hesitant to do wraps and options. They want it out of their name if they have to move out. I see only one way to help them at that point. A shortsale is better than a foreclosure. Not much but better.

As far as the sellers credit goes. I've done nothing that could ruin their credit or hurt it in any way. I do not prevent them from bringing the loan current, I take no responsibility towards or with their responsibilities except to secure with them my position for the negociation of a short sale. I do not take an assignment for the insurance because I have no equitable interest until I actually take possession at closing. I think that would be unethical. With HUD 1 or any other docs I leave that to title company.

@ Marie

The reason for the deed is that my position cannot be subordinated with the deed in place. I have hours and hours of work to perform. I don't want to lose my position for the lack of a document.

If I have 60% to gain in a deal I almost always buy it straight up. Then my position is secure with no complications. I could see if you are taking over payments you may want a SUB 2 involved. Essantially any deal that does not eliminate the prior lenders interest is a SUB-2 in some form or another.

@ Adam

I have not done a SUB-2 since the Dood-Frank Act. I would be interested in any and all illucidation on that.