All Forum Posts by: Matt Skog

I have been seeing a lot of RTO (Rent To Own) listings lately.

Knowing the difference between that, and CFD (Contract For Deed) in looking for a place to own rather than rent, can save you countless hassles.

Many real estate agents don't have to use CFD as a financing tool, but would make out far better in the long run if they did.

In seeking a decent place for people to live, I like to look for places that have paid down the principal owed significantly.

Not to say that you can't use appreciation, but I see far too many people hurting by counting on it.

We are about to go through a huge shift in mortgage rate affordability, with rates sure to rise to over 10% in the next few years.

@Todd Dexheimer It's nice to see you here on the forums. As a local to the Twin Cities as well, you have my perspective covered well also.

All cash purchases are fine, if you have a specific goal in mind for, say a rehab project acquisition. Holding costs don't matter much for that, except for the property taxes. Your ultimate goal can go in many directions. Some will fix up, on the cheap, for a smaller rental income. Others might go for slightly more extravagant, and hope to sell conventionally, but fail to realize the full picture of receiving payments as being the banker.

The best idea, in my mind, for these purchases is to sell on a combination of a good sized down payment for at least 30% of market value after renovations. Then go with your own seller finance terms. Creating a new note for the first 60 months at 10% interest, and allowing the new tenant/buyer to make four 1/4 payments each month. This allows for the new owners to build equity faster than a regular, once a month payment.

Refinance after the 60 months are up, at 18% interest, but at a reduced principal amount reflective of the equity paydown.

It's a little more advanced of a technique for many to grasp, but it is how many with a large discretionary income prefer to operate at.

@Israel Garavito I would love to pick your brain. I'm in Coon Rapids. Respond here, or look me up on Messenger.

I look forward to hearing from you soon. Thanks

@Karen Devlin I am in agreement with others here who say to not put all of your eggs ($370K from 1031 proceeds) into one basket (ONE self storage facility).

It would be far more prudent to spreading the $370K over smaller (5-12 unit) apartments. The "like-kind" requirements only apply to equal *money* being exchanged, all within the same *class* of property. Not just one property for another single property.

Another idea gaining traction is in the seldom used section of commercial property, Mobile Home Parks. When seeking this type of commercial property, often what is sought after is a higher *cash upfront* investment, with little left for traditional financing. Most times, newer or less sophisticated buyers (usually under $1MM) seek out "mom & pop" Parks that keep poor financial records. All in the hopes of keeping better track of records after buying low, with non-traditional financing; and selling higher, with conventional terms.

@Chris Seveney my mom's maiden name was Sethney.

@Kevin Hoodwin It is better to learn first, from the people who are actually *in* the business. If you have not done so already, purchase Martin Saenz' book on buying non-performing notes (NPNs). His experience is a real wealth of knowledge. Dan Zitofsky is another one to emulate.

Also, I see that Chris Seveney and Chad U. are frequent contributors to the forums here.

Good luck with your learning. The folks I have mentioned should be very helpful in reaching your note goals!

@Chris Seveney Mr. 7E, love that you actually use your name this way!

I used to work with a realtor, whose assigned cellphone number was 245-5463. I came up with the slogan, "Bill God".

He still uses that as his tagline with the phone number!

@Chad U. Mr. Urbshott, nice turn down! Hope you can get the FC sooner than later!

@Jack Hendrickson I was just in Cokato a few weeks ago, after my friend in Montrose was unavailable. I felt really tired, so I napped in my car for an hour, undisturbed. I parked behind the apartments on the other side of the road from the cemetery, just a few blocks north of the Casey's on Highway 12.

Nice little town, especially if your flying saucer experiences technical difficulties, to blend into.

@Ross Krings I see that this was just over a year ago, but were you able to get started in the business?