All Forum Posts by: Mitch Freed

Why should the lender get anything? Consider this...you contract a short sale...say you get an option to purchase...previous homeowner moves out..maybe they move on and go rent somewhere else..or take a job in another city. The house either sits vacant or you do something with it. The previous homeowner doesnt care what you do with the house because they have moved on..the mortgage is their responsibility anyways and they haven't madea payment in several months. So you, the investor, contracts a month to month lease while you negotiate a short sale (which we all know is no quick process) 3 months later you collected rental income, the utitlies got paid, the house didn't sit vacant and exposed to vandals and squatters etc... You mean to tell me that the lender you are convincing to short sale the property is entitled to rent??? You are marketing the property for a higher dollar amount than that you are convincing the bank it is worth...should you share your end profits with them too? I think not.

I haven't done this but I have had friends that have...I also have friends that have lived in houses like these...got a pretty good discount on monthly rent as well.

If your tenant is still in the house can you at least get any money out of them or is it a lost cause? It really depends on the relationship you have with your tenant...have you been threatening eviction...getting into arguments...if so..your chances of getting any money may have ended...

I have been successful putting some tenants on payment plans for two months if they are going through a rough time and they have ended up working pretty hard to get current...but that just depends on the tenant...I even had one lady go to the State for assistance to pay rent for a month...and they did!

Going after somebody in small claims exposes you to a reaction by the tenant...if you make their life difficult..they will return the favor i can assure you of that.

If I'm the buyer then I will always push to take title subject to...some sellers may push to sell on contract because they don't want to give up ownership while still being on the hook for the underlying mortgage. They don't like the "due on sale" clause in the mortgage paperwork...even though right now if the note is performing the lender wont come near it even if title is transferred.

I'd say overall a sub 2 deal is more in the favor of the buyer as it gives the buyer the deed...contract for deed leaves the title with the seller until the loan is paid off thus assuring the seller that the payments will be made on time.

Ok so I've got two houses that I have taken title sub 2...one is PITI...the other is interest only...I took title in the name of my LLC not a trust...I am getting policies of my own for each property...so you would recommend to cancel the previous policy...then have my new insurer contact the lender and send them the binder correct?

Thanks guys I appreciate the info!

Thanks guys sounds great...any advice on what to do with the homeowners insurance in a situation like this? Of course I would want to get my own policy to cover the house but in the case of a fire/loss how would that play out?

I don't understand why any wholesale would need to be considered a scam. You state you don't order the product until you have an order in for a higher price. This is different than wholesaling. When wholesaling we have the property under contract which gives us the legal right to market it as the seller...we can even go into a purchase and sales contract with an end buyer or assign to another investor. Selling a product you don't own or have an interest in would be a scam. You gotta have the legal right to sell the property or product.

I'd say that if you do deals where the previous homeowner do not stay in the home and rent back or have some sort of option to buy back then you are fine.

Any sort of transaction where you are withholding information from the lenders will also get you into trouble. Practice full disclosure and you will be fine.

Otherwise...the article doesn't really relate double closings to scams..not sure if I missed something but I didn't see that as part of the article.

If someone confronts you about what you are doing and you cant disclose exactly what it is you are doing then you probably shouldnt be doing it. My thoughts anyways.

I agree...dump them if you can. But if selling is not an option due to the debt owed then its either stop making the payments and go after a short sale or make the best of a bad situation and mitigate losses. No sense in putting another home on the rmls if you can't even afford the commissions. Plus the homes will probably be vacant while trying to sell...thus increasing losses. I can't imagine these homes are gonna fly off of the market. If 5% only covers a year and the tenant doesn't exercise...then find a new lease option tenant and get another 5% to cover the next year...its non refundable if they don't exercise. If they exercise then even better.

Sure but the great thing about the lease option is if you do get some consideration up front then that can make up for the negative cash flow each month...doesn't matter what the market does...if your tenant doesn't exercise then find another lease option tenant and get another consideration up front...

but we haven't found out yet how much is owed on these properties...tough to gauge the situation without knowing the debt service