All Forum Posts by: James Hamling

Joel Joel Joel, that is one getto fix, but I gotta hang my head in shame and admit I am guilty of doing that fix myself, lol.

Had 4 buildings, tried and tried to turn them around and raise the class of tenant but it was some odd bremuda triangle effect where no matter what that place just drew in the worst in tenant class, despite all due diligence.

Had some issues with main floor laundry getting broke into because tenant kids loosing entry keys, so we made plexi windows, lol. And yes, they tried to break them. It became a twisted tit-for-tat game that I just had to win, lol. Did plexi, so they broke the frame. Built a hideous super tough frame, they broke the door lock. put in super reinforced lock.... so on and so fourth.

I'd say, build for the property. The plexi route looks real getto. But hey, it is what it is right. Bars on windows sure are no more attractive.

Hey, best of luck Mike, hope you find a good connection.

Jake, I have your answer, and that scenario is a really good point and way to illustrate it.

The best way to see it all to know if it is legal or not is focus on attachment to value. What I mean by that is if person A, call him Bob, becomes attached to a property in some legal form for say 100K value, then Bob has an attachment at that value. If Bob forecloses, sells, what ever, and then the property is brought to come back into his possession at a lower value (remember Bob has that 100K attachment) then Bob could have some explaining to do, AND the ones who conveyed that transaction.

It falls under the umbrella of equity stripping and fraud. The thing is there is a lot of gray area for a city, county, state attorney to interpret.

In your scenario, the son CAN legally purchase the property but ONLY if he does NOT rent to the mother or convey any interest current or future to the mother for a certain length of time. ALTHOUGH he could be questioned on it, AND if he allows the mother to live there he almost certainly will be prosecuted. the son would have to hold complete seperation from the mother in the transactions, meaning she couldnt give him 10 cents to help with a down, give him a fridge, nothing, complete seperation. Even then, he could face charges, although if completly seperated from the mother he would have a strong case.

It is a matter of degrees of seperation. When a discount happens there can be no conveyance in any form or fashion either in interest OR use of the property back to the one who recieved the discount action.

I need to add because I know many not in the know will argue.

The key is "at a discount".

If you sell your home to Bob, just a straight up fair market value sale, and then a year later say "hey Bob, I want it back", so you buy it from Bob for FAIR MARKET VALUE, it is 100% legal. But I can all but guarentee you you WILL be questioned on the transactions, maybe even audited. Reason is it looks like money laundering, or other money hiding fraud actions.

If there is a DISCOUNTED rate ANYWHERE in the mix, it IS ILLEGAL. And yes, I know of prosecuted and convicted cases in my state.

If you buy a property from someone in shortsale or foreclosure, at discount, then sell it back to that home owner in any way shape or form including renting, it is an express ticket to club fed!

Even done to a home NOT in one of those statuses, by getting it at discount then recycling it to the original homeowner, is called FRAUD.

Lots of people have done lots of things, and years later gone to prison for a very long time. Sorry, that is a very clear cut, highly illegal thing to do, in many ways. Equity stripping for one, fraud for two. I would run, not walk away from that.

Todd,

You know every market is unique to itself in way of benefits and pitfalls.

I suggest you go online, find a REIA club in your area of interest, and go to a meeting and talk to absolutly everyone, ask tons of questions. It will be a room filled of active investors in your area, or would-be-investors in your area. And remember to ask the #1 question "what should I stay away from?". Sure, some may BS you to keep you out of there "cool-aid", but I think you will find most are overly friendly and helpful.

In my state and market, no one buys at foreclosure auctions, at least no one intelligent, it's a guarenteed loose here. But I have heard in other states it is a home run.

Will Barnard, hell yah brother, right there with ya on the schister mega-corrupt BOA.

I tried working with them last year to get some package buys. The jerked us around left and right, more ways then i care to recount.

Repeatedly they seemed as if they were trying to make it impossible. In the end, they said we could buy a 1mill package, but only if we could give them a verefication of funds for 220mill, and in 72 hours. No joke. After 3 hours of it sinking it tahat it wasnt a joke, I got really pist at all the wasted time. 47 hours later we sent the verefication for 227million.

Even though I pulled it off, nothing happened, nothing, no package. A big game.

In the same time, we have watched them foreclose on homes not only BOA did not own, but NO bank had a mortgauge on, free and clear home and there foreclosing on it, WTF!

We pulled all funds from them, closed all accounts, and refuse to process any funds thru them in any form or fashion. If someone wants to give us a check and it says BOA on it, we offer them $100.00 if the open and pay with an account else where, any where.

Any with tenants, I put that challenge out there to step up to the plate with us. Offer tenants $100.00 so you never have to see a BOA check again. It's the best $100.00 you could ever spend. Whats $100.00, thats dinner for me and the wife, big deal. $100.00 kick in the BOA ballz makes a nights rest so much sweeter.

Thanks Aaron but I truly have no interest in any book on REI at this time. I am at the point where I rarely read something I do not already know or have learned several months earlier.

Books take months on end between getting to press, printing, and distribution, so much so that by the time I may get one in my hand, it is already outdated information.

Don't get me wrong, the education is key, I have an entire library, literally, in excess of 500 books, many on REI in some form or fashion. I am saying for myself personally, I am well beyond the subject matter in easily 90%+ of the books.

And unfortunantly, the point I am at, no investor in there right mind will publish the things I'd like to know.

I can not emphasise that point enough, JV to start with an established investor. It is the fastest, best way to get in. You will gain the capabilaties to actually do something, plus will learn far far more then the 50% cut you give them worth. Not to mention the networking.

That is the in-all end-all short 'n' sweet too it.

Too Curt and others on HML's happy to take properties back, the are H-M-L's, NOT investors. There is no scenario where they would like to take a property back. When they do so, they incure costs of doing so, added hassles, time lost, and money tied up.

As I remind new investors over and over and over again, if you can sell something for 200K, and buy it for 175K, you just lost about 15K probably. Transactions are not free, fillings and closings, agents, taxes, untilaties, insurance, all NOT free.

Hard Money Lenders are in the business of lending money, not lending money and taking properties back. If you want to get in the game, to get good HML's backing you, know there position and make yourself a good investment to them, and that requires a track record or cash. The more record, the less cash needed.

I say this from an experienced stand point. I started from scratch myself, I know it's tough in the begining but thats what it takes. I built a record doing JV's to get funding, then with that record got funding myself. I know have a record where I get funded sight unseen.
This is work, it takes hard work to get the great returns.