All Forum Posts by: Nathan Harden
Nathan Harden has started 20 posts and replied 540 times.
Post: Benefits of seller financing
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
Quote from @Steve Vaughan:
Quote from @Jorge Vazquez:
What is your strategy when doing owner financing? Do you have the buyers assign the rent to you etc... Tell me about your experiences!
When I tapped out in March, April and June of '22 I sold all my larger mf on i/o contracts.
I conveyed with a hybrid contract for deed which put title in the buyer's names, but I remain the legal owner. Like a car loan. After a default of 90 days, I take the property back with a piece of paper.
They are serviced with a note/contract servicer which holds the original docs, receives and dispurses pmts, does the tax reporting and enforces the terms like late fees, early payoff penalties, interest-only end dates, etc. It costs $18/mo per contract and $145 annually but is worth it at this level. I have other smalls I handle myself.
I agree with all your reasons to offer SF as a seller, just research what methods of conveyance your state has available which offers more seller protections.
If I just had a regular note and DofT I don't know if I'd do it. My buyers were sophisticated entities that would lawyer up to stall a foreclosure, but not sophisticated enough to challenge the conveyance method ironically. Conveyance methods of seller financing are not discussed nearly enough.
Interesting! I'm all ears. Please educate me on Conveyance methods.
Post: Am I Running the Numbers Correctly?
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
"I set aside15% for CapEx, Vacancy, and Repairs/Maintenance combined. Is this enough?"
This is a tough question because every property varies. A house built in 2015 will not require as much CAPEX/repairs as a house built in 1915.
I will say this, I ALWAYS run my numbers safely so I think anywhere from 15-20% for you is a good ballpark number. When preparing for the inevitable costs, always make sur you know the age/condition of your big ticket items.
Roof, plumbing, windows, electrical, HVAC, foundation
Post: Could/should the seller have disclosed this to me!?
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
So, if I am reading this correctly, this is what is called a "Latent defect". And if the metal sheet is the work of the seller, it absoutely 10000% should have been disclosed if the seller knew about the leak and took the time to cover it up.
If there is also a Disclosure that was given to you and it isn't mentioned, then you will need to get an attorney involved because all of the info that I have, you may be in the Right.
Did you not get an inspection....
Post: Can't find a deal
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
Deals are everywhere. You just aren't looking hard enough or in the correct places.
Don't rely on a Realtor (this is coming from a Realtor) Go out and get what is yours. Don't leave your goals in someone elses hands.
Post: The Biggest Mistakes Investors Make in Real Estate
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
As always, great post, Ken!
It is so difficult to separate the math from the emotions at times. Especially when deals aren't flowing through your pipeline, it almost seems like when one comes around, investors almost lower their standards in order to get a deal.
Post: Roast my property analysis
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
Okay, so if you're Househacking, why would you need a Property Manager....? You are the Property Manager.
Your analysis has 2 units that total out to $1800. But if you're Househacking then you need to take away the income for one of those units because you'll be living in that unit.
I don't see water, sewage or garbage either.
Post: When is 8% Better Than 12%
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
Quote from @Chris Seveney:
Quote from @Sam Yin:
Quote from @Chris Seveney:
I have this conversation frequently with investors investing in mortgage notes and private lending. Many people will look at the interest rate or even the yield to determine which is a better deal. But what many forget is when using yield it assumes you are reinvesting the money you receive every month back at the same rate, which when lending we know this is not the case. Here is a great example:
Investor A does a $25k private loan at 8% interest only for 4 years. They collect $2,000 per year interest and the balance at end of 4 years so they collected $33,000.
Investor B does a $25,000 loan amortized over 4 years. This pays $658.35/mo = $7900/yr but over the course of the loan only $6600 in interest. This then has them collecting $31,600 total after 4 years. Now some of you may say well yes they can reinvest that $7900 every year, but in real estate its difficult to invest $650/mo including the time you are spending on it.
Why share this? The reason being I see a lot of people again just looking at one specific number and not understanding everything behind it.
Chris,
This is some cool insight that some may not be thinking about. I am going to dabble in mortgage notes. I recently listed several apartments and I would consider carrying paper. I wanted to see if this was another avenue to increase passivity. I figure carrying a few notes on I/O would allow for stable income and using a few to 1031 can still help me grow. I am excited to see where 2024 will go.
Thanks!
Thanks. Just trying to educate people on financial literacy as many only look at the "sticker price" and do not think of alternatives for comparative purposes. For example with seller financing doing interest only if you can is a bigger win, especially if you get a big down payment as the risk typically in I/O is price declines, but if you put I/O vs/ Amortization side by side it would blow your mind the $ difference.
Chris, always posting great content!
I got one for you because I am in a similar negotiation as we speak. The seller wants to do a 3 year Interest Only but I told him that I am not his buyer if that is the case because my goal is to always attack principle on day 1.
There are times that I/O can be beneficial to all parties but with mt particular case, the units are turnkey, renting at market value so there is no need for me not to attack principle.
If you're a seller, I/O is the way to go but as a buyer, I never want to get into any I/O for more than 1 year, tops.
What are your thoughts?
Post: What’s your unique selling proposition?
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
You mean, "How do I rip off a seller, quicker?"
If you want them to sell it faster and there aren't any immediate seller pains, then pay them more money. Simple.
You have to find pains. If there are no pains and you're already low balling, they will be in no rush to sell to you.
Post: Can licensed RE agent legally conduct creative financing without getting into trouble
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
Do you mean like Owner Finance or Subto?
Yes. Realtors can help/do creative finance.
Post: Fastest way to get my RE License
- Real Estate Agent
- Puyallup, WA
- Posts 551
- Votes 377
It doesn't take long at all if you really want it. I had to do (I think it was like 90 hours) self paced course. As soon as I woke up, I would open the laptop and get cracking. I finished the course and past my test in less than a month.
No shortcut for the "fastest way". All comes down to how much you want it. The fastest way is to just do it and not procrastinate. Every day you're not doing it, is another day you could have been one step closer.
All the best