All Forum Posts by: Account Closed

You have a unit - is that a house? You have $100,000 equity - how can occupying the unit help you build equity -just a little confused about that.

• So if you have $100,000 in equity you could -----
• Get a loan on the unit - keep it - rent it for an amount to cover your mortgage  and invest proceeds
• Sell it - get your hands on that $100,000 and work on investing, give loans - buying notes
• Sell it - do a 1031 tax deferred exchanged
• Take some of that cash and partner with someone like me to invest in lead generation or someone you trust to flip real estate
• It sounds like you are in a good position - 
• Be glad to give you some ideas - you are welcome to call anytime
• Charles

That should be fun.....let me know what they say - most lawyers wouldn't think to do that, you should be sure to know what to expect when the seller's resist some of those terms. What is a keeper clause and which ones are give always. 

You can find all the contractors you need -- just go to Lows or Home Depot 5:30 in the morning and talk to the folks buying material for their next job - negotiate 

Charles 

I don't have all the answers to your situation, I will share a little of my experience - When I was younger – in my 20’s in the 60's, I never had too many jobs - the longest one I had was with a correspondence school for 7 years - that sales training was the key that prepared me to be able to negotiate real estate transactions.

During that 7 years I started taking seminars, buying cassette tapes (remember them?) - I was a sucker for every crazy program that was offered.

I was looking for the magic formula to quick riches. Many of us were looking for that increased income and cash flow and the juicy benefits that the money could provide. 

I will admit it – I was hungry- I wanted more but I didn’t have the skills or experience to do it on my own, I didn’t want another job - I was sacred – 

I was sold on all the propaganda about real estate riches and continued to search for that magic formula.

That was over 40 years ago - as I think back about all those programs - I realized that my intuition, creativity, imagination or the pure synergism of all that information enable me to create hybrid formulas of my own – formulas that helped me avoid conventional financing, credit approvals, cash down payments, real estate agents, gate keeps and those others who wanted to delay my progress of making money in real estate.

So with that said – you might want to take it slowly – that is--- keep your job--- and accelerate your learning and exposure to real estate investing and begin your transition to a position that will able you to control real estate and profit from your activities ONE DEAL AT A TIME!

I don’t know your financial situation or how much you earn a year – but may I assume that an extra $10,000 per month on a continuous basis would free you from your slave wage job and give you the courage to do real estate full time?

Real estate is a vast industry – look around – it is everywhere – giant commercial buildings in every town – leasing – land development – tax deferred exchanges – syndication – partnerships – and much more. You don't need to be knowledgeable in all those areas (that can come later when you have the cash to play with). 

Focus on what is more predominant – houses. 

Here are some Alternative Financing and Formulas you may like to read:

https://www.biggerpockets.com/search?utf8=%E2%9C%93&term=parrish+post

Try this – The 50 House Rule -

• Use the 50 house rule - look at 50 houses in the community where you want to invest
• Do not make offers - look at and tour as many houses as you can - 3-5 per day
• Keep a journal - keep notes of what the sellers and the agents tells you - determine the price per S.F. - this will give you an indicator and a comparison of prices in your marketing area. Keep copies of the listings – read the remarks and price changes
• Your goal should be to become knowledgeable on values in your area. And you will if you follow this rule.
• Have agents send you new listings and especially EXPIRED listings – an expired listing is a great lead for you and a failure by the agent and owner to sell – What’s the problem – PRICE -always PRICE – Learn the many ways to make offers.
• Visit the houses of expired listings - an expired listing is a listing gone wrong - owners still have an unsold house, sellers could still be motivated to sell. Call or better yet - go to the property - ask "Is the house still available - may I look?”

If you cannot find the seller – the agent knows where the seller is – call the agent – ask “Are you still taking offers on that property – what can you tell me about it – why didn’t it sell”?

Do this for a few months – you may want to take a real estate course to get your license – Attend REIA's – BUT do not trust the sales pitches you will hear – I don't think you should spend your money on those programs – if you want to spend some money – get a mentor –

The candidate for your mentor should be financial successful – in many phases of making money in real estate; auctions, tax sales, lead generations, contract engineering, assignments as well as the many creative clauses’ used to buy real estate.

I think you will do well – take it slow and easy – don’t be influenced by big talkers – counsel with spouse – create credit lines – be ready with a form packets of contracts – assignment forms – notes – disclosures and blank checks – study and learn from others 

------ AND HAVE FUN – your journey to a better income and more of what you want out of life is exciting and profitable. ENJOY THE RIDE -

Charles

PS - Do not make an offer until you view 50 houses!!

You don't have to buy it to make money - you could control it with an offer - with a delayed settlement date and assign the contract to someone who will developed it. Sandwich yourself for an assignment profit.

It should be interesting to see what happens with this building - still waiting for a response to my inquiry. I will make an offer as soon as a contact is made.

Charlie

Rico - I have been doing what you want to learn now for over 40 years - you are wise to think about alternative creative financing - this is the best way to make immediate cash flow and equity profits in this business -

Here are some ideas for for you --

• Control and Roll - a system I developed 15 years ago to flip properties without credit or down payments. 
• Family Partnership or Friendly Joint Venture - get a group of folks with a little cash to work with you
• Seller "RE-Fi" for Takeover - have seller refinance the property - take over his mortgage potential nothing down - do subject to or assume - you can do a delay settlement - seller can take interest and depreciation deduction while you have equity ownership.
• Always ask for seller financing - the following are some ideas of this subject --
• What you need to think of is how can the seller financing help you now and in the future -
• The best mortgage you can have with a seller is one with no interest - it is called a principal mortgage - all payments go to reduce the debt
• It should be fully assumable without qualification - this will help you if you offer the property for sale in the future - built in financing
• The interest rate - if you have to go there - should be as low as possible - so that when you sell in the future you can do a "wrap around mortgage" and make interest on money you owe
• You should have a first right of refusal in the event mortgagee decides to sell it at a discount - you get first wack at it.
• You might want to consider a "Stutter Clause" this lets you miss one payment a year
• that mortgage should be a "subordinated mortgage" this lets you refinance and put the owner financing in second position.
• Put in an early pay off discount - so pay it off early and take a 10% discount
• U may want to make that owner financing a personal note - not a secured mortgage -- this way you can refinance immediate and walk with some cash
• You could secure that mortgage on another property you own or a partners property - this frees up the equity to refinance and walk with cash (to be used to invest in other properties)
• You could ask for a delay in mortgage payments for a few months - gives you time to flip it without payments
• you could ask for interest rate at "prime rate" this is what banks borrow at
• Maybe NO payments for 2 years
• Angel Investors - there lots of folks out there with money - show them how they can increase there interest by investing with you -or lending you money - offer them an "Equity Kicker" that is a bonus when you sell the property and pay them off - if you present right they'll love to give you $$
• Chattels for Equity - trade something you have or something you can buy on time to use as consideration. "Buyer agrees to give in exchange for a down payment a riding mower - all the tools in my garage - a 1951 Buick - $2,000 worth of dental service with Jack the Tooth guy, a coin collection - This method works best when you find out what the seller's passion is - You can always offer that item that he will like - that you can buy on terms - 
• Front Porch Clause - tell the seller you buy the property if he fixes the front porch that will cost about $5,000 - oh, credit that to me and I'll fix it.
• Offer mortgage notes for DP or Equity - by creating a mortgage and note on your property you own - a title company can do this for you.
• I have many more - here is the last one I will mention ---
• Vertical Break Up - Offer to buy the building for cash, and lease the land. Allocate a percentage of the offered price to land, and offer to lease it for a specific amount with a balloon payment in the future. Negotiate a prepayment discount. This is a great way to get a discount and a disguised owner financed deal with a ton of leverage.

Wish you good luck -  CharlesParrish

Ester - there are times when lawyers don't have all the answers when it comes to seller financing - if they did - they'd be investors -

• Sure they can write up a mortgage and note any lawyer or title company can do that -
• What you need to think of is how can the seller financing help you now and in the future -
• The best mortgage you can have with a seller is one with no interest - it is called a principal mortgage - all payments go to reduce the debt
• It should be fully assumable without qualification - this will help you if you offer the property for sale in the future - built in financing
• The interest rate - if you have to go there - should be as low as possible - so that when you sell in the future you can do a "wrap around mortgage" and make interest on money you owe
• You should have a first right of refusal in the event mortgagee decides to sell it at a discount - you get first wack at it.
• You might want to consider a "Stutter Clause" this lets you miss one payment a year
• that mortgage should be a "subordinated mortgage" this lets you refinance and put the owner financing in second position.
• Put in an early pay off discount - so pay it off early and take a 10% discount
• U may want to make that owner financing a personal note - not a secured mortgage -- this way you can refinance immediate and walk with some cash
• You could secure that mortgage on another property you own or a partners property - this frees up the equity to refinance and walk with cash (to be used to invest in other properties)
• You could ask for a delay in mortgage payments for a few months - gives you time to flip it without payments
• you could ask for interest rate at "prime rate" this is what banks borrow at
• Maybe NO payments for 2 years
• I know I have some more ideas - but can't think of them now (when you hit 74 y/o you sometimes forget all those great method of making money in this business.)

They are some ideas - hope they were helpful - call anytime if you need help.

Charles

Push it on the public street - it will be removed.

Charles

Be aware of the "Greater Fool Theory" and be careful of real estate that is packaged this way - the seller is going to do well - I am sure - especially if you intend to pay cash for these properties.

• We run a little Investors School in Baltimore - teach  negotiating and investing making offers as well as tenant management -
• Baltimore is also known as Small-ta-more - word gets around quickly if someone is taken advantage -
• We have BLACK LIST on the bulletin board at our facilities - we put names on that list who have taken advantage of our members - title companies - lawyers - contractors and so called investors and wholesalers -
• Be careful with whom you do business with in the little big town of Baltimore
• I can't publish this list here - but be glad to read it to you -
• If you need some Pro-Bono advice - let me know
• That neighborhood you mentioned - values vary from block to block - not sure if houses will appreciate much there -

Wishing you good luck - stay in touch -

Charles

Information is very important - asking the right questions and knowing how to respond to responses will mark you as a rank amateur or professional who knows what to do and how to get the the bottom line quickly and close a deal. (Too many want to be investors take too long to make an offer or close a deal)

When you get leads - I will be glad to do a 3-way on the phone with you - I'll ask the questions - you listen and learn .

• Every property offered is or could be a good deal -
• The only thing that make a property a bad deal is PRICE - every property will SELL when the price is where it should be!
• How long -- Time on the market and price (reduction) are close cousins -
• Price softens as time moves on and motivation and reality is realized
• Everything will sell at a price -
• The first thing I'd want to do is get the history of the property - how long on the market, why is it vacant - what's the reason for selling - is it listed - look at listing
• What is the mortgage balance - is it current or in the arrears -
• What other liens or obligations are on the property
• How many owners - decision makers
• What is the commission - will agent split
• Are they open to a reasonable and creative offers
• Do they want any profit or to just get it out of their name
• Can down payment be paid over time -
• How much paper with they accept - delayed payments - principal mortgage
• Who is the decision maker
• How fast do they want to settle

Everything is negotiable - CONTROL IS KING - learn how to control real estate - it is a short cut to cash flow - it is the best way I know of assigning properties.

Who controls real estate -

1. An agent with a listing agreement (treat them well - they are in control for a period of time)
2. An accepted option agreement
3. A buyer with an accepted contract of sale with contingencies