All Forum Posts by: Jeff Rabinowitz

@Account Closed, there are many active REIAs around metro Detroit.  Chances are if you will be in town for a week there will be a meeting you could attend.  I know of groups that meet on the 1st Tuesday of the month, second Thursday, third Thursday, etc., and there are several other groups whose meeting date escape me right now.  An internet search should reveal them or, since you have already attracted some local investors to this thread, if you indicate when you will be in town we may be able to help you find an appropriate group.

When I fund through my IRA my name does not appear in any of the documents and my interest never shows on the deed. Only my account number and the company where the account is held is stated. This provides some privacy but even with this precaution I have had properties on which I held mortgages tied up in litigation when the plaintiff filed suit against my borrower.

When I fund a purchase I simply wire funds into an escrow account. The title company holds the funds until the the day of the closing and then distributes them as needed. It has never happened, but if for some reason the transaction were not completed the funds would be returned to me (to my IRA) by the title company.

It is rare for me to allow a borrower to leave a closing with any of my money.  If I fund some of the rehab an escrow account is created to hold repair funds.  The funds are disbursed according to terms spelled out in the escrow agreement.  Draws on the escrowed funds are made upon proof that specified repairs have been completed (photographic or in person visits), upon presentation of an invoice from the contractor and receipt of the contractor's release of lien.

@Hai Loc, West Bloomfield Township is not even close to being the highest net worth zip code in Metro Detroit. (I am not going to reveal the area as a simple internet search should provide that if you are interested.) There are many local cities which do not require any type of landlord registration or license. Metro Detroit is a very diverse region. It is certainly possible to become an expert in an area if you are not a resident but, as you alluded to, it is much easier to become an expert if you have a local partner.

@Carl Gryska , lots of questions but the answer to most of them is that the deal is completely flexible and can be just about anything a willing lender and borrower agree to with the caveats that there are some State specific usery laws and that, because of Dodd-Frank, the borrower is not an owner/occupant.  

Is there a standard contract available?           no.  

What are the standard interest rates?  There are none. Many States have usery limits but they may not apply if the borrower is an LLC. I am fairly certain that the laws in California will be unique to that State.

Does one charge points?     if one wants to.

How long is a private money loan typically offered for?  As long as you'd like.  My shortest deal was 1 day.  I write for years occasionally.

What is the standard percentage of loan to ARV? There is none. I love 40% LTV deals but I have funded 100% (including rehab funds) rarely. These were interesting deals and experienced borrowers.

Aside from fix and flips, do private money lenders loan on rental properties? yes.

Anyone know the name of a good guide or book on this?  I don't but the topic comes up frequently here.  I suspect @Steve Babiak's links are good places to start.

The home is on the market.  That means the sellers are looking for offers. If they have been lowering their price it means they have not found an acceptable one.  The home is only worth what a qualified buyer is willing to pay for it.  Do sellers sometimes get offended by offers they consider too low?  Yes, but that isn't logical.  Any offer shows there is an interested buyer.   Offer what you feel the home is worth.  This may lead to a negotiation and a deal.  There is no way to know if you will find a deal without showing that you are a serious buyer.  The only way to do that is to submit an offer. (Make sure you include proof of funds and a mortgage loan pre-qualification if you will be seeking financing).

Good luck.

I am nowhere near an insurance expert.  The first thing I would recommend is find an agent whom you respect and have them write all your policies so they understand your situation well, can find products that fit well together and can maximize any discounts you may be entitled too.  Personally, I use an umbrella to cover my policies.  One of the reasons is that it is easy to adjust as my portfolio changes.  Sometimes I buy properties.  Sometimes I sell.  My agent adjusts the umbrella coverage at the same time as she adds or deletes other policies.  The new activity will often prompt her to review my policies and suggest changes if appropriate.

I concur with @Marshall Downs .  The good news is that there are a lot of REIAs in SE Michigan.  Renegade Detroit Investors which meets in Berkley the first Tuesday of each month is my favorite.  There is also a meetup group of BP members which rotates sites and is hosted by @Tom A. . MREI meets in Troy the 3rd Thursday of each month. There are several others, Oakland REIA, Macomb REIA.... An internet search should reveal them.

For a start, fill out your profile here, upload a photo and join some conversations to let people know of your successes and your expertise.  There is a lot of private money deployed in our area and it is not difficult to find.

I dealt with 4 agencies fairly regularly.  One was actually quite pleasant and appreciated the fact that I kept my homes in good condition.  That is until the director retired a couple years later and another took over. 

If you participate you are entering into a very unequal partnership.  Violations of many clauses of the contract by the landlord could be prosecuted as crimes while the landlord is virtually powerless to compel the Agency to comply with the contract.

The tenants are part of the problem.  Not because they are terrible people but, in my experience, most had no idea how to take care of a home.  I had to replace a subfloor under a refrigerator which had a slow leak for > than 6 months.  The tenant never said a word and didn't seem to care about the damage caused.  Also, many are used to relying on others, caseworkers, agencies, etc. to solve their problems so it is difficult to resolve problems.

The larger issue is dealing with the bureaucracy.  In SE Mich the workers are overwhelmed and many seem to be indifferent to the landlords' concerns.  Case workers are reassigned frequently and some departments only receive phone messages during specified hour a few times weekly.  The hours change according to which worker is assigned.  This makes communication difficult at best.

In regard to the guaranteed rent that is often cited as a reason to participate.  Read your contract carefully but don't rely on it.  The landlord will be held to all clauses but the office may violate them.  I had tenants reevaluated a few months after accepting them and their stipend was reduced significantly even though I had a lease for a year.  The response of the worker ..."sue us".  Yeah right, I am going to sue the State.  Other tenants got raises at work of as low as $0.25 per hour and that triggered reductions of hundreds of dollars monthly in their subsidy.  Predictably, the tenants had difficulty coming up with the difference.  

I could go on but you will find stories like this from many posts.  I firmly believe there are two types of landlords:  those who do not accept Section 8 and those who will soon refuse Section 8.  Best of luck to you.

@Sam Leon, you are certainly within your rights to do this but it may cost you some good tenants.  If someone did this to me for a minor offense I would be looking for a new place immediately.  My lease is actually worded as you suggest but I have never applied it as you suggest. 

It is rare for me to file for eviction and even rarer for me to apply multiple layers of charges.  (I have many 3-5 year tenants.  They do not usually move because of disputes with me but because their life situations change.) In court, I have had judges uphold most of the fees I have in the lease but they often modify my charges when I apply multiple fees.  i.e. if I apply a tenant holdover fee and a late rent fee they will usually give me one but not the other.  Granted, I live in a very tenant friendly State but I suspect many judges would frown upon turning a large late fee into an enormous late fee.