All Forum Posts by: Randy Rodenhouse

@Brad Bellstedt

I couldn’t agree more with @Brad Bellstedt that the agents just need to answer their phone. It’s ridiculous how many agents I call that never answer the phone. And I know it’s not just in one state since I have properties in 21 states. I called and call and call and no answer. The people that do answer get my business. I keep thinking if I was a realtor I could kill it just by answering the phone and talking to people. Yeah it takes some effort but isn’t that the point.

@Jeffrey De Los Santos

Seller financing deals happen quite often. What’s in it for the seller is a higher price and a nice income stream of monthly payments. Kind of like an annuity. The amount down will depend on the seller but I have structured deals with very little or nothing down. The sellers (unlike what everybody thinks) aren’t always people in distress with crappy properties. Actually it is quite the opposite. There are people that just don’t want to deal with the property that have a lot of money and they don’t want the hassle anymore.

@Peter O.

I think selling on land contract in Michigan is fine. I would never buy a land contract in any state. However, selling on land contract you do have to abide by the rules of Dodd Frank Act when selling to owner occupied buyer. The main rules are showing the buyers ability to pay, interest-rate being fixed for the first five years, no balloon notes. There are other details but these are the main things to consider. You should use a mortgage loan originator (MLO) if you don’t fall under the exemptions. 

@Mary P. Usually when selling with owner financing you have to follow the Dodd-Frank Act rules. The main aspects of the Dodd-Frank are proving the buyers has the ability to pay, no balloon notes, and fixed rate interest for five years. Now there are more aspects to it but these are the main ones. The interest rate aspect is not very well spelled out and I would base it on the state laws. The interest rate can increase after the 5-year fix period by up to 2% a year up to max increase of 6% from original rate. Dodd-Frank does mention something about interest rate being tied to an index but not well defined.

@Don Harris You are referring to undivided interest in an established note you are buying. They are referring to originating a note with multiple lenders as a fractionalized note. There are many rules around such transactions.

@Bryan C. When you lend in 1st or 2nd position it would be the same process in terms of recording. The title company or attorney will draw up a note and mortgage or Deed of Trust depending on the state and then record it. But first a title search should be done to find out what other liens are on the property. You don’t want to find out later you are in third or fourth position. I assume you are lending after the first position is established and recorded?

@Minka Sha

I would never sit on a negative cash flow properties hoping that it continues to appreciate. You can take your $40-$60,000 in profits and put it into another investment that has a positive cash flow or a passive investment like buying a note which will produce a positive cash flow of $400/mo instead of negative cash flow of $400/mo. As others have said the 1031 exchange is an option.

@Noah Gregory

Like @Dawn I am in SC and find the rental market still strong. Have a rental property that I just put on market yesterday and already had 7 inquires and will show today. There is always need for a good quality rental.

@Denise Holder

People usually over pay when emotionally attached to a property so beware. You don’t want to get into a situation where you don’t have a good equity and/or cash flow position. That being said I would try to get the owner to seller finance. You would have to find out how much they owe on the property first. If free and clear then try to get them to seller finance the entire deal with maybe a small down. You could also have them structure a first and second with owner financing. If it has mortgage and equity above the mortgage then you could buy subject to the current loan and the have the seller carry back the remainder as a note. I usually don’t recommend getting bank financing for investment property unless it is a killer deal (lots of equity or cash flow possible). Banks will typically require 20% down and good FICO and a good job for investment property especially now with the increased risk due to virus.

@Talley Haines

That is about right. Insurance is higher in AL compared to many other states.