All Forum Posts by: Justin Hammond

@Sean Dougherty An alternative is to work out deals with the borrowers to purchase their property and lease it back to them. Some states might have some strict rules about this as mentioned by @Chris Seveney..

With my market in Utah I have purchased dozens of homes in pre-foreclosure subject to the existing mortgage and leased the property back to the sellers if they want to stay. I'm actually amazed at how many of them are now great tenants, and it's cool that they didn't need to be kicked out of their homes (I don't mean to make it sound like it's a charity - I definitely get good terms on these deals).

@Kevin Marquez, a lot depends on how much your rehab costs are. If we assume $30k, that leaves you with $40k for down payment, closing costs, and origination fees. I'd say $175k comfortably. I know there are plenty of lenders that will lend you construction costs, etc.. but on your first brrrr you may want to fund the rehab yourself and not have to worry about draw schedules and other costs you didn't plan on. $175k would allow you to put $35k down, $5k in closing fees, and $30k in rehab. 

If you want to lever up a little more, I would suggest applying for some credit cards that have good cash advance terms.

I have a $55,000 credit card that I can take a cash advance on for no fee, and 10% interest. That's through Barclaycard.

I have another with Penfed Credit Union that has a $50,000 limit, also no fees and 10% interest. Using those for rehab costs is cheaper than hard money and much more flexible.

@Alan Walker please let me know if you find the answer to this :)

@Rich Burnside, sorry I'm late to your post. I'd love to get together and chat, I've bought several properties at the Utah and Salt Lake county auctions

I have a good inspector, pm me and I'll get you his contact. I'm not sure if I'm supposed to share it on the forums?

@Juan Chavez, what would be the point of doing this? To me it seems like your risk would be far less if you just helped them with the short sale and became the end buyer instead of paying them up front for the same odds (or less) of making a deal with the bank. What advantages would you have by doing it this way?

@Rene Owczarski do you have a link to this story? It seems like neglecting to pay the underlying loans is where it went wrong, but what were they actually charged for?

@Lance Jorgenson, I have an "in house" guy manage all my properties. He's full time and I pay him a small salary. So he not only manages my rentals, but he does a million other things I don't want to do (take pics of other properties, sending out letters, data entry, running errands, etc..). He is a young, smart capable guy who is willing to work for less than he's worth so that he can learn the real estate business and see what it's actually like behind the scenes.

@Eric Moreno, dude don't sell. Keep those puppies. If you sell high, you're also going to buy high. And the demand for 4 plexes or larger apartments in provo is insane. 

I would buy a house or small multi that you can AirBNB or VRBO, since you guys have a knack for management. But I wouldn't sell your current assets to accomplish it, unless you lived in one of them for 2 of the last 5 years and can take all the capital gains tax free. 

The other exception would be if you found the perfect property and absolutely needed your cash out of an existing property and could 1031 with ease. But most of the time, 1031's are more difficult in practice. 

@Justin Franklin, you'll have to shed some more light on the transaction.. what's it worth? What's the purchase price? how much are you coming out of pocket, and how much is the loan? What's the maturity date and interest rate of the loan?

I have done many of these and would be happy to help with some additional info