All Forum Posts by: Brian Gibbons

Hi @Robert Burns ,

I love expired listings, as the sellers tried to list with an agent, and usually the agent has really disappointed the seller.

Realize that timing of contacting the seller is important, and many other agents are contacting exprieds as well as other RE Investors.

So, how do you differentiate yourself?

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Door knocking works.

Go early evening or weekends.

Have some qualified Tenant buyers first.

Use this Tenant Buyer Qualifying Sheet.

http://www.biggerpockets.com/files/user/REISkills/file/tenant-buyer-eval-form

Knock on the door, say,

"Hi I am looking for 1 house in this neighborhood to buy, do you know of any homes that might be for sale?

Oh your house is for sale?

Can I do a quick walk through Just 10 minutes?"

After the walk through, you then you bridge over and tell them of your buyers for rent to own etc.

Be a reluctant buyer. Use appeal to a higher authority, as

I"I will need to check it with my partner."

Do not be overly enthusiastic.

Make sure all parties on the deed are present. If not present, do not talk about money and contracts, and reschedule for all parties to be present.

Try to get a letter of intent signed on the first meeting. You need equitable interest in a lease option to market their house.

I hope that helps!

Brian

@Account Closed

This is MY opinion and MY Modus Operandi (M.O) only.

IMHO there are 2 different mind sets and attitudes for JV Partners.

I want someone to have the credit to leverage a loan, buy a rehab, fund the rehab, pay all costs including holding and selling costs, and earn a profit of 10% to 15% on their money in 6 months, not split the net pretax profit.

I want this person to be a busy doctor or dentist, I want him - her to have too much money and no time, not a REIA attendeee.

I want this person to be more concerned about their % profit and not learn REI.

Example:

Retail Comps after rehab - $120,000.

Costs to buy: <$45K>

cost to rehab: <$15K>

Holding costs: <$10K>

Sales Costs: <$10K>

---------------------------------

Gross Profit = $40,000

$80K used x .15 = $12,000 within 6 months (30% APR)

JV Partner gets $12K plus all his money $80K back.

I get $120K - $80K - $12K = $28K Gross Profit.

If I split it 50 50 I would make $120K - $80K costs = $40K div 2 = $20K.

For 6 months of my time I would rather it my way.

Always give a percentage like 15% for 6 months use of the money, never 50 50 split.

IMHO.

And, have the JV Partner buy it and own it until it sells, and you have an option to buy half the equity for $1. Place those terms in the LLC's Articles of Incorporation.

Best Value ARV is $45K, how do you arrive at this? Comps, guess work?

What would any one buy something almost 2X value?

@Schnell MansonLease Option Assignments are for buying at retial, not almost 2X.

How did owner get into this position in the 1st place? a second mortgage?

FYI, no bank would do a short sale at 200% of value. Would you?

@Ned Carey U R Welcome!

And of course, acquiring with seller financing (wrap, sub2, lease option, etc) sometimes involves the due on sale clause.

This is a lengthy debate. Due on Sale has no Jail. If you use trusts most of the time the lender never knows the property has been placed in the trust and beneficial interest has changed hands (you do need to get the P&C insurance in the name of the trust).

I thought I would "micro" this

1. Owner Financing - Anything the Seller does to help the Buyer - Vendee - Lessee assist the sale or possession

a. Lease Option - Sandwich or Assignment

b. Lease and sub lease

c. Sub2 with or without Land Trust

d. Land Trust Sale

e. Contract for Option to Purchase with Lease

f. Contract for Beneficial Interest of Land Trust

g. Contract for Deed - Land Contract - Installment sale

h. Wrap around Mortgage - All Inclusive Trust Deed (AITD)

i. Lease and ROFR (right of first refusal)

There are others

2. Private Lenders

a. With IRA Money, needs custodian, prohibited transactions adhered to.

b. With capital from lender

3. Hard Money

a. with skin in the game mostly

b. points, high interest, 70% LTV usually, not always, 6 month - 12 month call

4. Partnering

a. Usually a money - credit partner

b. They FUND, you SUPERVISE

c. Any split you want

5. Super Cheap Properties

a. You can buy investment properties under $20K in Cleveland OH with 20% down with $800 a month, Section 8

b. Partner with someone.

Then EXIT STRATEGY

a. Lease out

b. Sell For Cash - Investor or Retail

c. Sell on Lease Option to Tenant Buyer

d. 1031 Tax Deferred Exchange - Swap

I hope that helps!

Brian

Hi @Jason Kaufman

JV Partner will get the partner more money/return then a Private Lender.

1. Have Money Credit Partner and You start a LLC, and in the articles of incorporation say:

2. Money Credit Partner will acquire, and improve, and provide funds for marketing. In return, Partner will have all of his corpus principal returned, plus a split of gross pretax profit of 25%. The APR over say 6 months might be 20 % to 30%.

3. You will over see and project manage the acquisition, the rehab, and the re sale with a realtor, and earn the other 75% when the property retail sells to a Home Buyer.

Here is a rule of thumb:

little bit underwater (owes more than comps)

1. Short Sale - give to a Short Sale expert agent.

2. Sub2

3. Lease Option Assignment

4. Lease Option Sandwich (most risk to you, you need an equity spread and there is neg equity)

A lot underwater, forget it as an investor and find a better house.

And caution, a little underwater is a big deal for risk to you, find a 90% LTV or less, there are lots of them out there.

A top newbie mistake is "doing a deal to do a deal." This is a business.

In Illinois, you are asking the owner landlord to do a sandwich lease where you are in the middle, and sub leasing to section 8 tenant.

What is in the deal for owner landlord? Why let you make money on his-her property?

A Motivated Seller is important.

Hi

If this is a selfish Seller and wants more than comps walk away.

I would tie the exercise price to a new appraisal, whatever it is.

I would charge market rent for 12 months with 1 renewable 12 month term.

I would do a lease option assignment,

1. First lease with an option from seller,
2. Then market for a tenant buyer,
3. Get a mortgage app of possible buyer looked at by a licensed mortgage broker,
4. then assign the deal for an option release fee of 3% (based on today's comps).
5. I close in an attorney's office.

@John Jackson

@Bill Walston Gulley

May want to add to this.

Brian

@Anthony Taslimi

Here are the resources that I recommend:

- Peter Conti and David Finkel Protege' http://www.amazon.com/Protege-Program-Peter-Finkel-Manuals/dp/B00AH05E3G

- Any books by Peter Conti - David Finkel (See Amazon for used books)

- Jack Miller Options - See http://www.cashflowdepot.com/store/home-study-courses.aspx

Any book or CD by Matthew Chan http://www.amazon.com/Matthew-S.-Chan/e/B001K8SB7K/ref=sr_ntt_srch_lnk_2?qid=1377060593&sr=8-2

Anthony, I have the course you mention from Adam King, and it has many good ideas, but it lacks training systems to build a business.

I hope that helps you build a Library over time.

Brian