All Forum Posts by: Brian Gibbons

What is it zoned for? Is it legal to do that?

Why cant they come up w $5K or more?

Ask them if
- they could come up with $10K,
- you would give them 0% financing for 60 months,
- with the balance paid off in $1000 payments paid monthly til the balance is 0.

They will not find a deal like that ever.
$0.00 interest.
They will save over $150K in interest over a 30 yr amoritization.

And you will get top dollar with no tenant management.

Brian

PS See a good attorney to draft the contract.

Every state has different ramifications and legalities. CFDs in GA for instance are great, and foreclosure is comparitively easy. TX, well, CFDs are illegal, plain and simple, and lease options are difficult. TX uses wraps mostly.

If you get a recc from your REI Association locally for the most creative RE residential conveyancing attorney, and invest some time asking:

* Have you done seller financing, such as installment sales, seller carrying a second mortgage, and wraparound mortgages ("wraps")?

* Have you done Land Trusts? (If you are in NY, there is alot of debate as to Land Trusts' effectiveness)

* Have you done JV Partner Agreements?

A Church is looking for security, and will have their own attorney, if they are prudent.

If you can supply what the Church wants over the next 10 years, it would be clearer. Probably holding some paper (carryback) would be attractive.

Many Churches do not make money though, especially in a recession.

All the best,

Brian

Hi Dawn:

In this uncertain lending and employment market my advice is:

Stay away from CFDs and Installment sales for a while.
Do a Lease and a Contract for Option to Purchase (not Option to Purchase)
Act as a landlord always
Charge top market rent
Offer to record the lease and CFO
Create a 3 yr agreement (lease and CFO)
The difference between the CFO and the OTP is the Option is delivered ONLY WHEN the lease is completed. This avoids Equitable Interest issues.

PM me if you have questions.

Brian Gibbons

I agree with Michael on the Lease Option route.

Also you could consider a Lease with a Contract for Option To Purchase. This avoids equitable interest, in case the Tenant brings you to court.

The tenants have rent to pay and they have an option once the lease has been completed, not before. The Option to Purchase and Purchase Agreement are prepared and held in Escrow,

Bronchick and Roop both say that there is little in this Bill to be really worried about,

Being vocal about what you do not want in your life re: government intervention I feel is a duty and an obligation.

Case in point is Texas making lease options ridiculous with excessive fines; and land contracts - agreements for deed outlawed completely.

Yelling and Screaming cant hurt the REI, only help. And it is only thing the US Congress and US Senate react to.

But read the Bill, and object to it intelligently.

Brian Gibbons

Hi Alan:

Instead of Double Lease Options, Sandwich Lease Options are a much more common term.

Back to Back Leases with Options to Purchase are common in Commercial.

Typically:

Here is what is common:

The Players

1. Owner - Seller - Landlord
2. REI - Real Estate Investor
3. Tenant Buyer - Renter - Final Lessee - Optionor

In a VIBRANT lending climate, with many NON-CONFORMING lenders helping a lower FICO score tenant buyer convert a lease option deal to a 30 yr fixed note, Sandwiches make some good sense.

In a CONSTRICTIVE lending climate, there is LITTLE ABILITY to be able to FORECAST what is possible for the Tenant Buyer as far as Home Loan financing.

These Sandwich Deals work well with solid employment and stable REO - Short Sale levels. The higher the instability, the more the lenders will NOT give marginal people a chance.

That being said, the MECHANICS of sandwiches are:

A. From Owner to REI
- Lease purchase agreement (one agreement)
- Memorandum of lease purchase (recorded at the court house against the property to protect the REI - "clouding the title)
This arrangement is not a lease option, something to get of down the is buying the property.
- If you have 2 agreements, a Lease and an Option to Purchase, with the OWNER, you have no real committment to buy the property. You have a CHOICE to buy.

B. From Tenant Buyer to REI
- Lease
- Option to Purchase
- Full Disclosure you have rights to lease and to sub-lease
- restrictions on recording the option and selling - assigning the option

``````````````````````````````````````````````

With the Sandwich to work you as the REI need:
- the right to assign the contract (sell it)
- the right to sublease the property
- clear communication who the owner is and what the owner has allowed the REI to do with his her property.

The challenges of the REI and OWNERS with Sandwiches are:
- Owners currently have personal friends that are in financial trouble, and Owners doubt you as the REI ALWAYS have the ability to get a reliable tenant buyer who will ALWAYS PAY on time and ALWAYS PAY for unexpected bills like REPAIRS and MAINTENANCE.

Do you as a REI want to:
GUARANTEE the performance of the tenant buyer? In PAYING on time? The FULL amount and on time?

My advice is to be cautious with Sandwiches.

Tell the Owner:

- I will use BEST EFFORTS to help you with the Tenant Buyer paying on time, BUT I can not gurantee the payments.
- I will communicate with you in a timely fashion. You as the owner deserves to know EVERYTHING about the property, even when there are problems.
- Even if the Tenant Buyer has to move out, I will at my own costs and expenese clean the house and re-lease it. This will be communicated to you in person by me.
- I have a financial interest in the Tenant Buyer buying the house. So I will jump on any and all problems.

There are other ways of making money, such as the Cooperative Assignment.
- You lease option as a principal from owner
- You find a Tenant Buyer
- You assign the deal and get a fee of 3% to 5%
- You are out of the deal

You can do Wraps and Land Contracts with COOP ASSIGNMENT too.

I hope this helps anyone who reads this.

Brian Gibbons of REISkills

I think voting for quality is a good idea.

I think someone that has learned from a thoughtful writing should able to give a good vote and be clear about what was valuable is helpful to others.

Negative votes, well, that is subject to interpretation.

Good job, Josh, well done.

I agree Rachel. Learning Notes and the HP 12C calculator, and being devoted to paper investing (VS owning properties) in these next 5 yrs will make alot of REIs money. Paper is safer at less than 65% LTV.

Being a PLer and getting 16% - 20% interest is a cool way to make money, especially in a Roth.

Brian Gibbons

I agree!

I have books from Lucier, Chan, Bronchick, Conti - Finkel, and Private Money from Rice and Bromma.

Contracts and what to say (e.g. Conti - Finkel's Protege' Course) is what makes you the cash though, IMHO!

Thanks for saying hi!

Brian, [LINK REMOVED] :D

Tom Henderson http://weblink2.com/hpnotes/ trains REIs in notes and I love his books.

[REMOVED]

Brian