All Forum Posts by: Brian Gibbons
Brian Gibbons has started 114 posts and replied 4413 times.
Post: Lawyer recommendation for Sub2 transaction, Texas
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Originally posted by @Phillip Lanier:
Greetings!
I will be acquiring a house with a mortgage. I will be paying the seller $3,000 and taking over payments on a "subject to" deed. I have an understanding on how it works but I need the proper contract, deed, etc.
Does anyone have any recommendations for a lawyer that practices in Texas that has experience in this type of transaction?
Thanks in advance.
Phill
Hi Phill
See https://www.lonestarlandlaw.com/subject-to-transac...
Best overall contract guy I know in Texas.
Post: Tenant asking security deposit to move out
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
This is what I would do:
The first thing I would do is call my REAL ESTATE INVESTING association and get the best evection attorney I could find
I would sit down with this attorney for an hour of his time and get exact instructions on how to get this tenant to move out ASAP.
You need to be very aggressive or you will be abused by this tenant.
You also need to get your policies in order as far as how to handle tenants in general .
Post: Tenant asking security deposit to move out
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Originally posted by @Ankan Basak:
Havent gotten paid last 2 months. Issued notice of termination as I also found out the unit is not legally rentable. The tenant asking for one-month security deposit back so he can pay for the next place he will be moving into end of this month. Tenant threatening if I dont, he will stay back rent-free till eviction goes through for another 2-3 months.
This is NY, and eviction takes time. Also, legally I cannot even have them in the unit for next-month's town reinspection. What to do? I am tempted to give him the security deposit, but I fear he may still not move out. I dont get the keys back till end of this month. Or maybe I dont give the security deposit and let the courts evict them in expedite manner because the unit is not rentable in the first place and they cannot legally live there?
Post: DODD FRANK - Rent To Own - Rent Credits ARE LEGAL
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Originally posted by @Chris Mason:
Originally posted by @Jay Hinrichs:
its not that they are illegal its that lenders wont give the renters/buyers credit for down payment ..
you can just lower the price of the home you sell it for but it cant be used for equity down payment.
@Chris Mason could give you a definitive on this one
Lenders can in fact give credit for the extra rent being counted as down payment, and here's the guideline from fanniemae.com direct.
No one that I am aware of has decided to specialize in this niche since so very very very very very very very very very few tenant/buyer/borrowers end up being qualified for the mortgage. Works out great for the landlord who got all that extra rent, not so much for me as the person being asked to spend time on it 12+ months away from a closed transaction that's only got a 1 in 50 chance of closing at all anyways. I'm a Bay Area person so it might be different here, but I can count the number I've seen that actually got to the closing table on one hand.
As it stands, due to the first paragraph, I only entertain these scenarios at the point in which the tenant/buyer/borrower is ready to exercise their option. In the last bunch of months I've had 2 in Oakland and 1 in Hayward try... None of the 3 qualified.
RTO is great for the landlord who gets to keep all that extra rent, not so great for the lender. Maybe I need to establish a model where I'll do that consult and pre-preapproval 12+ months out if the landlord pays me 1% of the contract/option sales price, with half of that to be refunded to the landlord if, and only if, the person actually buys the house using me as their lender (muahahahaha).
Hi Chris,
RTO and Lease with option and Land Contract and Contract for Deeds are old fashioned midwestern and east coast staple tools.
I personally know of hundreds that have been turned into 30 yr fixed mortgages.
Now you could call The Republic of California "Mars", and you could call the midwest "Venus" as far as creative financing that actually is common place that actually gets funded.
Just ask @Wendy Patton.
Post: DODD FRANK - Rent To Own - Rent Credits ARE LEGAL
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
You can give a CREDIT for seller concessions - closing costs.
You can NOT give cash credit reducing the sales price OR adding to the down payment.
EX
House 100k
Strike price 106K
Seller nets 97K
See how I get the seller to go with this proposal as compared to a 6% commission, closing coasts, spruce up costs, etc. which add up to 10 to 12 %.
Post: Seller Financing and Lease Options in Houston, Texas
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Try buying with private money cheaper houses, using 60 moNth 6% mortgages with no due on sale clause
Now you have a private lender mortgage
Then sell on a wrap
Post: Easiest way to Lease Option in Texas?
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Originally posted by @Michael Batts:
Hey BP Fam,
I'm a local investor in the Houston, TX area. Wholesaling is my usual strategy, however, I've been learning how to do Lease Purchase deals. Come to find out.. Texas is "One of the strictest" states to do Lease Option deals with a tenant buyer.
I've heard some investors say that you can still do them in Texas, but you must have "Fee Simple Title"?! I've also heard some investors claim that you can do it with a Subject-To deal with the Seller.
Someone please clarify this for me! Thanks a million :)
Best information about lease options in Texas
Post: What is the best thing to say when calling a motivated seller?
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
It depends but here is a list of question to ask.
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MOTIVATED SELLER - QUESTIONNAIRE CHECKLIST
When talking to a seller, try to ask the questions through the course of a conversation and try not to sound like you are reading from a list.
(Note: You will not ask all of these questions depending on the answers the seller gives and your investing objectives.)
Asking About The Seller And Their Property:
Can you tell me a little bit about your home? (# of bedrooms, baths, size etc.)
What do you like most about the home?
What do you like the least?
Are there any repairs needed?
What is your sales price and how did you arrive at it?
What do you think your house would appraise for in excellent condition?
What do you think your property could rent for?
Is your property listed with a real estate agent?
If you don’t mind me asking, why are you selling?
Asking About The Existing Financing:
Do you own the house free and clear?
Do you know if your mortgage loan assumable?
Would you sell the house for what you owe?
If not, how much are you looking to get above what you owe? (Subtract that from sales price to get loan balance.)
How much are the monthly payment on the mortgage?
Are the payments current?
What Kind Of Deal Can You Get:
If I paid you all cash and closed quickly, what is the least you could take?
(Follow-up by asking if that is truly the least they would take.)
Will you consider leasing the property to me with an option to buy if I guarantee the mortgage payments and maintenance?
Do you have a problem with someone living in the property until I get it sold?
Would you consider optioning the property to me, if there is absolutely no risk or cost to you?
Post: I need some guidance please
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
ANYBODY IN TEXAS
Texas Lease options need WARNINGS:
2005 changes to the Texas Property Code (Sec. 5.061 et seq.) define residential lease-options for longer than 180 days as "executory contracts" subject to strict regulation and penalties if not done exactly right. Exactly right.
Specific requirements must be observed and the burden is entirely on the seller to do so.
Violation incurs not only penalties under the Property Code (return of all payments made by the buyer including monthly payments) but potential liability under the dreaded Deceptive Trade Practices – Consumer Protection Act ("DTPA") which can involve treble damages plus attorney’s fees.
The most sobering aspect of executory contract regulation is that there are no seller defenses, even if the arrangement was the tenant/buyer’s idea to begin with.
The risk to the seller of using lease-options (or any other executory contract) is now significant, and investors should therefore use any such device with caution.
(David Willis, JD, Houston TX)
You make the profit when you buy. Don't pay retail.
Also learn how to PARTNER and how to get PRIVATE LENDERS.
Then buy wholesale, use private lender cash with no due on sale clause and consider wrapping (wrap around mortgage) if you want to seller finance. Use a RMLO (Reg Mortg Loan Originator) to underwrite the Wrap Buyer.
Post: Creative finance for a house that's upside down? Cleveland, Ohio.
- Investor
- Sherman Oaks, CA
- Posts 6,088
- Votes 3,921
Short Sale is an idea.
Master lease and rent to "section 8" tenant is another idea.
It cash flows. Just don't own it.