All Forum Posts by: Ralph S.

Rodolphe

Seems you're looking for a lender, not an investor/buyer.

In simple terms, you're offering a 10% return on a 70% LTV, no? Just using an LLC instead of recording a mortgage.

Actually, it seems you're getting more than 100% LTV, while still maintaining control and being able to say, "all properties owned free and clear!"

Is there a reason you wouldn't just leverage your properties in a more conventional way, at a lower rate?

Have you done any of these? I get the impression from your post, saying "I want to offer to private investors" that you're just testing this creative financing idea.

Bad idea to guarantee the return. Guaranteed to fail.

I think you'll run into legal issues, too, but not sure. Not a lawyer.

Never heard it called an execution sale, but after looking it up in the NC statutes, it seems to be the equivalent of a Sheriffs sale, which is the sale following the default on a mortgage and judicial foreclosure!

I still can't connect the dots: A foreclosure where the previous owner has the ability to pay.

I have to agree to Jon's disagreement, simply on the basis of being a lienable item as opposed to a collections affair, but I still don't think the OP should or need be held accountable in the end.

The buyer is not responsible for the outstanding property taxes (another lienable item) at the time he purchased the property from HUD.

When I was playing Realtor in WI, taking a water meter reading myself, as listing agent, and getting the final water/sewer/garbage billing onto the HUD-1, along with making all the utility name changes, etc., was all part of the
program. It went right along with collecting lien waivers from any contractors that had done work on the property in the six months prior to the sale (another lienable item and a title insurance requirement),

That so many people; broker(s), lawyer(s), title/escrow people missed this one item that is part of every real estate transaction I've ever been involved with has to be viewed as a gross error and ultimately should fall on someone else's shoulders, be it the broker(s), lawyer, title company or their errors and omissions insurance policy.
IMHO.

I doubt you have much to worry about, if it is audited, and they discover you didn't own the property when these upaid utilities were incurred, you shouldn't be charged. I'd call and just let them know when you purchased the property. It's public record and they can confirm on their own. They probably billed you in the hope you would just pay the outstanding balance.

I've pushed back when a tenant vacates and leaves the electric company holding the bag for unpaid electric. They send me a bill, and I simply explain I'm not obligated to pay anyone else's bill, and they will have to chase after the tenant, not me.

You can also check the HUD-1 Settlement statement from when you purchased the property. Any outstanding taxes, city utilities, etc. that were outstanding at that time of sale should have been listed and paid from the seller side of the HUD-1.
Your special warranty deed should provide title without the possibility of such prior debts or liens, and the title policy would require all such outstanding debts be paid either before closing or with the sellers funds after closing.

I don't know of any grants available for real estate investments. The SBA has grants, which can be used by a business to buy real estate used by that business, but they exclude real estate investment property.

HUD has a Neighborhood Stabilization Program, in which it provides money to states, counties and cities for them to use for locally controlled programs. I asked a similar question as to who had ever used one, and got no responses to my post.

http://www.biggerpockets.com/forums/16/topics/40214-hud-s-neighborhood-stabilization-program-nsp-

When you ask about using grants, do you have any that you are aware of?

The case by the SEC is 09 Civ. 6829 (JSR), and googling that leads you to http://www.docstoc.com/docs/11397920/SEC-v-B-of-A
Which is the memorandum order, and it spells out the whos, whats, and whyfores, in courtspeak.

But, in short,
In the Complaint in this case, filed August 3, 2009, the Securities and Exchange Commission (“S.E.C.â€) alleges, in stark terms, that defendant Bank of America Corporation materially lied to its shareholders in the proxy statement of November 3, 2008 that solicited the shareholders’ approval of the $50 billion acquisition of Merrill Lynch & Co. (“Merrillâ€). The essence ofthe lie, according to the Complaint, was that Bank of America“represented that Merrill had agreed not to pay year-end performance bonuses or other discretionary incentive compensation to its executives prior to the closing of the merger without Bankof America’s consent [when] [i]n fact, contrary to there presentation ..., Bank of America had agreed that Merrill could pay up to $5.8 billion –- nearly 12% of the total considerationto be exchanged in the merger –- in discretionary year-end and other bonuses to Merrill executives for 2008.â€

With all the billions and trillions being thrown around nowadays, why can't any of it fall on me? :roll:

You're assuming these two tenants don't see the end of their gravey train coming to an end (no depo, no written agreements) and aren't already looking for a new place.
Even if all you do is ask them to fill out your application and tell them you want a written agreement, they'll spook if they haven't already.
Plan for 3 vacancies shortly after closing, is my suggestion. If you have to paint and carpet each, build that into the plan as well.

Hope for the best, plan for the worst.

Oh, and don't take the seller's word for the no deposits or leases. Confirm this with the tenants.

Drain Commissioner.

Oh, I want that on my resume! :lol:

Rich, I'm in the Hampton Roads area of VA. This area has a lot of chinese drywall, and it gets a lot of local media attention. Not long ago, there was a uproar when the Director of the Consumer Protection Agency chose to visit Florida instead of Virginia to review the situation.