All Forum Posts by: Rodney Smith

@Troy Smith 

Well, a quick update. I've sent off a letter to the inmate last week requesting visitation papers and a phone call from him. In short I told him what i'm trying to do. Also, I spoke with his ex wife who was on the deed initially, but has apparently been removed during the divorce process (I still need to verify this at the recorders office, but figure i'll wait till I hear back from the owner). But this seems to all be good news because I should at this point in theory be able to only deal with the inmate as the sole interest and seller if I can get it tied up before foreclosure. 

Does anyone know of a good way to organize a professional way to structure payments on a private loan? What I mean is that I have a private loan from a family member and I could simply print an amortization schedule online showing the payment structure and send a check each month. However, I would like to try to step it up a notch to make it a little more professional than that. is there a 3rd party that could keep track of payments and send mortgage bills etc. or am I just best off doing that all myself?

So i've recently bought and rehabbed a house which my neighbors have appreciated, and we just moved in a few weeks ago. Interestingly enough there is still one more 'problem house' a few houses up from mine which is really the last major eye-sore in the neighborhood. The current squatter living in this property knocked on my door the other morning to inform me that he's moving out for 'cash for keys' that the bank has offered him to get out, and told me that the house will be going up for auction and that the balance on the loan was only $35k ... so he said I should buy it basically and fix it up like I did my current house.

So after giving this some thought, I figured i'd double check his claims against the docs at the county recorders office, and found that there might be an even better opportunity available here. The guy who owns the house is actually in prison (which i've just tracked him down and am working on getting in contact with him), but the house has actually not been foreclosed and has no trustee sale docs or a date for auction. So my thought is that the bank was B.S.ing him to get him out of the house and do the cash for keys deal. So the house wasn't foreclosed yet, but did go into default as of July 2014, so if i'm lucky I might be able to arrange a private sell between the owners and myself before foreclosure and having to deal with auction competition / banks etc. The amount of the original loan on this property (and appears to be 1st position) is only $49k and the remaining balance as of July was $20k plus interest and late fees. So I'm thinking I should offer this guy in prison something in the ball park of $23k to buy the house and put a little change in his pocket, then rehab the house (which is in rough shape, could take $40k isn) and then either rent or sell the house. I'll try to list out the #'s in an easier to read format.

Tax assessed value 2013 - $115k

Orig. loan amt. $49k

Current Bal. $20k + interest and late fees

estimated rehab costs - $30-$45k (still need to get harder #'s on this but after speaking with a contractor he thought the could do it for $40k or less)

So I guess my question is has anyone pursued a deal like this before buying from an inmate? Any suggestions, advice, warnings?

Thanks!

@David Frandsen @Aaron Nelson 

@Aaron Nelson I think your a very savvy guy, so I think you'll have success if you decide to do this, because like you said, worst case scenario seems pretty palatable. At least thats how I like to look at this type of project is to simply say whats my exit strategy if it gets ugly, and what recourse could come back on me (aside from losing that particular property and invested monies).

Anyways, one thing that comes to mind for me is the Redding demographics and wondering how that would play into my renters pool. I have a 4-plex on churn creek (further south by Enterprise area, which is a less desirable location than what you've got and attracts the corresponding folks), but i've noticed that it really takes a lot of time and a lot of screening to find tenants that aren't a bit sketchy. I've not been in redding as long as you (i've been here 4 years) but my impression is that the vast majority of the people I get applying are smokers, exhibit possible signs of being a junkie, are unemployed, have pre-scribed pets, etc. My fear is that if Bethel school runs into a problem or goes away for some reason I would feel as though I would be really digging hard for people to rent to, especially if I had a large number of very nice new units to keep full and keep nice. I'm probably being a little pessimistic, but I know that it's a thought running through my mind right now with my own investment strategy.

However, I am getting some good business from Bethel students and recently just got our first AirBnB renter from out of town, and are starting to get backed up on furnished rental demand.

Also, i'm sure you could likely attract retired types to live in your units which wouldn't want my 2/1 apartments. Or even traveling professionals. Also, like you said, you could sell off chunks of the property and keep whatever porting of the units you want.

I guess i'm rambling a bit, but like you said, you've got an A location and and where there's a will theres a way. P.S. ... just curious but do you currently hold rental properties in the Redding area?

Thanks @Karen Margrave I would like to have someone for my rolodex. I'm finishing up a bunch of projects currently that may be useful if you have a good contact. However, I do have a flooring project coming up installing laminate floors that I might need some help with.

I own a 4-plex and if it were me, I would turn over all of it, because it is not mine but the tenants money held as security for damages and prepaid rent. I think the tenant would be wronged by having to pony up the security deposit and last months rent again (which they've already paid). On a legal note I think you could probably really get yourself into trouble by keeping it as well. You would have to seek legal advice to be sure of that, but it would seem very unethical to me if you kept the monies, I would definitely turn it over to the new buyer.

I guess I should clarify that what I would be needing handymen for are things like, flooring installation, small tile jobs, painting, kitchen cabinet work, etc.

Hi everyone, I'm looking for a good handyman (by good i mean he works at a brisk pace - I don't mind paying him a fair price, but i'd like someone who is worth their wage). Can anyone recommend me to a handyman in the shasta county Redding, CA area?

Thanks!

@Aaron Nelson 

@David Frandsen 

Reading that post brings up a question for clarification as well ... If I were to take the route of a 1031 exchange and roll the gains into more property, does the property have to be a single property valued at $150k or more, or can the gains be spread over multiple properties adding up to a total of $150k +

Also, @Aaron Nelson I would love to get your advice / feedback on staging our 4-plex in the route of choosing to sell it. I have a few things in mind and would like to bounce them off your wisdom. Let me know if you would be available at anytime to have a quick chat about it. 

Thanks everyone for your feedback!!