All Forum Posts by: Jim Keller

First time poster, short time listener ;) Just joined today and have learned a lot just from searching the forums. I'm a Realtor and have been introduced to an investor whose agent recently retired and he needs an agent's help. I've not worked with investors. This particular investor says he purchases using hard money loans. I have questions on 3 topics (for now):

1. What should I ask him to see if he is someone I would ultimately end up benefitting working for and if he is someone who plays in a moral manner... In our initial conversation, he mentioned making up to 5 or 6 offers a (???) and about 30% of his offers get accepted. Not sure how accurate this is...

2. From this forum, I have learned a little about HML loans but obviously have just scratched the surface. Other than they are not cash and need to be presented as financing, what in a contract/offer is any different just because it is a HML and not traditional financing? If a buyer's HM lender decides to not fund at the last minute, is there something to address this or is EMD just lost? During the purchase process, are there things the HM lender is doing to ensure they want to loan on this property? Is this handled during "due diligence" (Georgia)?

3. What else would I need to know?

Thanks in advance for your help and patience with my current amateur status on this subject...

Tim

I have purchased many over 15 homes using hard money. In California "the state I buy in" on the residentual purchase agrement you simply tell the sellers your using financing and your regular contingencies will be in place.

I typically buy with no contingencies because I have a long term relationship with a good lender I trust. I sold real estate for 13 yrs before becoming an investor. There is a huge difforance between the 2, the mind set is completely difforent. Take time to understand this, when I did I got very good at investing.

You had a question about the morality of being an investor, or spicificelly making multiple offers. The only job of an investor has is to be truthful and treat others properly, and buy property for as little cash or as high of a return as possable. If you need to make 200 offer to do so I do it. I typically purchase property that is under distress, if a person can't pay their payment I need to purchase there property.

Good luck

Jim

0 Votes

Originally posted by @Tom S.:

Eric - I ran into the same situation recently and the short answer - be persistent.

I recently found out through a title search on my property that there was an old lien from DiTech.com from 10 years ago that was paid off and but the lien remained. So I spent hours going through old paperwork and found the payoff statement. I then called every number on it and they were all disconnected as the company went out of business. Did some research on the internet and found out there were transfers to GMAC Mortgage and then a rebranded DiTech Mortgage.

Called all of those companies but no one could find my account number or anything via social security number. Finally, I filed BBB complaints against these companies stating they should still have it on record somewhere. GMAC Mortgage finally responded with a "release of mortgage" letter. I mailed that certified to the town clerk's office and got it released.

Took many phone calls, letters and about 3 months of time, but got it resolved!

Good luck and let us know how it turns out on your side.

- Tom

This is the answer........ we have completed around 150 shortsales and ran in to this many times, make it easer for them just to give you a release.

Good luck

Jim

0 Votes

Originally posted by @Chad K.:

While driving for dollars I noticed a few homes that looked distressed. I wrote down the addresses an looked them up on my tax accessor website. The owner wasn't a absentee owner so I ruled out the fact of me mailing him a postcard. An with the property be distressed I looked it up an zillow an thought about contacting a realtor but I was wondering if there are any other ways to contact a owner of a distressed property if the owners not a absentee owner.

Hi Chad

Our company specializes I'm distressed property I have purchased 2 difforent distressed properties in the last 3 weeks. I know it's the best way for an investor to buy homes. The reason is simple, the built in urgency the foreclosure brings to the deal. Become an expert and you will be rewarded handsomely, don't let some nay sayer tell you it's over. Talk to long term investors, you will hear the real story with them. Learn the tricks of the trade and enjoy working with people that really need your help. We typically start out with clients in tears and not sure what will happen to them and end with people restarting there life with are help. Call me anytime if you need help

Jim

2 Votes

Originally posted by @Christopher Hunter:

@Tae Kim Your welcome. I will be happy to add you to the list and let you know when the meeting is

I would love to come to the meeting I have a few I already attend and have deals in Fullerton and Anaheim

Jim

0 Votes

I have completed 12 deals this year and have 3 going right now. I have made as little as $16,000 and as much as $82,000. I typically buy for around $200,000 and sell slfor $300,000 I use a very high leverage hard money loan where I only have a 8% fee or cost and get 100% financing on the purchase and rehab money.

Jim

2 Votes

Originally posted by @Jeff Darr:

HI @Jim Keller and @Paul DoCampo, I'm a new investor and I was looking for groups here in the IE. Glad I saw this thread. I'll look up the group on "meet up" and hopefully see both of you there on the 3rd Wednesday of this month.

Just joined up, it looks like it's the 4th Wednesday, the 28th.

Good for you jeff I have a few deals I'm working on with people from that meeting. The Saturday before the meeting the same guys have a book club, the first meetup was last week I loved it check it out. It had only 12 people there but it's easer to get face to face with like mided people

Jim

0 Votes

Riverside, California

Originally posted by @Gregory Stone:

I'm asking as an HOA president. Our HOA foreclosed on the property, the house went up for auction with a starting bid of about $45k, nobody bid (presumably due to the the unknown 1st mortgage amount), then the property reverted to the HOA. The HOA now owns the property under a trustees deed.

Prior to the court steps sale/default of the property to the HOA, the HOA had long since filed a Notice of assessment (2009) and twice the lender filed a notice of default. The first was rescinded with a filing. The second was not, but the lender never foreclosed and pushed for a sale. I gather the lender is "parking the NOD" as they say. The last action by the lender was to file for a substitution of trustee for what appears to be a collection foreclosure servicing company called Western Progressive, LLC.

All attempts to contact the lender to get a payoff previously have been to no avail. This last filing 2 weeks ago gave me the above company and I am preparing a fax on behalf of the HOA to request the payoff amount. We think it is between $425k and $475k; everything north of $399k is default amounts since 2012.

My question is what would the wisest thing be to do here? Should we list the property and try to sell it, disclosing the 1st mortgage encumbrance and work out a condition in the sale to satisfy all the HOA back assessments and let the buyer handle the 1st? Or should we try to cut a deal with the lender so we can get more money than we are owed and also be able to pay off the lender; not to mention sell the property under market a bit so the buyer has too to either improve or flip? The last comp for a similar unit in our complex wen for $680k.

Gregory

Sorry to here of your troubles, but you have many plays here as it sounds like you know. I think the best bet is to obtain your 1st mortgage payoff and sell for the biggest number you can. The HOA could joint venture the deal or do it on it's own.

I'm wondering do you as the HOA president get solicited for such a thing and what would they need to enter into such a venture. This seems like a great way for an entrepreneur to produce a WIN/WIN for everyone. If a company could come in and manage something like this for your HOA would you see any value in that? I'm not making you an offer, just wondering if this happens enough to be an issue for you.

0 Votes

Originally posted by @Karen Margrave:

Just curious if anyone has installed solar on their new builds or other construction? What are your thoughts? I've been thinking of putting it on the house we own in Redding. It's a 4300 sq. ft. house on 20 acres. It's very sunny there much of the year, though when it rains, it can go for a month!

If you do use it, have you ever been in a situation where there was an excess?

Karen

I love to read your post, you have a great writing style. Solar just seems like a large gimmick to me, The latest attempt to PUSH it one us was done by a huge house flipper, The agents name is Polly Watts, 1000's of flips to her name in the last few years. One of my team members our "buyers agent" found a new home for her client, one Ms. Watts was selling. They attempted to add solar panels to the home as part of the sales contract. Understand they weren't installed, they were going to be sold as part of the deal. The agent in our office agreed to their counter offer not really understanding what they were agreeing to pay a monthly fee for this "big mistake I know" but 2 days before the closing the escrow company calls and asked the agent to have her client sign the solar agreement, it was just $435.00 per month.

I understand this flipping company has a huge inventory of home that all can be potential solar sites. I guess it speaks to the over all health of the market when big operators margins slip so low they need to step to this level. To go back to your question about the product SOLAR ENERGY if it was really a long term solution, would all of this nonsense be needed to sell it or is the public so stupid we need to be tricked into using it.

On a personal note we were in Redding, Ca last weekend for a wedding and went to a fabulous ranch home in the hills east of town off highway 44. we saw ranch after ranch that looked amazing and were told that most were owned by people like yourself. I'm wondering if you added the fact that you will only be using the SOLAR ENERGY 1/3, 1/2, or 3/4 of the year my guess is it just wont work out. I know they say the power could be reversed and you would be feeding the grid it just doesn't look right to me. I think I must be just to old for such dreams "free power" that cost $435 per month.

Jim

0 Votes

Originally posted by @Aaron Mazzrillo:

Originally posted by @Michael Garay:

Originally posted by @Aaron Mazzrillo:

Describing buying sub2 as "The sellers leave a house they cant keep up with, so they give over the deed to you with the loan still under their name. Then you get a new tenant in there keeping a cash flow of a bout 200$ a month or more depending on the mortgage." is the equivalent of describing driving a car as "you push on the pedal and it goes forward, you step on the other pedal and it stops. The wheel is for going right or left."

Can you elaborate? I mean sub2 are what most investors i know started off with. They dont lease out the property to just anyone, only qualified tenants. The sellers arent able to keep up with the loan but they think their credit will be deminished, so they become distressed, thats when the investor comes in and offers a marvelous solution. A sub2.

The seller no longer has to worry about paying the loan back, but the loan will of course still be under their name. So of course there is some trust involved. However, when you have it under contract you then put it out to any qualified tenants that enjoy the house, its location, and the environment. And you know they will keep up with the payments by researching their past homes, payments, jobs etc. To extend on that, you can also have them put down a considerable option, which simply gives them the option/opportunity to purchase the house, even if they have bad credit. Varies on $2,000-whatever they want to put down. If they don't have the money, that just means the house might not be for them. And if they do, well you might have found your tenants.

So overall 3 sources of income, #1 From the considerable option #2 monthly cash flow #3 Backend profit.

So i ask this the same way you looked at it?

You preach like you read all about it In a book written back in the 1990s. You don't need to explain sub2 or options to me. I've done plenty right here in SoCal. Your Disneyland version is cute, but hardly reality. As far as it being what "most investors you know started off with," how many we talking about, when was this and in which state do they live?

I do a ton of direct marketing and very few of those leads even make sense for a sub2 purchase, fewer still would consider letting an investor buy sub2 and fewer even still will go all the way through with the transaction. This is California and cash rules in these here parts. I've had many sellers with little or no equity, when offered a sub2 purchase tell me, "I'll just let it go back to the bank." And then I watched them do it.

You want to run a sub2 buying business here, you better keep your day job cause you're gonna starve... Unless you also plan on selling courses and offering coaching to all those unsuspecting students who will believe your "thats when the investor comes in and offers a marvelous solution. A sub2." glossy sales pitch.

Aaron

I to have "ton's" of marketing out all over in many southern California sub markets. We just aren't seeing many subject 2's, with that said we did pick up a lease option last week where with the right rehab we can flip with maybe $80,000 left in the end. We may also bring in a partner and hold the contract but with my bubble concern that is unlikely. I wanted to just back you up in your attempt to bring a level of reality to this situation.

The truth is there are sellers of all sorts out there and if you are the only one dealing with them you have a clear competitive advantage. We work on the premise that if we aren't the last best option for the client we probably wont get the deal. Our strategy revolve around educating the seller of all their options and putting an offer in front of them based on the top 3 options they seem to react to the most. In the case of the lease option we just picked up in Anaheim, Ca last week the seller needs 60 days in the property so we gave it to them. We solved a huge problem for them and gave them 60 days rent free, and a $200 per day rent back option after 60 days. I still have a balance of the equity purchase i owe the seller that will be paid to them over the next 40 months. I would be happy the let them stay past 60 days if it mean they pay $6,000 per month to do so. The perfect win win win for everyone.

Good Luck

Jim

1 Vote

Originally posted by @Elizabeth Matos:

At this point and because of your opinions I will look at the deal again. I also continue to pursue other lenders. Since it is a short sale and the bank may take 30 days just to make up their mind then I continue to look at other properties every day. No time to just sit around waiting, and everyone who know me knows I hate to wait. So do you all have a great private lender? Ha! I will keep in touch with this forum and let you all know how it goes. Thank you so much for the feedback.

Hi Elizabeth

I have a deal I'm flipping in Menifee right now, we will be completing the rehab in 3 weeks. I have a good understanding of when to and when not to buy, flip, or hold and would be happy to help you with any thoughts or concerns you may have about this deal and others like it.

I also work with a fantastic private money lender you would enjoy working with. I will be on my menifee job site tomorrow if you would like message me and I will give you a tour.

Good luck

Jim

1 Vote

All Forum Posts by: Jim Keller

Jim Keller has started 18 posts and replied 338 times.

Post: Working with Hard Money Investors (Buy / Flip)

Post: Advice on removing old liens from defunt companies

Post: How to find distressed property owners?

Post: Orange County Meetup( Cypress, Garden Grove, Buena Park)

Post: DFW Market - What profit are you making on flips?

Post: The push for deal 20....

Post: Tricky California HOA foreclosure

Post: SOLAR on your homes?

Post: Southern California purchasing Subject to and selling with a wrap

Post: Is this really a deal or not?