All Forum Posts by: Steve Crawford

My business model has drastically changed in last two years. Two years ago, we were building new and completely working on shopping centers.

Like any other business, we got converted to SFH by principles of supply and demand.

The REO supply was/is rich, and the loans for homeowners was/is scarce. But, rather than just renting, we found a huge demand for foks who still wanted to own (and I didn't want all of the maintenance) .......so we purchase the homes, get them ready, and finance them to buyers.

This model will not be as fruitful when the supply drys up and the buyers can get conventional bank financing once again. For now, it is our primary focus.

We are using Installment contract for warranty deed and default % is extremely small.

Scott reasoning is sound and obviously works for him.

We have debated it for a couple of years also.

What keeps us from it right now...........we are not selling, we are just buying. And, when we buy, because the bank owned listings can move quick, I love to be able to call the listing agent and tell them we do not have a buyers agent (ie, the commission is all his/hers).

I dont know if these agents give me a little quicker attention b/c they dont have to split, but that is my logic.

when this foreclosure buying frenzy cools down, i have no doubt my wife will grab her license.

Dave T is right on.
Absolutely no problems moving property into an LLC (assuming you and your wife are the sole owners), the deductions and tax benefits will be the same. But NOT a primary residence. You can even put a vacation home in your LLC, but if you do, it should probably be one you lease out on occasion.

1. it doesn't do you any good.
2. it co-mingles your investments with your home. Keep your home in your names or a trust.

The worst that will happen is the Lender will call the note..........assuming they find out.

If it were to rise to the level of fraud, which might take a lot, it would not likely rise to the level of criminal fraud. As for RICO, have never seen it applied as such.

Best advise, it make a smart decision. If you are violating a due on sale clause for a good reason with good intentions, you are probably fine. For example to protect the property, or to sell in Installment Contract (which is construed as violative of due on sale clause), not likely the lender will get too upset assuming you still make payments timely.

come to the midwest.........

we aint got nothing for 100 bucks a foot..... ok, maybe a few. but we do have some inexpensive properties.

Most SFH foreclosure i buy are between 30 and 50 p sq ft. I have seen them as low as 20 per sq ft (but they need considerable work).

I know.........it's all relative. We can't even hear the Ocean from Missouri. ... so our rents are slightly lower.

It was a big change from Los Angeles.

Has happened to me a few times.

First, I call local police and tell them. They usually come right over and run VIN and tag to see who owner is.

If not stolen, i search car and look for number or person to call to see if they want it.

If no luck, i put in "free" section on Craiglist and usually it is gone in 10 minutes.

My model is a bit different.

Right now we buy foreclosures. We have flipped a few, but most we finish, take photos, put online and do lease option or Contract for Deed.

We try to cash flow about 2500 per year per house. We mark each house up depending on what the market will support. We try to get a few thousand down to help re-coup some of the money we use to rehab the property.

We find houses at auction, bank REO, HUD, and local Multi List has plenty of foreclosures.

We finance each one individually with local banks.

We have a great group of contractors and we really let one project run right into the next, if that makes sense.

we use the same carpet, the same laminate, the same paint, same landscape stones, red mulch, plants, etc.

We use all local contractors and rarely do we wait for them. They jump right in, they know each other, they work well together, and then they bill us.

We have had rehabs that take 5 months and we have had some done in a few weeks.

I have a day job, about 50 hours a week, and purhcased and re-habbed about 30 single family houses in 2010.

I buy close to home, act as my own general, and use the same subs each time. If you can get a routine, (hide key in same place for everyone, same type of carpet, paint, etc.) it will go a ton easier.

My wife handles the utilities, and helps out where she can, and i have two sons that love to make extra money in the evenings.

We go hard in the good weather and slow down a lot this time of year.

We have had fires, floods, tornado damages. All bad.

But, hands down, the most interesting was the meth lab that blew a house up.

I didn't know the cause, so I moved the tenant down the street to another house. The next week, police show up to my office and explain the meth lab. Tell me the guys name and ask if i know where he is............................ uh, yeah. i moved him down the street a block.

They made the arrest.