All Forum Posts by: Steve Hodgdon

@Matthew John Yeah, just nuts. Can't expect to cash flow anything without huge down payments. Most of my recent work has been in FL. I have 3 mortgages in MI. didn't buy them well, so turned me off on the market. When guys in the midwest see a California investor, full price + 20% is the usual routine. I'm looking for seller carry paper. Would be interested in partials there.  Let me know what's up. 

@Brian Ploszay  As a note buyer, I have lots of stories on why that's been the worst part of the niche. And the one about the guy who flooded his own basement during foreclosure to start a mold problem...

Wow! that's fantastic! Congrats! I've been nibbling at land. But was sending mailers on infill lots. 2 acres and smaller.     Any words of wisdom.? How big was this parcel?

Go look at www.garyjohnston.com . He has a library of books from the old timers. I'm particular to Pete Fortunato and Mike Cantu as they're in the biz, not authors. should be some free stuff on papersourceonline.com too. I buy/sell seller finance paper .  Congrats! Go get em!

Go look at www.garyjohnston.com . He has a library of books from the old timers. I'm particular to Pete Fortunato and Mike Cantu as they're in the biz, not authors. should be some free stuff on papersourceonline.com too. I buy/sell seller finance paper .  Congrats! Go get em!

I just walked away from a 4 unit property on 1.5 acres in Nor Cal. Put $40k in escrow. did lengthy inspections. Found $200k in deferred maintenance. (primarily a 70 year old septic system that was failing). Took a bunch of my time. Countered with $150k price reduction. Was in contract @ 1.3 million. Seller said no. I went on to the next one. Would have gross rents of $8k/month once rehabbed, which is pretty good for the Bay Area.

You can make a full price offer. Explain that means it's rent ready, no deferred maintenance. Part of contingencies are proof of income, (bank statements copies of rent checks), full inspections, estoppels, credit checks on tenants, confirmation of Sec 8 inspection approvals. 

Personally, I don't like the 1920 part. Knob and tube wiring? What wouldn't pass code today? 

Remember when real estate collapsed in 08? Are you prepared for that again? Can you afford to feed the project if everything goes sideways outside of your control. Took me 8 years to climb back from a purchase in 12/06 that was worth 1/2 what I paid for it in 3/08. 

Last 2 deals were a twist on this. Seller and flipper became partners. Seller contributes property, buyer/flipper contributes work and rehab costs. Revenue share is negotiable. Flipper gets TIC interest for whatever percentage. Revenue share above benchmarks for each.

Example:

Property negotiated purchase price = $130,000. Included $20k "guaranteed profit" as basis was $110k

Flipper contribution T&M = $60,000. 

Seller deeds 1/3 interest to flipper.

Property sold at $220k net of closing costs and realtor commission.

$30k above the combined $190k split 50/50. Each side got $15k. 

Was a skinny deal. Property values softened in Crown Point IN.  Took 6 months end to end. 

Looks like a CFD does serve purpose. Ask local title co for guidance

@Nik Moushon getting cash out of seller finance land deals is problematic. We have done several financing deals. Typically we like to buy part of the notes. We have bought notes on land sold to builders. Down payment is an indicator of borrowers intent to pay. We're in the paper business as well as real estate investments. Happy to talk off line.