All Forum Posts by: Ted Akers

Two more thoughts here. Joe's current position of being capable of finding the deal but without a financial contribution might be more suitable to him wholesaling to build up cash rather than a buy and hold position. Your SDIRA can likely get higher returns than funding a house and rehab entirely with cash. Your SDIRA can borrow a portion in order to achieve leverage, but only from select local banks because the loan to your SDIRA has to be non-recourse.

Hey Bill,
Write that book. Can you start tomorrow....:)?

You have received a lot of great advice here. Your cleanest option is not to loan Joe the money under a note, but for your SDIRA to fund and own the property with a Joint Venture Agreement spelling out profit/revenue splits to Joe. That way if things go wrong and the relationship sours you are not chasing Joe, or worse possibly having the time and expense of a foreclosure. That being said, I look first for integrity in anyone I am funding or Joint Venturing with, which it sounds like you have found that in Joe. However, much can go wrong with a rehab, even for experienced rehabbers. The net result of a rehab going wrong almost always equates to being over budget or a poor job that is not marketable without it being fixed. You two could become great partners in the future, but I would never fund somebody's first rehab unless, and only maybe, it is no more than a cosmetic carpet and paint type job - and even then only with a firm handle on what the expenses will be. In general, you do not want a first time rehabber learning the business with your money involved.

Short Sale banks have historically allowed for payment of delinquent HOA dues. However, I am hearing that some are now not allowing HOA fees; which is interesting in that the HOA lien is usually superior to the banks lien. Did the short sale package and prelim HUD show the delinquent HOA fees as a payoff?

99% of all short sale approvals specify that the homeowner cannot receive any benefit or proceeds of sale, other than relocation assistance if approved by the short sale bank. Your approval letter likely addresses both issues, as will the Affidavit. Check the approval letter to verify that the bank is waiving the deficiency and remind them or the realtor of the amount being waived. Good luck.

K. Marie Poe Which title company are you using. If it is a smaller company do you know which larger insurer they are using to underwrite? Thanks,

We have not seen title companies require disclosure to the seller on assignment deals from private sellers, and transactional funding allows for separate distinct transactions and funding where profit need not be disclosed to the seller or the end buyer.

In order to fund REO's on a double closing most require disclosure to the seller that the buyer/investor is an investor and language such as "I am an investor and intend to (or reserve the option to) resale for a profit" has been considered appropriate disclosure. You may be working with the wrong title companies. In my funding of both back to back and extended term short sales and REO's I have yet to see a title company require the flipper to disclose the amount of their profit.

On short sales all title companies require the disclosure above to the short sale bank that the flipper is an investor, and as a transactional funder I will not fund without that disclosure. But again, I have yet to come across a title company requiring the amount of profit to be disclosed for either short sales or REO's or HUD purchases. I have also not heard any title company argue that transactional funding (or hard money) used on the first transaction does not constitute separate and distinct closings. Double closings do have more moving parts but transactional funding came about as a noticeably less expensive option to hard money.

Hi Jason, If you anticipate continually funding ongoing deals I prefer a joint venture that allows you to take control of the property as of a certain number of days after funding it. A mortgage and deed of trust is the common way to secure your interest, but a Joint Venture can allow for you to take control of the property if things were to go bad on the property, or more importantly between you and him, without having to go through the foreclosure process. However, A JV is more appropriate for larger amounts of capital and an anticipated ongoing relationship.

Hi Bill, This one is in Florida. I will end up running it to an FL attorney but was hoping I could find a good form for a starting point.

Thanks,

Does anyone have a form of an Installment Sale Agreement that they have used and are willing to share?

Thanks in advance.