All Forum Posts by: Jeff G.

Did anyone here legitimately start on a shoe string and have major success? I've read some interesting posts about individual deals, but what about the longer view? I know gurus like to hype stories like this (and I always wonder if it's pure sales fiction complete with paid actors) but I'd like to think it actually happens in real life to real people.

I'm genuinely curious.

~Jeff

Thanks @Rick H.

Yes, it's a voice mail box that puts the incoming call data (and the voice mail itself) into a CRM. I return calls later that evening (if possible) or the following day if I'm swamped.

Thanks for the advice.

~Jeff

Hello,

I am about to start marketing to probates. I don't answer calls live, because my schedule precludes it, but rather my calls go to a voice mail drop. I realize this isn't optimal but it's the only sane way to do wholesaling and my day job at the same time.

For my other lead types I have an up beat sales-y voice mail. But, I feel this is completely inappropriate given the somber nature of the occasion. Do you have any suggestions on how to best handle this?

~Jeff

@Chris Pasternak

It's my (non-expert) understanding that in some jurisdictions, e.g., Michigan, it is permissible for tenants to withhold rent if there is a MAJOR issue with the property. Not having heat would fall under this category. Though, there are usually hoops a tenant must jump though in order to do this in a defensible manner.

In states that allow this it this, it often takes the form of:

• The heater (or whatever) goes out and the landlord isn't addressing the issue in a timely manner.
• The tenant gets fed up, and fixes it himself (or hires it out) and then deducts that amount plus incidentals from his rent.
• Then the tenant writes a letter to the landlord explaining that he's deducted from rent and why he has done so. 

This isn't permissible in all states. Connecticut housing judges usually frown on this kind of behavior from tenants.

Be careful, if your tenant's heat has gone out AND the temperature in the unit has dropped below a certain temperature (usually 65℉) the property could theoretically be declared uninhabitable. Granted, this usually happens in the winter months but it's still a possibility.

Stopping ALL rent until some major issue is fixed is usually forbidden. But, the judge could be sympathetic. Put yourself in the judge's shoes and consider the optics of the situation from his perspective.

All I'm saying is this issue it's not cut and dry. You should fix the heat and contact an eviction attorney and discuss the specifics of the situation first.

Good luck with your situation.

@Troy B.

I've only ever really rented via 1 year lease when I was a renter. So, I question the wisdom of such short leases. I personally would never have a breakout clause in most cases.

Additionally, it sounds like you might not be screening tenants properly. Besides criminal history, credit, and other obvious factors you need to see what their rental history is like. Did you call their previous landlord during the application phase? Do they move around in less than 1 year increments? If so, that should have been a red flag.

If you're in an especially low-rent market (and it sounds like you are) and you're concerned a 12 month lease will make you less competitive, you might consider using an inexpensive loss-leader like a "free 40-inch TV" with a 12 month lease as an incentive to sign.

Just remember the price of the TV when you need to go after the tenant for a broken lease.

@Account Closed

The property is an asset owned by the legal entity. LLC's and trusts are used for all kinds of things. The property dose not change hands, the ownership of the entity changes hands--containing the asset within.

Example 1

You might be aware that under some conditions when you buy a house it comes with title restrictions: e.g., you're not permitted to transfer title for 90 days or whatever. A common strategy to bypass this restriction is to purchase in the name of a legal entity and do the rehab work quickly. Then, sell the legal entity itself to the end-buyer bypassing the deed restriction; because the deed proper never changes hands. The property is an asset of the entity, in this case likely an LLC.

Example 2

You find a smoking deal where the seller of a house: the seller just wants out from under the mortgage because the house is underwater. You agree to take over the small monthly payment of $400/mo  and to give the seller $20k cash. You believe that the property will rent for more than enough to cover the expenses, including the note and project $250 in cash-flow; your minimum deal standard. You know the property has a due-on sale clause contained in the mortgage paperwork which you need to side-step.

To accomplish this you have your closing attorney create a trust called [property address] trust and make the seller the executor. You pay $20k and have the seller transfer executor status of the trust to you. You are now in violation of the "due on sale" clause, but have concealed that fact through use of a trust. You now control the property, through the trust, and the seller has walked away and moved on. The property is an asset of the trust.

These are all hypothetical examples and not legal advice.

Are things a little clearer now?

Congratulations @Nick Horob!

@Matt Devincenzo

I haven't read over his mortgage paperwork, so I can't be sure. I'll likely meet with him this evening and see if I can get a look at the paperwork he's referring to. All I can say is the seller is under the impression he can't rent the thing until his note is payed off.

I have only run into this one before, in passing, while talking to an LO about a property I ultimately didn't buy. She was under the impression I couldn't use certain lending programs because I wasn't going to live in the property for the 30 year duration of the note. I'm not sure she had a fully accurate understanding either.

Hello BP family,

I'm working with a seller who is in a tough spot. He has a tiny (sub 700 sq ft) two bedroom that he's underwater on. He's motivated as all heck because he's relocating to another state. I ran a subject-to deal buy him. Or, rather, he's had other wholesalers offer to take over his payments and rent it out and knew what I was thinking.

His major object to a subject-to deal isn't the "due upon sale" clause. But rather an "occupancy clause" which prohibits him from renting it. I've never encountered this. 

I'm open to suggestions on how to overcome this roadblock and help this guy out. Depending on the numbers I might consider holding the property myself. Or, I might just assign it for a quick payday.

What might my options be to proceed and make this a deal?

Oh, and @Rob Chamberlain welcome to BP!