All Forum Posts by: Robert T.

Pros - you don't need all of the money to purchase up front

Cons - typically you don't get the deed until finally paid off.

These are often thrown about by the gurus who come through town pitching "no money down" purchasing.  They have their place, but are probably better between people who know each other already and are familiar with this type of contract to start with.  When I first got started I ran this by my attorney who said I was better off just buying it outright.

As a seller, I would be suspicious of anyone who presented a land contract to me.  I'd be asking/thinking "Why aren't you using a bank?" and "It sounds complicated".  Both of these are big hurdles to overcome with an unsophisticated seller. 

Just my opinion, and I'm sure others here have used them with success.

Robert

I understand that this is an inherited property, but try asking for a copy of Schedule E if possible from previous year's taxes returns.  This may help you determine what the expenses are for the property and what improvements if any have been made.  

HTH,

Robert

Christy,

1.  Some of this is just the bank being a pain.  I'm guessing you are using the predominant local bank in Oregon they are difficult to work with.  I use a big nationwide bank and don't have problems with this.  Business accounts are pretty loose when it comes to deposit names.  If all else fails, just deposit in the ATM - I do this whenever I suspect I might have a problem with a teller accepting a deposit.

2-3. Regarding a loan in the LLC, that's pretty typical. They'll often require that you deed the property out of the LLC into your own name before making the loan. Your loan officer should have actually suggested this. The problem is, they might also frown on your deeding it back into the LLC after you close on the loan.

If your rental properties are all going to be leveraged so much that there's no equity left, you might consider skipping the LLC unless you personally have a high net worth that would be at risk. If you have limited net worth, then your insurance and umbrella policy might be a better option and less of a challenge.

HTH,

Robert

See other post on ListSource

Robert

Mike,

Consider writing your own and mailing it through a local service.  Many of the Penny Saver type magazines do their own mailing and bulk mailing services and are more affordable.  You can also talk to the person in charge of bulk mail at your local post office and see who they would recommend for bulk mail services.  They deal with the local companies and know who's reputable and can give you recommdations.  That is what I've done.

I'm personally not a fan of most of the yellow letter material because I see so many identical post cards from different people. It doesn't take that much to get a list and to write your own postcard.  If these vendors had exclusive markets for their customers, it might make a difference.  Otherwise, you might have 3-4 people in the same zip code mailing the same post card and the only difference is your name at the bottom

In the end you will be building your own brand if you write it yourself and people will be more likely to keep your postcard rather than tossing it along with all of their other spammy postcards.

HTH,

Robert

Spend some time with an experience rehabber so you can accurately project rehab costs.  @Aaron Mazrillo often states that to be a good wholesaler, you need to have first been a good rehabber.  I know this is not the order you are looking to start with, so spend some time learning how to estimate rehab costs.

Also, I wouldn't suggest setting up any kind of corporate entity until you have done 5-10 deals.  Everyone wants to start off with a entity of some time, but it's actually wasted money until you have some assets worth suing over.  Often, the people who are pitching legal entities have some financial incentive in the pitch.

Skip the store's policy.  They're over priced and you are correct - a home warranty covers more for the same price.  I never register the home warranty paperwork, but leave it all in a kitchen drawer for the new owners to register in their name.  Avoids the whole issue entirely.

Ouch.  I hate painted popcorn, but I have still been able to remove it with lots extra work.  It took 3 days to scrape a 1,500 sq ft house.   When I did it, I thought about using one of those wallpaper scoring tools to pierce the paint but never tried it.  

I have also seen people hang 3/8" drywall right over the top of the popcorn and it looked great.  You'll probably need a good mud/texture guy to make sure it all is floated out and looks good since your screwing over existing popcorn and may not have clean seams.

Justin,

Have you considered a 203k loan?  These loans are specifically designed for what you want to do.  Just google 203k loan and you will find lot's of local brokers who can help you with this.

I would also call a couple of your local hard money lenders and just tell them what you want to do.  The advantage of a hard money lender is they can tell you if your numbers are accurate or if you are being realistic about everything.  Yes, they are more expensive, but that's part of the cost of learning when you are first starting out.

Andre,

Is there any way you can work out a payment plan with your lender to keep your house?  You already have your foot in the door, even if you have fallen behind.  If your payments are too much based on your current income (not counting the lost work), then I understand why you would be selling but it's hard to imagine a 72k loan being more than your rent would be, even after adding taxes and insurance.

If you do have to sell, then you probably won't like my answer and it probably won't be very popular here. I would suggest renting for now and getting your financial situation back on solid ground before even thinking about investing.  I would also recommend taking one of Dave Ramsey's courses to help you get back on track financially and have a 3-6 month emergency fund set up so that life situations like you just went through won't set you back as far as it did this last time.  Life happens, and real estate investing requires having good financial reserves for when things go bad.

I know my viewpoint isn't popular, but it comes from experience, and learning things I never wanted to learn.