All Forum Posts by: Tom Mole

@JaNarria Johnson, this is the same question you posted under another thread entitled "What do I do for a foerclosure?" I posted a reply there which was way to long to quote, but the gist of it is this. Wholesaling a short sale is like stacking bowling balls. You have other options. Whether or not it will be a good deal for you depends on the numbers and your level of competence. If you're not sure about any part of the deal, get some help from an investor seasoned with foreclosure experience in MD.

If you do go for the short sale and the lender agrees, the beneficiary should stall the foreclosure process until that phase is resolved. The lender may have waited this long due to the owner requesting a loan mod or even asking for more time to get the loan back into compliance, so waiting just a bit longer probably isn't the biggest problem. A bigger problem for a short sale is getting the junior lien holders to agree.

If there is a junior lien, you might trying making an offer to purchase it at a substantial discount, cure the foreclosure then start a foreclosure from the junior position. Just be sure to it right. If you're not sure, ask for help.

Happy new year!

@Joshlee Ulysse, talk to your friendly title agent. Tell him that you'd like to find properties that were recently purchased without financing and start researching who bought it from there. That's how the machines do it to sell you buyer's lists they provide. You can do this yourself and save some coin.

I've got to agree with @Dirk Smithson, however, its better to go where the buyers are, walk up to them and say something like, "Hi, my name is Joshlee. Do you buy properties for cash? How can I help you make money?" then shake their hands and get there cards. So where do you find the buyers? Go to the auction and see who bids. Go to your local REIA and meet everyone. Ask who the cash buyers in the room are.

Mostly you won't meet too many buyers by cold calling lists of buyers. The reason is that you don't have a relationship with those buyers. It's a lot more cost effective to build your buyers list than it is to try buy your list. Your net worth is a function of you network after all. No getting around the work.

Happy Holidays!

@Yetzira Anselmo, it is possible to stop a foreclosure, even when the auction is eminent. It can be tricky, however, the closer to the auction you get. A short sale is unlikely when the date gets close.

How likely is the property to be bid on at the auction? Is there equity in the property? Are there any other liens on the property? If the bank can get more at auction and have come this far, it seems unlikely they'll entertain a short sale. What is the published bid and what were you offering on the short sale?

If there are junior liens and no one bids at the auction, you may be able to get an even better price from the bank AFTER the auction. There are just too many maybe's to cover in this post. Send me a private message with a few more details. I'd like to help. I know someone you should talk to that can help, if anyone can.

Happy Holidays!

@Tyler Fernandez, first of all let me commend you in being unafraid of eating the elephant. Keep in mind that an elephant is best eaten one bite at a time. That being said, it's inspiring that you're ready to take action despite the big numbers involved in a tricky market like Los Angeles. And...you are wise enough at the tender age of 19 to ask for advise before jumping in with both feet.

If you are getting into apartments with 5 or more units, then your credit is not you biggest concern. The bank will look at it your credit surely, but commercial lending is primarily based on the asset. You'll be able to get a large enough loan provided the deal makes good enough sense, but it won't be easy. Commercial loans are more difficult to get than residential. Then will likely ofter no more than 65% LTV, which means 35% down (ouch!)

If you negotiate a nonrecourse loan and things go sideways, the bank will NOT come after you. The key is NON-RECOURSE. This is something to be worked out with care. 

It sounds like you would welcome some help in this area. It would be a fantastic idea for you to partner with one or more experienced investors who can help you find the funding and structure the deal. There are several people I know in the Los Angeles area that might be able to help you. Send me a private message so I can get their contact information to you.

Merry Christmas!

@Matt Laird, I've got to go along with @Mike H. , you ge the Big Brass Balls trophy on this one from the sound of things! You are bound for success!

I don't know the foreclosure laws in OK, so check with a local attorney, but there are a couple of things that are pretty much universal. Have you run a title search? Did you buy out the first position loan or a junior lien? What property taxes are owed? What is your exit strategy?

It's not the end of the world if you bought a second, but it could be tricky. If there's an IRS lien, it should be wiped out, but check with you attorney about that. The IRS has a right of redemption period that they always let expire, but you wouldn't want to be the one who put money into the property just to have the taxman take the property back.

Congratulations on jumping in there and getting going. I wish I had the sand to that.

@Tyler Silver , keep in mind that you need to look at any project as though you were going to put your own personal funds into, even when you're planning to wholesale it. As a wholesaler it's your job to get a "great deal" under contract. You'll notice that property has often been on the market for a long time and investors have passed on it exactly because it not yet a "great deal".

Of course, when the seller is truly motivated, the property moves quickly. Remember, often, the longer a property sits on the market that more motivated the seller becomes. At some point it stops being a "good deal" and becomes a "great deal". Persistence, my friend, wins! Don't settle for a "good deal", rather find the seller's pain, amplify it and offer to resolve it.

While you're keep your finger on the pulse of one motivated seller, go find another then another and another. Lather, rinse and repeat. Often you can push a seller a bit by letting him know that you have other more motivated sellers you're working with. They sometimes worry that they might lose their motivated buyer (you) and they take action.

Finally, never stop looking for YOUR motivated buyers. Talk to your cash buyers. Take them to lunch. Find out what they want to buy, then go find it. Sometimes you can talk up an opportunity that seems a bit marginal to you, but your buyer says that its just what he's been waiting for. Keep this in mind when evaluating a deal, the difference to a wholesaler between a "good deal" and a "great deal" is what his CASH BUYER thinks of it..

All the best.

@Tyler Silver, it sounds like you found a couple of better deals. Have you made offers on them yet? They, at least, get closer to the 1% Rule. 

What is this neighborhood really like? If it's a C or D, are you ready for all the work it's apt to take to keep these properties performing? I don't know anything about the NY marketplace, so I leave that to your own better judgment. 

In any case that sub-2 deal doesn't seem to make sense in light of the other two properties you found. Perhaps some kind of seller financing would work with these new projects. Keep us updated please. Good hunting.

@Tyler Silver is wholesaling your only option? You're gonna want to learn more about the existing financing. You never sub-2 bad financing, but if the financing is worthy, is there any reason your seller would object to you using his credit?

Tell me something, what would this project rent for? What sort of neighborhood is this in? If the financing is solid, would you consider learning to do a sales-lease option? Perhaps you know a buyer who would consider such an exit strategy.

All the best.

OK, @Lizina Green, you may have found a gold mine, but you haven't actually said anything about the value of the property. Is it worth anything? Has it fallen into decrepitude or could it be rehabilitated? 

If the property is still valuable enough, you could talk to the owners about selling the property to you anytime up to the day of the auction. They seem to be completely disinterested in the property. Perhaps they would be willing to sign the deed over to you if you'll take over payments; kind of like taking over a car payment for the pink slip. If you take the deed, you'll also get the liens, junior, senior and everything else. What encumbrances are there on the title?

Before taking title secure the permission of the owner and negotiate any junior liens down. This should help create equity.

How much is the defaulting lien in arrears? Can you bring the loan current? Can you maintain the payments going forward? If you fix the place up, how much would it be worth? If you just made it clean, safe and livable then rented it out, would it cashflow? Even an underwater property can sometime cashflow. 

The bottom line is this, yes, you can do this. That being said, until you have more info about the deal, no one can say whether or not you should do this deal. I've asked you a bunch of questions, so if you answer, I'll answer you. Fair enough?

All the best.

@Pamela Holmes  what is the seller's story? How did he get behind on his taxes in the first place? Why wouldn't he fall behind again? Is this house just too much for him? Is he willing to move? What is his greatest fear? What would he like to see happen in a perfect world? Does he have a mortgage? How many years are left on his note? What are his monthly payments?

Probably the best way to structure this is to buy the property from him altogether. If he wants to stay, you could lease it back to the seller, perhaps with the option to buy at some future date. In this case, if he did not perform on his payments, you could evict him, rather than foreclosing. I think this is what you were asking about in the first place.

That being said, there is a lot of unanswered questions. I don't know enough to say whether this would be good deal or not, but I assure you there is more to consider than just the back taxes.

A title search would tell you about other outstanding liens and encumbrances. A rent survey would give you some idea about the viability of holding this for cashflow. If your seller has the means to make his payments, you may want to wrap his mortgage (which is something of a tweetable topic in its own right) in order to secure long term financing.

Does this help? You CAN do this, but until the other questions are answered, I can't say whether you SHOULD do this. Let me know if you have any answers or other questions. I'd love to help you.

All the best