All Forum Posts by: Richard Gleason

Manny,

They are good deals, but to buy and hold for 3months to a year isn't really an option for for the following reason...
1. Once I purchase @ 60k... getting a conventional loan 3 months later @ 130-200 (at least not in the area where units are) could be an issue.. MOST lenders (mgmt comp appraisers) want to see @ least 1 yr seasoning. The value would prob come in slightly higher than the 60k purchase price if I go that route.
2. Because of reason 1 I'm not willing to purchase the units cash and hold them, or purchase them with hard money.

Hey Chris,

Did you get a chance to put those lenders together as of yet?

Chris,

I need you to add me as a colleague in order to send you a pm.

Chris,

I have looked for said lenders and I'm not sure if they exist anymore... and if so I would love help finding one. Buyers will go to any lender all scores income and assets would qualify for any conventional lender.

So... Manny any Suggestions?

@ Sheri, yes but the b to c buyers bank has a seasoning condition...

@Chris, I will check with the buyers bank (as they all go through LO's that i know can speak openly with) and see if they allow assigning of contracts.

@ Andy he knows that I am making a profit however he doesnt know the extent of my profit, which is the problem that I had with the original Private investor that I use for the past year and half.. He would finance end buyer for 6 months and they would refinance to a conventional loan... problem with this is he continued to see my profits and tried to back door me and then renegotiated his fees. While Im not at all greedy he didn't/doesn't understand that my overhead (Home buyer seminars, inspections, lead generation, flyers and renter guarantees that i make with the buyers) add up to sometimes my after dust settles my fees only being 500-1k. He only sees the hud with me making 20-70k. but often buyers are promised Garages ramps for elderly Gates new roofs etc word of mouth and contracts signed for these after closing to keep legalities in order, but he doesn't see that part but its what keeps my integrity with buyers and allows me to continue to have a steady flow of end buyers.

Chris,

This is neither a short sale nor REO... It is a seller that is essentially wholesaling his seasoned properties, and I have buyers for said properties and wish to purchase and resale to them. They (the buyers) intend to occupy the properties, they have credit worthiness and are RWA to be be financed. The banks that will finance them have seller seasoning requirements (ex.seller must hold title for 6 months before selling if a higher value is to be given).
Here is an example.. One property is a 2 unit rehabbed building that is rented on one floor for 1150 (section 8) the other floor is vacant (buyer will move in owner occupied) Seller is selling to me for 75k I have buyer under contract for 120k (Comps range from 115-300k in these areas). I have 10 units under contract with this seller @ a range from 60-90k with values ranging from 115-300k. I have end buyers for those 10 and seller has over 15 more units that im looking to pick up as well.

Is that enough info?

Hey BP, I have a quick scenario I wanted to run past you guys... I have a few deals on the table that I can purchase (Cash), and have end buyers in place. The issue that I foresee is seasoning on title... The end buyers that I have all need financing, they all have good scores good income and solid seasoned funds. All buyers are Pre-Approved with reliable lenders and im sure they will close the only issue is the banks have seasoning requirements (ie seller must own property for 3- 6mos sometimes up to a year). The current sellers have seasoning on the properties.. but when I purchase I wont... any ideas???

Luc,

I personally wouldnt make this HML @ those terms. 9/2 is light.

Lets start out with whats good about the loan...
I like the fact that he has acceptable DU findings for a refinance if he needs to, and the fact that he is putting $ in the deal...

Factors that shouldn't deter you..
-No PG..(if deal goes south, you want the property, not the individual)
-First Deal
If this is his first deal I don't think you should throw the deal out... It just means ur due diligence should be more thorough, everyone has a first deal.

What i dont like...
I have to disagree with Jeff S. about no doing business with the guy unless you know him/her. (No offense Jeff) If that's his business model and it works for him great but I personally dont find it necessary to only lend to people you know, I think the deal is more important. What i do agree with is the latter part of his post, the numbers are awful... 70k to rehab a 1700 sqft home... i gut 3 flats for less than that.

My suggestions...

I would find out more about the deal (if he has GC... him to provide contractors bid for work w/ license)

I would restructure deal and loan about 50k MAX (on this deal)

Int rate between 12-15% (depending on his experience)

That should get u started

Rich

Afternoon Rich,

As an investor, I would have to agree with Alex that no investor would find this deal appealing, and if by chance they did why would they allow you to do it an not a family member who the trust.

As an investor this is what I hear,

Hey I want to use your money to by a nice place in a nice neighborhood, fix it up really nice, live rent free, because I have to get out of my Moms house but I don't want to pay rent. I will make sure you receive your rent payments (which tenants usually mail or deposit directly into account for landlord,) not really a benefit, and make sure units are rented*.

The only benefit I see is getting the unit rented, however here are the issues.

1. You finding a unit (I have SEASONED Realtors/birdogs and wholesalers for this)

2. You fixing up property (I can probably get a team cheaper and than you seeing as how this is the business im in)

3. You want to live for free in a unit that I can rent. I can pay a management company 150-300 per month (depending on area and units i have with them) manage the property for me.

Again this response is not in any means to discourage you, I just wanted to give my thoughts(as an investor) and share with you what I heard when I read your post.