All Forum Posts by: Adam Reynolds

Congrats on finding and executing a great deal in a challenging market. Would you mind sharing how much you put into the rehab and what the ARV was? Thanks!

Thanks @Alex Olson, will do.

Thanks @James Wise. Not what I wanted to hear but I’m afraid you are probably correct. Reaching out to an attorney ASAP if anyone has a recommendation in KCMO.

Hi BP,

My business partner and I are in need of some advice and we're hoping y'all can help. We are out-of-state BRRR investors in Kansas City and recently closed escrow on an off-market SFR there. We closed on 3/31 and made the mistake of not getting the seller out of the home prior to close. He is now dragging his feet. At first, his story was that the bank put a hold on the funds from the sale and he needed that money in order to pay the deposit and rent for his next home. Now, as our property manager was heading to the house to meet him and pick up the keys, he texted her that he has come into contact with a COVID-19 positive patient and he needs to quarantine for 14 days, which he intends to do at the house. He is very clearly taking advantage of the situation.

So obviously we've learned our lesson and will require sellers to vacate the premises prior to the close of escrow moving forward. However, we need to figure out how to get this guy out of the house. Since he isn't technically a tenant, do tenant laws apply to him or is he simply trespassing at this point? Can we call the police and have him removed or do we need to go through the eviction process? Any advice would be greatly appreciated. Thanks in advance.

Congrats and great work! How long did it take you to find the lease-option buyer? What was your marketing strategy? What was your backup plan if you couldn’t find a lease-option buyer? Thanks in advance for sharing. This is something my partner and I have been considering as well. 

@James Gates Thank you for your reply. This is exactly what we've been doing for our deals thus far. Can't seem to find anyone willing to bite on the 10-12% for this current deal. Was curious how you set up your equity partnership. Did you guys create an LLC for this property to include the financing party or did you just purchase as Tenants in Common? I'm assuming since you waited the full six months to refi you did not acquire the property as an LLC? Thanks again for any insight into the structure of your equity partnership for this purchase.

@James Gates Nice work! My partner and I have been doing the same thing in Kansas City. Question - how did you structure the partnership with your private lender? Did you form an LLC? We've raised some private capital in the form of interest only loans but we've been hesitant to give up equity thus far. But we currently have a verbal offer accepted that we're having trouble raising the funds for. Considering offering equity for the funding and just curious if you have any thoughts/feedback on your specific arrangement.

Hey Michael, send me your KC deals. [email protected].

@Account Closed So I just looked up the Dodd Frank code you were referring to and it actually disputes what you’re saying. So while it does say this:

“(b)Appraisal independence For purposes of subsection (a), acts or practices that violate appraisal independence shall include—

(1) any appraisal of a property offered as securityfor repayment of the consumer credit transactionthat is conducted in connection with such transaction in which a person with an interest in the underlying transaction compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a person,appraisal management company, firm, or other entity conducting or involved in an appraisal, or attempts, to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate such a person, for the purpose of causing the appraised value assigned, under the appraisal, to the property to be based on any factor other than the independent judgment of the appraiser;

(2)mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of the credit;

(3)seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and

(4)withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties.”

It immediately follows up with this:

“(c)Exceptions

The requirements of subsection (b) shall not be construed as prohibiting a mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transaction from asking an appraiser to undertake 1 or more of the following:(1)Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.(2)Provide further detail, substantiation, or explanation for the appraiser’s value conclusion.(3)Correct errors in the appraisal report.”

Based on this discovery, I respectfully disagree with your interpretation of Dodd Frank as it pertains to my previous comment regarding appraisal reconsiderations. Not sure what other laws you were referring to, but maybe those are more in line with your view.

@Account Closed Do you know if these laws differ state-by-state? None of the info I read online regarding appraisal reconsiderations lead me to believe there was anything abnormal or illegal about it. And nobody involved (lender, appraiser, realtor) seemed to bat an eye. Not challenging your authority on the subject, just generally curious. Is there a law or statute you can point us to? Thanks man.