All Forum Posts by: N/A N/A

Does NY have a state level REIA? They may know of other independent clubs that aren't affiliated with the National REIA umbrella organization. I've run across a couple of more private clubs in our region that are definately MEMBERS ONLY.

Hi Lonnie. Have you tried http://www.nationalreia.com/groups.html?

Some Lowes stores carry a finished hardwood that has some 50 year warranty and it's in the $1.90 a foot range. It's very thin, but it's T&G hardwood, not laminate or engineered.

For my personal residence, I am building a timber frame home in SE Indiana on a 15 acre mini-farm. We are actually putting in SOFT WOOD. I am actually using 2x6 T&G pine car decking (untreated) and not even laying any floor covering at all. It's sitting on 2x12 joists spaced 14" on center. 1st & 2nd floor both. I could park a bulldozer on it. I am simply finishing it out with linseed oil and hoping that it scuffs up and dents quickly. New beauty marks will be treated with more oil. Of course, being a timber-frame in the country, we're going for a rustic finish.

I learned the trick when I went to log home building school. I toured one of the largest log homes in the US near Seattle WA. Many scenes from the TV show Northern Exposure was filmed there. I realized that the aged look of the rustic floors actually came from the fact that they were milled from the same Douglas Fir that the house was built with. IMHO, it was stunningly beautiful (if you like the rustic look).

Depending on the use, Farm Credit Services will do rural land deals as high as 85-90% LTV in states that they operate. They hold and service their own paper.

This past spring I just did a 30 fixed on A-2 zoned acreage with them at 6.8%

1. What is the breakdown of #'s of bedrooms?

2. Offstreet parking?

3. Other amenities? Pool?

4. Garden apartments? Common shared entrances? Townhouses?

I don't know about CT, but once someone has their occupancy permit, it's pretty hard to do any "code" enforcement after the fact.

A good home inspector from the next town over should be able to tell you if the work is done to code.

We have self-directeds which we have invested in MMHP Management, LLC entity.

Do you think there's any disadvantages to using options over assignable purchase agreements for wholesaling?

I could certainly buy and hold that but it's not my first position.

The more I get into option deals, the more I like them.

My very first position on this deal is to sell the option to another investor within 30 days for say, $10-15K. Let them exercise the option. All upside for me.

My mid position is to find a buyer and sell at retail.

My last position is to buy and hold because it ties up liquidity. I am more inclined to do so on this kind of property because it's a C-1 retail zoning, vs. R-1 residential. Much easier to finance through the LLC and get no-recourse.

I am actually making the exact same kind of offer on a SFH today.

I found a property in a little village right off I-70 on a very heavily travelled state route near the Indiana border. There is a huge $200M effort to develop the exit interchange by a large Columbus Ohio-based RE development firm. It could take 5 years, but it's going to happen.

The house is a vacant turnkey 3/1, 1100 sf. with deattached garage. The auditor has it listed as 100% FMV of $55K. Taxes are about $370 a half. The listing agent is not actively marketing the house, just letting it sit in the MLS.

The owner is absentee, living in South Carolina. It's listed in the MLS for $43K, but the listing agent said that the owner owns it free and clear and would probably take a $25K offer. It's been on the market for over a year.

My offer is $1000 cash for a one-year option to purchase. Exercise price is offered at $29K. I have two 3 month extensions at $250 each. If I exercise purchase, they apply the option fee to the purchase price. Option must be assignable at my option to whomever I choose. I asked for a $500 cleaning credit because I intend to do some minor curb appeal work.

I also offered an assignable master-lease agreement as a separate contract to rent the house for $300 a month. I have sublet rights. The house will reasonably rent at a market rate for $500-$600 a month.

My intention is to initially market the purchase option for $5K to other investors in my local REI club. If I can't get a flip in 30 days, I will shop for a lease-option tenant. I have a year to make that work, and if it does, I get around $14K net for the effort.

Bottom line position is to exercise at the $29K minus my $1K fee and the $500 cleaning option for a total of $27,500. At 8.5% I drop my monthly to a $215 mortgage payment but I pick up the $61 a month tax bill and another $40 a month for insurance, so it's a wash as a self-liquidating asset with maybe $100/month positive cash flow.

Best case scenario is I get $5K for about 2 hours worth of real work.

So-So scenario is that I get $14K in a year after some work screening and placing a solid lease-option tenant/buyer. Work could be maybe 50 real hours in a year's time.

Worst case scenario, I walk away after a year and a half and completely lose my option fee and some time.

Got a 65 yo widow. Husband ran retail business in location and rented two 3 br apartments above. He dies, no interested heirs to take business. She's clueless about RE.

She enters into a 5 year with a commercial retail tenant who promptly files bankruptcy in 1st year. He skips from OH to FL, effectively abandoning the property and lease. She thinks that because it's still in bankruptcy that she's stuck.

She hates screening tenants so residential is empty. She doesn't want to mess with it because it "drags her down".

FMV is $190-200K very near major university and university med center.
Student housing market is definately a consideration for comps.

My offer:

She's willing to entertain a year option to purchase for $2K cash because she's worring about coming up with the tax payment. She's entertaining a $170K option purchase offer.

She's willing to enter into separate master lease with sublet rights for $600/month.

The property seriously needs cleaned up and could use a coat of paint on the exterior, but is otherwise in halfway decent shape and very structurally sound.

After cleanup and residential rents, FMV should be $220K. In the university area, 3br apartments would be in the $1K range.

She will give me a $1000 clean-up credit towards purchase price.

The strategy is to get the residential rented by advertising on bulletin boards at the med center (grad students/interns).

Then advertise the property for sale as follows:

FREE RETAIL SPACE FOR YOUR BUSINESS NEAR UNIVERSITY.

or

Distressed seller. Cash flowing building with tenants.

Sell option to buy for $20K to qualified buyer. Or exercise based on purchase price after finding retail tenant.

Ohio permits self-help for commercial. Risk of adverse possession claim very low because of relocated deadbeat to FL.

Any thoughts? What am I missing?

Reed offers fairly scathing words for about everyone in the business. The reality checker is that much of what he states is very true and rational. He's a very analytical mind. A very good reality BS checker if you get caught up in the hype. Not to say that fortunes aren't made in the vortex of the hype. Just be aware of the vortex as a salesperson, and don't ever, ever, ever believe your own BS.

I found it interesting that the former president of the local Cincinnati REIA, Vena Jones-Cox is on his radar, but he offers no specifics about her other than his ******** detector checklist. She's a big wholesaling promoter charging $99/seat a seat for her seminar which is a sales pitch for her $2495/seat Wholesaling Boot Camp. She generally gets 1000 to the small show.