All Forum Posts by: Account Closed

Hi @Account Closed,

It's your lender's job to explain, not mine,  but I'll help. :)

The lender is using all or part of the funds in that 401k to document your ability to cover the mortgage for six months or so even if all your tenants bail on you and stop paying rent at the exact same time. In order to do that, your lender has to show that you can pull funds from the 401k to prevent foreclosure. 

Literally every 401k I have seen has this ability, but obviously someone somewhere at some point used a city/county/state employee retirement account or pension fund that you can't pull funds from to prevent foreclosure, and then that person sued some bank for 'predatory lending' when they couldn't pay their mortgage, so now on our end we all have to cover our you-know-whats and get the documented proof that your particular exact retirement account allows you to pull funds to prevent foreclosure.

This is 100% normal and it's called terms of withdrawal. Fannie and Freddie Mac require this to make sure that your money is accessible. Some retirement accounts aren't accessible until you quit your job or hit a certain age and they typically won't accept those kind of reserves.  

You're fine and that's good that you're asking these questions. It means you’re doing your due diligence.  Keep it up!!!

Take care and good luck on your home purchase Ashia.

@Account Closed A lot of good lessons here. But going forward, when you market yourself as someone who buys houses - be sure to have the funding behind you to close if your end buyer can not come through (or decides to screw you!). It will give you a real sense of confidence knowing that you have money behind you to close and then legitimately wholesale the property after taking title, that is if you bought it at 50-70% of value. You will be able to assign contracts with full confidence. You will probably take them down yourself (with your investor supporting you) and make even more money by controlling that inventory. 

Also, you got screwed because two people knew they were smarter than you. You didn't even show up. Im not saying I would do the same, but if I were the buyer or seller in this situation, I would have lost respect for you for not even showing up.  Just being honest here! 

What an awesome learning experience though. You only missed out on 4k. Oh well. You didn't lose any money! This will create a foundation for how you operate your business going forward. Best of luck Ashia! You got it!!!!

Transactional Funding could have avoided this situation.  The fees can be a bit of a bullet to bite when the wholesale fee is small, as in this scenario; but the seller would have seen you going into title and need not be aware that you are reselling the property.  You have a great attitude about learning from this situation and continuing to educate yourself.  Push forward and best of luck.

Couple of things here...

1. You should look up tortious interference and have a chat with the seller. They appear to have interfered with your contract with the assignee. Talk to a lawyer - you'll spend more $ fighting this than figuring out how to not let this happen again

2. Always show up to closings! 0.1% chance you get cut out if you're there.

3. Get the title co to do a HUD for the seller only showing their side and a HUD for the buyer showing only their side.

4. Find transactional funding and do double closings if you can't figure out #3.

5. Don't call this buyer ever again.

6. Did I say show up to closing?

Hey @Account Closed

I 100% concur with  @Darrin Carey... and here are my two cents on how to prevent this in the future:

1) Connect with someone experienced in Louisiana to review what you got going BEFORE you start your next deal. Take them out to lunch, buy them a drink, or whatever... but being brand new, someone should have "reviewed" your work for you before you did your first deal

2) (Especially when dealing with buyers you've never worked with before) collect some money up front so they have skin in the game. This scares away bad guys.

3) As Darrin mentioned, you can have your assignment fee escrowed at the title company. 

4) Maybe do a little background check on your buyers? That can happen in the real estate community and at the St. John the Baptist Parrish Clerk of the Court - checking court records to see if he/she is a names defendant in any law suits...

5)  Even though this buyer is bad, bad, bad... remember to Love your enemies, pray for those who despitefully use you. Your buyer will eventually get what's coming to them...

Good luck! 

Blessings,

Zap Martin

A contract is a contract and thusly so, is binding. 

I've seen the same ppl rail on wholesalers for years on this site, then admit to doing the same thing, go figure. 

Wholesalers serve a purpose, if it was illegal, then it would be, simple as that and seeing how this particular wholesaler stated that it is 100% legal in her state, coroberated by others who share this knowledge, the moral shaming based in hypocrisy is unwarranted; we all have jobs to do, I am not a wholesaler, nor do I desire to be I, but I respect the efforts ppl put into their business, any business. I wouldn't dare attempt to shame someone who is building their business because I didn't like it or had some "psudo-moral aversion" to wht they did, Please.

As already stated, talk to a lawer, possibly join a "prepaid" legal service or legal network;  if it were me, I would become very astute in the area of contracts; moreover, taking a class is a very good idea, seeing how you may be in this business for many years, not a Guru class but a college level, legal contracts course. As you can see it can benefit you in the long run.

Good luck, learn a lesson.

Peace,

Dee