All Forum Posts by: Ashraf Spahi

Have you visited the cities that you intend to invest in and researched every part of it?
Did you build a reliable team in that state?
Did you figure out where you will be getting all your materials from so you can communicate directly if any contractor needs supplies?
Have you set up processes for how you will manage the contractors/property managers and what they should do if they have any questions?

I did all of the above before investing out of state 

Not that hard but expect higher than usual interest rates because you don't have a proven track record. Make sure you run the numbers to see if it all makes sense

That depends. What are you trying to accomplish by having an LLC?

If you're looking for limited liability and tax benefits then yes.
If you will be needing to get financing from a traditional lender then it may make it more difficult until you have a track record. 

Its easy to create an LLC just do a google search for your state. They might have a state business registry or you can use an online company to help you set it up

@Wayne Brooks is right regarding the short sale and illegality of collecting rent and not paying mortgage, it happens all the time. 

Sometimes crazy people can't be convinced and they think they can get away with it. You could let them know that to purchase from foreclosure they would have to
1. Have the money to pay it all upfront which they clearly don't if they haven't been paying their mortgage. 
2. They could get a hard money loan but they would still need to put up a large sum for the deposit, pay high-interest fees and then get a balloon payment after the agreed upon years which is typically 1-2 years, maybe 5. 
3. The purchase has to be at arms-length meaning the buyer cannot be related or affiliated with the foreclosed person. Not sure what happens exactly if they find out but my guess is a lot of lawsuits which I doubt they can afford a lawyer to represent them

Plan B for you would be to keep your eye on the foreclosure process, find out when the sale date is set and be the first person there to bid. 

Best of luck!

How long will you be living in the single-family home? If you are able to cover your mortgage and expenses and plan on living there for 5+ years then even if the market does crash it will eventually come back up. As long as you don't sell during the crash you should be fine 

No one knows what can happen though, people have been crying market crash for the last 3 years. 

That's terrible ethics on the parents. 

You should find a short sale/foreclosure agent whos done multiple deals with banks to help you out with this. You could purchase it through a short sale before it goes to auction but I believe you need to get the current owners to agree to the sale before you start negotiations with the bank. The bank won't talk to you unless if the owners give permission. 

Ideally, it's in the banks best interest to sell it before going into foreclosure as it costs them time and money so they won't be too much of a pain but they are only willing to write off so much of the loan on their books so make sure your offer price isn't ridiculously low

Its definitely a hustle but don't give up and don't get desperate and jump into a bad deal.

Figure out the level of risk you are willing to assume. If you are willing to take a lot of risk then maybe go after foreclosures but make sure you do ALL the research on the property prior to bidding. Title report, finding photos of interior, recently pulled permits, etc. 

If you want less risk then keep on trucking through door knocking and vacant homeowners. It takes time its never overnight. In the meantime you can be building your team of agents, contractors, materials suppliers so that when you do find a deal you can move quick

That depends.

Do you have the money, time, and experience to do the rehab?

Can you invest the rehab money into the home and rent it out at a higher amount cash flowing more per month?

Whats your plan after you sell it? Using that money to buy more properties to cash flow?

@David L. Pitman Jr. has a good idea. Try doing that. Also ask the insurance person if there are any fees for cancellation. 

Regarding your deposit. Before a seller can cancel an agreement they typically have to give you a notice to perform and there is a waiting period before it goes into effect and THEN they can take your deposit.

Or if they are adament you can offer them $X per day  (Something like $20-50) for each day you go over the agreed close of escrow date. That usually makes them happy 

Do some guerilla marketing tactics. Don't just throw a property on the MLS and wait

Try going door to door in the neighborhood letting people know about the house for sale. They may have friends or family that want to move close by.

Try upping the commission % for the buyer agent by 0.5% or 1% to motivate buying agents to show it more

Go to all the real estate brokerages in the area and pitch your home to all the agents in each office