All Forum Posts by: Will Barnard

Originally posted by "krlovill":

I would like to have a contract with me so I wouldn't prolong the deal. I would just want to protect my interest until I fill comfortable with writing them on the scene. Thanks very much for taking the time to respond.

Have an attorney draw up a purchase contract for you with all the regular contingencies you want/should have to protect YOUR interests. Once completed, you now have your own contract for future use which can easily be edited accordingly. Just a suggestion.

Nice post flee. For the most part, I agree with you.
However,

In your efforts from the statement above, it Can be the case where a deal is done that maybe shouldn't have or maybe an important contingency is missed on the buyer's behalf, etc. etc.

I like how you have an ethical approach to your duties. That said, not all agents are the same. Of course you can fire them and get another. Unfortunately, the investor may not know that until after the deal is done and therefore too late.

Triton Wrote:

Just because someone has a license to sell real estate does not make them all knowing, more knowledgable, or better negotiators. I am of the opinion that I can negotiate better than most agents and arrive at the best deal possible on my own. This is not to say that I do not utilize agents, I do, simple to point out that I am the best candidate to assure the best deal for myself. Keep in mind, this is a view of a full time RE investor with lots of experience and dealing in the industry.
Just my $.02

We do have SFR's on our website, both in Texas and the Carolinas. For some investors, that is what they want. I do not push those as I feel the multis are better investments for cash flow and other reasons. Again, my company is simple offering a "variety" (for lack of a better word) to investors. Some investors of ours have expressed the need to add those units to their portfolios so we offer them.

I am not personally buying sfr's for my portfolio and have not since mid 07. For one, because I have enough of them for my taste and for two, because the multis give me better cash flow, better rental income diversification (vacancy in an sfr is 100% when the tenant is gone).

I am not aware of what they factor for underwriting, but what they do has no bearing on an individual properties cash flow and actual vacancy.

If I wanted to buy a 50 unit apartment that was 98% occupied and had a previous 10 year history of 94% occupancy, should I assume that the seller would accept my offer based on a 25% vacancy factor as that would dramatically reduce the NOI and thus the value?

Perhaps I am missing something here?

I disagree with this post 100%. I think anyone would be Foolish to not get an inspection.
I work with many builders in many states, including TX and none of them are big outfits like KB, etc. I only use reputable and competant builders who are licensed and insured. No matter how good they are and how much attention to detail they pay, there are always some issues, although minor in nature most of the time. For example, an interior door that would not close properly (alignment was off), dent in a door know, etc. etc. etc.

Never buy any property with improvements without an inspection. Any seller claiming

Run as fast as you can. They must be hiding something. If I was a builder and was confident in my product, I would tell my buyer to bring whoever and as many inspectors as they felt necessary. It is no skin off my back!

Keep in mind that with the current lending crunch, lenders will not loan to your end buyer on the final price, but only the original price. Assignment of contracts is legal by all standards, however, the lenders hold all the cards. They are looking at these transactions now as taboo.

Unfortunately, soo many greedy investors as well as unethical ones, have ruined many of the creative startegies we have used and new laws, rules, regulations, and lending practices are changing. It is becoming increasingly more difficult to make $ investing in RE utilizing creative strategies.

Setting up an entity is recommended, particularly if you have multiple properties and are operating a business, not just one passive income investment. The other reason is for liability protection. Speak with a re attorney on this issue. It is worth the expense to get professional help.

As for the lending issue, the market is getting tighter and tighter each week. There are still some 90% loans out there for res. property and you must look at creative options for alternatives. Partners, lines of credit, IRA funds, private $, etc. Getting loans under your entity name would be considered a commercial loan. These loans are available, and most often will require you to persoanlly guarantee them. The rates may be slightly higher as well. MikeOh does these loans often, so perhaps he can be of more assistance to you on that subject.

Depending on the State the property is in, the closing can be done by a title/escrow company or an attorney. I do recommend you have an attorney on your team to look over the contract if you are not experienced.
A purchase contract can be available from any re agent, title company, as well as attorneys. Some states have their own standard contracts and others allow any written purchase contract. Remember that all items are negotiable in any purchase contract, regardless if they are "standard" or not.

Mike,
I agree with your statements on specualtion, however, this thread was not based on the landlording business alone. It was about speculation itself, unless I am mistaken. Many, many investors have made more than sufficient profits from buying and holding for the future appreciation (speculation). Many have taken on poor cash flow or even negative cash flow and still came out ahead at the end of the investment.

That said, there are many ways to make a profit in RE, not just the landlording business. That is your business, not everyone's. You know and agree with this, just pointing it out for everyone else.

I also love the point mentioned that we are all specualting that we get up the next morning! Great point! :lol:

Originally posted by "krlovill":

I appreciate the info have you every used realestateabc.com. Nationwide what does the title company do exactly. How can they help me and what do they charge.

The title company has access to ownership details, outstanding mortgage debt, property profile, etc. They have the most up to date and accurate info. As for getting them on your team, there are two ways that come to mind.
1. Request the service and pay a fee for said service.
2. Let them know you are a professional RE investor and do deals in their area. On occasion, you need to pull specific info/reports on properties and would like them to do so for you. In return, they will receive the business on all your closings. For this option to work, you need to have credibility as anyone can tell a great story. You should either, give them business upfront to create the relationship, or have an agent or other professional who already has a relationship with them, give your credibility to the title co. via the agent's referral. Of course you should follow through or that agent will never recommend you again!