All Forum Posts by: Ray Hayward

Thank you for your feedback!  So in this case I know the town is willing to work with me but will not foreclosure on the property. 

In this case what is the beat way to move forward? Make an offer letter to the municipality?  And if yes, does this clear the other 2 notes or would I also need to foreclose on each of these after?

Hello,

I am researching an abandoned building which I finding has multiple liens.  I understand typically liens go first in time, but need some clarification for this scenario.

The are 3 liens on the property, here is the scenario:

1. Bank #1 Mortgage from 1998

2. Bank #2 Mortgage from 2003

3.  In 2007, Mortgage #1 was discharged but then the property was listed in a Promissary Note the same day of discharge

4.  Since the property has been abandoned the is also a municipal tax lien

Considering the scenario described, what is likely the lien priority order?

Many thanks in advance 

Many thanks all for this feedback and wisdom. The value of this information is quiet significant and definitely will pivot the approach in this deal.

In the profit share scenario, where a budget is agreed upon, how would you define profit and/or equity share? Discount based on FMV for general contracting?

For example, if a general contractor charges $175 Sqft as an avg market value in the area, and the agreement/budget is based on $125 per SQft, than would it be fair to use the $50 variance as the equity definition? 

Otherwise, what is a good example to structure this?

In general, I agree that if I as the developer who has the project and financial plan in place, a GC could be considered a commodity.  

However, in this case, I have been working with a GC who has put some “sweat equity” meeting and working with me as this would be the first project this scale for me. I recognize that A LOT could go wrong and may regret attempting this scenario, but would like to try and create a win-win scenario if possible. Optimistically, this would be one of many projects together. 

That being said, I do not want to jump out of a plane without a parachute :), and why I’m grateful for this forum.  

Hi it’s a municipal property tax lien

Hello, I am interested in purchasing an abandoned property that was last owned by someone who has since passed away.In the meantime, the property has a mortgage lien and growing tax lien.

I understand I may be able to purchase the note from the bank, however, is there way I can eliminate the tax lien?The outstanding Tax Debt itself is significant which would make the property unfeasible for purchase and development.

Any thoughts and advice is sincerely appreciated.

I am curious to know, is it possible to refinance debt owned to a hard money lender with a bank mortgage as long as the equity LTV is 30%+?

I am looking at a property that will require some environmental clean up before a bank would fund construction costs.  I would be using private money for the clean up, then would like to refi with the bank for construction costs and cover some of the hard money costs. 

Hello,

I am seeking feedback and advice on how to fairly negotiate equity with a GC for a specific project.  My role is the Developer. 

My goal is to:

1) Make an equity offer to GC based on Fair Market Value of property
2) Determine Retail Cost of Construction vs. GC's offer to determine "Sweat Equity" value
2) Create Vesting/Cliff schedule based on Timeline and Milestone

The way I believe I/we could fairly establish "Sweat Equity" is by getting 3-5 3rd party GC quotes and establishing the retail cost of construction. Then, determine equity based on discounted rate of retail average cost from obtained estimates.

Then, equity shares would be based on executing timeline and budget milestones.

For example: if the offer was for 35% equity, perhaps the vesting schedule would be:

Milestone 1: Site demo and clean up, passes inspection, on schedule, within budget 5%
Milestone 2: Rough construction complete, passes inspection, on schedule, within budget 5%
Milestone 3: Finish construction complete, passes inspection, on schedule, within budget 5%
Milestone 4: Exterior landscaping, paving, and clean up is complete, on schedule, within budget 5%
Milestone 5: Etc.

Can any provide feedback and opinion of this structure?

What is typically a fair offer to a GC in terms of equity share? (10, 15, 30%?)

Also, could someone suggest realistic project milestones that should be used as triggers?

Hello, I am looking to rent a single family in MA.  Can I legally put provisions in a lease agreement making the tenant responsible to:

1. Take responsibility for snow removal

2. Pay for professional cleaning services upon departure (for Dog)

Many Thanks in advance!

To all:

I am working on a partnership agreement and looking to create a Selling Clause if a partner wants out or prefers to become a silent partner.  The anticipated deal will have a mortgage for 20 years and want to make sure that if someone decides to leave the partnership that the finances of the property remain healthy. 

Does anyone have recommendations on how to do this?

Thanks again Milton, very much appreciated!

Regarding, the Partnership, do you have a percentage in mind based on the variables mentioned?