All Forum Posts by: Bill Hamilton

I think some pretty experienced people have tried to advise you on preforeclosure deals in Colorado on another thread but here are some things you need to look at and understand completely before you attempt to negotiate a deal (especially as a wholesaler) with someone who has had an NOD served on them. I think you will see by the wording on the law that Colorado is going to defend the homeowner over your interest if you cross any lines in the least. And that there are criminal penalties involved. Not just civil/monetary. Also understand that if you indicate that you can "buy" a house from someone and then you fail to make that happen, the homeowner and the bank that holds the note (if they delay the auction based on you telling them you need more time) can come after you. I am not saying don't do it......just make dang sure you know where those lines are.

http://frascona.com/wp-content/uploads/2015/09/SB06-071.pdf

https://www.biggerpockets.com/blogs/2849/21595-colorado-foreclosure-act-short-sale-double-closings

http://www.legalwiz.com/colorado-foreclosure-protection-act/

The last time I checked, Hawaii did not have branches of any national banks there. That doesn't matter if you are comfortable just doing business by internet and phone rather than walking into a branch. Otherwise I would go with Chase or US Bank etc. Or see if any American banks have branches in NZ.

You might try and check with a few credit unions or with some local banks. What you are looking for is a portfolio lender i.e. a lender who doesn't sell their loans to Fannie/Freddie. I think US Bank allows for a 5% seller carry which would get you to 80%. Also, try TCF bank. They used to portfolio a lot of their loans.

Sorry. I don't see how you can leap to the conclusion that "it is very apparent that there is something illegal going on".  The man is a veteran. Meaning he is probably comfortable with firearms and is expressing his 2nd amendment rights. Marijuana is legal in Colorado. Would you have the same issue if he had beer bottle caps laying around or a keg in the garage? Cameras and covered windows. Entirely possible the he is a little paranoid or has PTSD. Unless he is doing something you can prove is illegal then his lease stands as is. Why do you feel "the tenant absolutely must go for this to be a successful deal"? I am not saying you are wrong but you haven't given a reason why this is so. If his presence is keeping you from doing something that is needed to transform the property into what you want, then go with what @Bill S. is saying. Wait out the lease and simply choose not to renew. P.S. you are going to run into a huge number of veterans in Colorado Springs and I honestly feel the issues you see from this tenant, are things you will run into from time to time in that city. Also, keep in mind that Colorado Springs is a rather smaller community and fiercely military, and very supportive of veterans. If the press gets hold of a story that spins you as anti veterans, you will have a hard time doing business there.

If any of this makes you uncomfortable, you may want to consider sticking to investing in the Boulder/Louisville area where you are far less likely to run into this type of tenant.

Best of luck with whatever you choose to do. I think it's important to comfortable with both the area you invest in and the clientele you are likely to deal with.

i am pretty sure they are legit. I'm not endorsing them but they have been around for many years as a commercial lender.

While in some ways I would agree with @Brie Schmidt, there is a difference between a portfolio lender and a private lender. In general, a private lender is a private individual and they can make whatever rules they want about lending their money. A portfolio lender is generally a bank or credit union. They can make portfolio loans, where they will keep the loans in house, rather than sell them to Fannie/Freddie. And even if not Fannie or Freddie, many other banks etc will base their desire to purchase loans on the Freddie/Fannie guidelines. But.....all federally insured banks are subject to regulation by the FDIC, so they cannot just do what they want. They have to make certain that their loans are of a certain quality, that they only have a certain percentage that are too risky and that they all meet a whole host of other, federal requirements and criteria. Primarily this is just a clarification of terminology but when conducting this type of transaction, the legal definition/terminology involved can be crucial.

Consider offering to put in new flooring (either laminate or carpet) if they are willing to ante up a much larger damage/cleaning deposit and possibly a little more per month in rent. If they can keep their dogs from damaging the flooring then you still get the advantage of new flooring and they have an incentive to keep it nice.

That's kind of the whole point of finding a good deal. A good deal as a buy and hold, means one where the rent payment covers the loan against it plus taxes, insurance, maintenance, CAPEX and (from my perspective) an "Oh damn" surprise fund. And this property should still provide what you think is a reasonable cash flow after all those factors are taken into account. Otherwise, keep looking.

Ok. At this point I would absolutely recommend you talk to both an attorney who sets up corporations and to one who does Bankruptcy protection and defends against collections. A consumer protection lawyer can probably tell you more accurately than most, exactly how best to shield your wife from an adverse action. As a pure guess, if you form a single member LLC, your wife could still be liable as she would "own" 50% of your equity in the LLC.

Rules on talking to people that are in the foreclosure process vary widely by state. As far as I know there are no federal laws involved other than standard RESPA stuff. In Colorado you can talk to them but there are VERY specific rules on what you can say or do. One set of rules means you are acting as a foreclosure consultant and you can only do and say these certain things. Another set of rules applies to equity buyers. This requires very specific contracts and requires answering the sellers questions honestly along with other various specifics.