All Forum Posts by: Brian Smith

OK,

How do you find a good Realtor?

1. Trial and error
2. Call
3. ???

I have ran through several Realtors and man is it hard to find one that isn't an idiot. Possibly it is my fault (patience, explaining what I need, etc.), but sheesh. They talk to me as if I am stupid and try to give me all kinds of dumb advice. I am no expert and am always willing to listen, but if I have to listen to one more 20 minute lecture on how a property will cash flow because it will cover the mortgage payments I am going to scream. :shoot:

OK,

1. Lightly sand them to roughen them up.
2. Wipe them down
3. Use a good primer (Zinsser 123)
4. Paint with good paint (Sherwin Williams or Ben Moore) I prefer Sherwin and use ProClassic Waterborn for a durable finish. (This is an enamel)
5. Don't buy crap paint - Behr, Dutch Boy (no offense R Gaba), etc.
6. Paint is the cheap part - your labor is what is expensive. You don't want to repaint in a year or two.

Hmm. It sounds like this would work best for someone who has developed a nice portfolio of real estate and now can start packing $s away for retirement. Of course, if you have a nice portfolio then you are already packed away for retirement. :-) I was looking for a way to use a self directed plan for down payment(s) to help get me started and be able to make some non IRA/401K income from my sweat equity. Heck, with the current market and Nobama coming into office maybe it would make more sense to take the 10% penalty and then parlay that into a fortune?

Not to brag, but I was lucky enough to go all cash before the big slide down a month or so ago. I still would be $s ahead with the 10% penalty. Just not the increase in my income tax.

Thank you David! The next question I would have is can you pay yourself for the remodeling and/or management of the property? Also, I noticed that you are an author. Have you written a book on this idea?

Wow, what a great discussion!

So, if I understand this correctly for Brandon's idea to possibly work he would need to consider a self directed 401K? Then he would have access to only 50% of the funds through a loan?

Matthew,

Are you sure about that? The little I have looked into this was defined as follows:

1. Set up Self Directed IRA
2. Set up an LLC for the IRA Custodian to send/invest money into.
3. Set up a second LLC that first LLC and yourself are a joint partner in.
4. Then you can pay yourself management fees and the rest goes into IRA (employee).
5. I would "assume" that as long as the payments to the IRA are "reasonable" (say 10%) then you could keep the rest.

Seems reasonable, since the S&P has historically only paid 10-12% for the last half century.

What difference is there in this model than investing in some company that you have no personal interest, such as IBM stock.

I really want to do this, so please guide me in the right direction.

Jon,

What an easy and straightforward answer. I think this should be kept at the top of the starting out page (sticky?) and labeled "The Basics."

Clearly there are a large number of real estate investors out there paying way to much for their investment real estate. Most don't take into account their own money - that includes the agents selling the properties. The goal is to keep hunting and find those gems that you can add value (equity) too. Then bring the 50% rule into affect. Let the losers buy the losers and you will be laughing all the way to the bank.

Thank you for the response. Yes the mortgage would still be in my/seller's name. Wouldn't this be the same situation if you were selling a property as subject to? In other words if I sold a house Subject To: who is responsible for the mortgage (ultimately)?

If the DOS gets called who comes up with the $s to pay off the loan?

Let's say I'm selling a house with an existing mortgage as a wrap.

1. The owner stops making the payments - Who is responsible for the mortgage - Me? If so how do I get them out of the house?

2. The Due on Sale clause is evoked. Who is responsible for the balance - Me? If so, how do I get the buyer to pay up and/or get out? How does the buyer rapidly refinance to pay off existing mortgage? Would I have to provide proof that buyer has sufficient equity?

I have read about the advantages of buying with a subject to clause. What are pitfalls of selling a property with a subject to? For example:

Buy a property for $30,000
Repairs of $20,000
Mortgage of $50,000 at 7% interest

ARV is now $75,000

Sell to new owner on a subject to: for $75,000 with say 9% interest.

If the new buyer defaults, just resell? How do keep the lender from activating the DOS clause?