All Forum Posts by: Brandon Johnson

@Allen Lopez glad you asked for clarification. 

I know a ton of honest and ethical realtors around here that are also investors or deal with plenty of investors.  Reach out if you ever need a recommendation.

@Allen Lopez you mentioned a realtor is involved.  What is their involvement?  Sounds like that is the label they used to refer to their commission on the sale if they brought you and the seller together. 

@Allen Lopez  just ask the realtor to explain what the title transfer fee is and who is charging it.  Is it a bank owned property?  Are you being required to use a particular title company?

@James Maness I think the prices are getting a little high, but if you are looking to purchase low income units, I don't think they are as affected by the overbuilding of newer units that target the higher income tenants.  There will eventually be some overlap as older units deteriorate and become low income units if the owners defer maintenance and don't maintain their rent price levels.

@Sammy Lyon that is correct, the bank loaned 80% of the purchase price and the seller essentially deferred receiving the other 20% of the sale (his equity in the property) because he became the bank for the other 20%.  So I paid the 2nd mortgage note "to him" is the answer to your question.

I made monthly mortgage payments directly to my seller who no longer owned the property, but held a 2nd position mortgage and promissory note just as the bank held a 1st position mortgage and note.  It's a lot riskier for the 2nd position because if I quit paying the bank and the bank foreclosed, the seller in 2nd position would not stand as good a chance of recouping that money.  

I also signed a personal guarantee to both the bank and the seller since I purchased in an LLC. The important thing is that the seller has to have a lot of trust in you and faith in your ability and likelihood of repaying the debt. From my perspective, my name and reputation were on the line and at the end of the day if something went wrong and the bank foreclosed, I would have still done everything in my ability to make my "Private lender" whole and repay that debt.

This was another investor, so he approached it with an investor mentality.  He was going to make 7% interest on his equity over the coming 5 years.

Another detail I left out is when I paid off this 2nd mortgage three years early, I made a proposition to the seller and successfully negotiated a discounted payoff.  It amounted to about $1500 discount he was a little reluctant to agree to, but he obviously was ready to receive that lump sum.  The lesson here is if you don't ask, then the answer is automatically NO.

You should re-post that article text here in the forum.  Excellent read @William Brown

@Elliot Vann see there you go!  It's all about attracting the right people and being ready when the opportunity comes a knockin'.  

I bet BP is full of people who would tell you that you aren't going to find private money as cheap as 3%, but here is a guy who found folks happy to make 3% on their money.  Anything is possible.

I bet if @Daniel Dietz approached his flipper friend and asked if he could keep his eyes out for another similar opportunity, they could do it again.

When so many people have "Unicorn" stories to share, is it really so unlikely for you to find what you want @Elliot Vann?  Nah, you can find your 100% seller financed deal, or better yet it can find you.  You can find it without a realtor, you can find it with a realtor, you can structure it where the future rents pay your realtor commissions and you can find an attorney who will write that into your contract.  My attorney has done things more creative than that.  He had a BUYER (investor) agree to pay both agent's cell phone bills for the following 12 months just to keep the deal from falling apart since there was no room in the deal for commissions anymore.  

I get a kick when folks say, "I did it, but it's so rare you probably won't find the same opportunity."  ANYTHING is possible!

@Elliot Vann I just updated a post similar to your question.  ANYTHING you can dream up is possible and I never listen to negativity like that coming from Dennis M.  Be clear in your intentions, put on paper exactly what you want and follow your inner guidance when people and circumstances are put before you because if you are clear in your intentions you will find anything and everything you are looking for.  

https://www.biggerpockets.com/forums/50-creative-real-estate-financing/topics/188852-how-to-structure-my-creative-finance-to-purchase-a-duplex?page=1#p3573532

Let us know how your deal works out!

@Aaron Thomas I would certainly think that is a good possibility.  You just need to get on the phone and call all the small local banks in your area.  One will bite on the opportunity to fund it.