All Forum Posts by: Scott Hubbard

1. Read your lease as this should address what happens when rents are late. If you do not have any verbiage that addresses late fees, then you may be able to give notice to the tenant that your amending the terms of the lease. Again their should be verbiage about changing terms on the lease. Again, if you have no verbiage which allows you to change the terms on the lease, then you have an weak lease agreement which you should find another example preferably from an attorney.

2. If they are always late a day or two, then chances are your lease allows it. If this is the case, then it is your fault not theirs.

Your only recourse is when the tenants need your reference for another property. If they skip or break the lease which results in damages, you can file a claim in court and the resulting outcome could result in a judgment against them. This then could be reported to their credit bureau. Aside from that, you will not want to get involved in any kind of negative reporting as it could end up hurting you instead. Sometimes it is best to move on.

In my opinion, being late a couple of days is not enough to warrant any actions against them. If their lateness persists or even gets worse, then you may want to seek counsel for your options.

Thanks a bunch!

My opinion is that you will likely have a difficult time convincing a private money investor to put a dime based purely on speculation. At the very least, your going to need to some financial projections based on both current and proforma data. And, I do not think putting your name on something speculative is a good feather in your cap.

However, I would support this project should this area need small multi-unit s. The return on investment for MU's are higher than for single and this might give you the edge necessary to get financial interest.

This is what I would do if I were in your shoes.
1. Look to vacancy rates in this area to see how much available housing now exists.
2. If rates are low, then see if there is any data on how many full-time jobs are expected to be created by the build out of the school.
3. Look to see if there are any multiple-units projects in the pipeline and if there are any empty MU lots available.
4. Look to the current zoning and see if you can build small multi-units. You may need a variance which is why you need to look to see if there are any proposed MU projects or MU lots available. If not, then you will have a better shot at convincing the zoning commission and property owners that this area will need low-cost housing to support its growth.
5. Once you have done your due diligence, look for a developer to see if they will get behind your project. With a developer, you stand a much better chance of getting the backing.

Of course, before you commit all this time and energy, you should have these properties under contract. I would also use an option contract as you may find an opportunity to wholesale this to a developer right off the bat. unless you have development experience and/or financial backing, your probably going to need to assign this or take a minority stake.

When your looking for private capital, most will not wait years to see a return. If you can put this under contract with a lengthy option, you might be able to shorten the realization period by a year or more.

Good Luck!

The fee, since it is a short sale, is probably related to a service for processing the short sale on behalf of the listing agent.

If this fee is part of the purchase contract where you agreed to pay for title and closing costs, then you should contact the title company because they are required under RESPA to clearly describe any and all fees charged as part of closing.

If you did not already agree to pay for the fee in advance, then call them on it. This is a clearly "junk" charge and they are just trying to pass it on through to the buyer since the seller cannot pay per their lender.

You should be able to receive the lis pendens list for free. Check with your local First American Title Insurance office to see if they have a e-mail list you can join. If not, perhaps another title company will have one.

Also, as a wholesaler, you will want to avoid sending letters to short sale candidates because most will not be able to be assigned. As a result, your going to need to screen against those and pick ones that have equity.

You should check the publication date on the book your reading as there are very few residential loans that are assumable without some qualifying on the part of the buyer. Back in the day, say 15 or 20 years ago, there were assumable loans available but that pool is now so small it is not worth attention.

Good Luck!

Sounds like a great dilemma to have:) Good Luck.

To answer your questions, yes your LLC would be the partner which should help protect you personally from liability. You should also have an umbrella insurance policy on your LLC.

The JV does not offer anyone asset-protection, however, since you can record a memorandum or notice, you can notify any would be claimants that you have a vested interest in the assets.

I do not know the details of your situation and there are pros and cons to partnering. You should take certain precautions to help mitigate possible claims. Having an attorney look over any document is also critical.

Here is what i would do.

1. Spend the money to have an Multi-unit ALF development proposal made. You do not need to have the expensive stuff like a feasibility study or environmental impact report. Just spend enough to make it look as though your in the beginning stages of a large scale development project. I can get a good site plan drawn up for about $1k.

2. Put together a quick business plan or development plan. You can Google for some examples.

3. Call for a meeting with the owners of the ALF next door. Present your plans and ask them if they would be interested in partnering with you.

4. Gauge their response.

5. If they seem interested and want to discuss the proposition in further detail, then you might be able to maximize your land value by joint venturing with them. You put up the land, they get funding based on their existing ALF business for example.

5. If they seem nervous, but also do not seem interested, then pitch a joint venture idea or tell them you will move forward with another partner.

6. You may also consider different uses say industrial or manufactured home park for example. This may affect their business too because no one wants to live next to a mobile home park.

Good Luck!

Generally, if your getting leads from a REALTOR, then they will want it listed in the MLS so they can get paid.

As far as putting in the listing status, it is subject to the rules of your local MLS association and is NOT up to that agent. I believe the status will change to active contingent if memory serves me.

Flopping short sale properties using the MLS is very difficult. You need to start with leads that are not already listed in the MLS or get the listing agent and seller to cancel the listing on the A to B, then pay the listing agent to relist and market the B to C. Again, no small feat.

@Chris

SDIRA's are allowed as long as it is a arms length transaction. In fact, the JV agreement can be submitted to the trust administrator.

@ Sherry

A joint-venture agreement is a form of a closely held partnership specific to one type of investment. In real estate, it would be used for the acquisition, management and disposition of a single piece of real estate. It defines the roles of the principals as well as the split. It is much like an operating agreement for an LLC. Think of it as a limited partnership agreement simplified. The positives are that it does not need to be made public and avoids the high costs of an LLC set-up like in California.

If there are more than two entities or individuals in the collaboration, then a JV agreement may not be well suited for this.

I have a very simple JV agreement example in the Fileplace of this site.

http://www.biggerpockets.com/files/user/bokman/file/jv-agreement-where-owner-is-partner-docx

1. What you need is a JV agreement where (you)get title in your or personal or your entity's name. In this agreement the roles are clearly defined as you stated above, but you should not allow her to close in her name with your funds. Since you are also funding part of the rehab, what guarantee do you have that she will put her portion in. What happens if she off the roof and ends up, in the hospital?

A JV agreement will address all of what if scenario's. They do not cost any filing fees to set-up and are legally binding in a court of law.

2. Using a DOT with a DIL is problematic. What happens when the REI fails to perform? What if she runs out of money and does not complete the project? You will be left holding deed to a property that you will likely have to finish. Instead, do a JV agreement and have her put $$ in first Then, you can fund her the portion you agreed to. If cost overruns occur, then put that into the agreement that she has to come up with the additional capital or you will loan her the deficiency amount with interest.

Deed of trust are a terrible tool to use for rehabs unless you have prior experience with the REI.

I do JV's all the time and they are very good to use in the situation you just described.