All Forum Posts by: Bryan Scott

PalacePros, Bryan Scott, a Denver area Independent Realtor:  We exist to serve the needs of property sellers, buyers and landlord/property managers in the Denver Colorado metropolitan area. Offering service that will exceed your expectations w/ experience & negotiating skills that inspire confidence.  SELLING?  3.2% total commission -buyer-agent side included.  Full service - agency/fiduciary.  BUYING?  Rebates of at least 1% - more if buying a new home!  Full service - agency/fiduciary.  Investor friendly with tons of rehab & landlord experience.  Visit www.PalacePros.com, or call (303) 807-4802, to learn more.

Hi Eli, Your 2nd line is correct. I know of no one who can or will give you seed money unless they are related. REI is all about the numbers. If you find a deal, the money will come, but if you do not have money to contribute, you will likely do all or most of the work on a project and, if you haven't done a rehab before, you will likely need help from an investor who has their own core team to also contribute. For this, they will expect a larger cut of the profits when the project sells. So, consider the above and when you do find a deal, offer it up in that fashion and you many get some takers. Good luck and happy hunting!

Chris,

Ah, got it. The absolute best source of Private Money - no question about it!

So, a competent Real Estate Attorney who understands SEC and lending would be a good step in the right direction, because it does sound like it isn't intended to be a "Property by Property" situation, which could easily be facilitated with the typical Note/Deed of Trust type transaction. A good start for a name would be any of the local attorneys who regularly speak at Realtor Assn board functions (Oliver Frascona or similar). If they are active in Real Estate, they are likely an affiliate member already, so just call yours and ask.

There are a number of Hard Money lenders in Denver Metro who can provide meaningful feedback on how to structure this (just Google "Hard Money Lender Denver"). Pine Financial appears at the top of the page (I have no interest in or affiliation with) and has a tab titled "Investors", which provides some info. You might just call them or their competitors and inquire on the process.

Happy Hunting!

Hey Vince,

If I were you, I'd check with someone on your local Landlord/Tenant Laws, because I am not confident that your purchase of the property circumvents the Tenant's rights provided for in their valid lease. It is definitely a state by state matter, but please know that in many states, the Tenant could win that one if they press the issue. The other way to handle it is to have the seller deal with it before you close, or as a condition of close, assuming your local statutes allow such an amendment to survive close of escrow.

Also, make sure the tenant deposits are made part of your escrow close.

Just thoughts. Good luck!

Hello Chris,

Is this loan for yourself, or are you making a loan to another? Sorry, but the comment about "borrowing criteria" didn't make it clear to me which side of the closing table you are on.

Please also define your version of "Private Money." Are you referring to money you borrow from family or friends, unaffiliated 3rd parties with whom you have no prior relationship, or organized Hard Money lenders who make such loans?

Hello Deborah, Sorry I got in on this topic late. Wish I could say I haven't gone through something similar in my own life. YUK! But, you do what you have to, and, apparently, so does your Mom, all relationship issues and personal problems aside for the moment.

My thoughts head in a slightly different direction based on how you te'ed up the issue, then commented later on in the string:

1. Clean up, stage, then sell the house. Keep in mind that she may not have near the equity she thinks, because the most likely buyer will not be your choice, best buyer. In other words, it'll be someone like me who has to generate a profit from sale, or buy low to help fund rehab in order to rent and generate cash-flow.

2. Maintain min payments on the CC debt till further notice (see below).

3. After house is sold, using current income from job/SS, rent cheap room or studio apt if possible (just recall that one qualifying criterion among many are that new tenant must have income 3X the rent - this is my first qualifier). To assist, perhaps she has a friend who will move in with her to offset expenses?

4. After executing on the above, if your Mom is still insolvent (legal definition speak), file BK and wipe out unaffordable CC debt. PLEASE KNOW THAT I AM NOT A PROPONENT OF STIFFING MY CREDITORS, BUT AT SOME POINT, ON SOME LEVEL, BEING ABLE TO LIVE AND FEED MYSELF, THEREBY TAKING CARE OF BASIC NEEDS, BECOMES MORE IMPORTANT THAN NOT PAYING THE CC BILLS.

5. Assuming no other options existed, once BK is discharged, begin drawing from 401-K, or from regular IRA created by a roll-over from 401-K, as needed to supplement SS income (assuming she has already quit her job).

As alluded above, my bullet item 4 above may annoy some of my fellow investors and agents, but in the absence of more income, or willingness and ability from the kids involved, or other viable options, it is what it is.

Best of luck to you and your Mom.

Hi Kevin,

Unless the property is fairly new, you should be able to purchase, or take over a time-share from a private individual just about anywhere you want one for ZERO or less (read that as the seller may be so sick and tired of continually paying maintenance fees on something they never use, that they might pay for your first or even 2nd year maintenance just to get you to assume the responsibilities they have for the duration of their agreement with the property owner/management company). This is especially true of folks who have owned one through the economic down-turn we had from about 2007 - 2012.

Time-shares are very often NOT an investment, but if you like to travel and travel at least 1-2X or more each year, you can save big $$ over simply renting someone's vacation property, or staying in a nicer hotel. Plus, most of these are pretty nice properties. Some, even luxury, which would cost you $400+ per night.

So, for an average, annual maintenance fee of $500+, it makes some degree of sense, but if you go into this with the thought of it being a viable investment, don't! Just do yourself a favor and DO NOT pay anything more than perhaps catch-up maintenance fees on someone's time-share. There is absolutely no need to pay the typical $thousands of dollars to buy one.

If you end up buying one, or better yet, taking one over, you will want to join a reputable club that facilities trades from one location to another, so you don't end up staying at the same place each time. The most trade-able time-share units are those occurring in the best weeks, which for the US would be from about November through April-ish.

Google "Timeshares For Sale" or go to Ebay, or Craigslist, or any one of a gazillion other locations to find these.

Enjoy your vacation!

Nice thing about HUDs is that you can get inside them and see them in order to estimate rehab. "Boots on the ground" cannot be substituted, however, when I am scanning HUDs, or REO's, etc., my "rule of thumb" for rehab is $30psf depending on price value of the property in ARV terms. For more cost-effective properties (sub-$50K especially), I use a bit lower cost estimate per square foot, because buyer expectations are correspondingly lower. Read that as lino vs. tile or hardwood and laminate vs. granite, etc.

One has to be very mindful of your local market though. You may be able to find cheap, cheap properties in a given market, but what do similar, rehabbed properties in that same neighborhood, or zip code, actually sell for? You may find a $25K property that is only worth $50K after you've done a $25K remodel, whereas in another neighborhood, the same type of house might be worth $75K or $100K when complete and ready for sale.

Best to analyze these and other basic metrics and stats for the area of interest, before taking the plunge.

If you need more assistance, definitely check out your local REI group and ask lots of questions, or, seek out a more experienced investor who is working the same area you are interested in, before you jump in. It would also be a good idea to discuss your thinking with a local RE agent who works in and really knows the area.

Best of luck.

In a word, YES, ABSOLUTELY, POSITIVELY!

As Elizabeth pointed out, it's all about trying to collect. Being vigilant now, when the relationship is positive, will pay dividends should it ever go sour.

In addition, at the application stage, I always ask for pertinent info for immediate family (Mom, Dad, Brother, Sister, etc.). Don't forget work supervisor and manager, including contact phone numbers.

Probably the best conversation one could have concerning what to ask for, might be had with a skip-tracer, or someone you know who may be proficient in a credit/collections capacity.

Rentals are great (most of the time), but they sure suck the life out of you when things go south.

Best of luck!

Or, prep the hole into a small square one with a box knife (no need to go stud to stud), then do a California patch.

I learned this years ago out of necessity as a landlord. Basically, just take a ruler and make a square around the offending hole making sure it stays inside the borders of the newly drawn square, then, cut a new scrap piece of drywall approximately 1" larger on all sides, then, with the paper side down, slice off the same 1" of the gypsum material ONLY thereby leaving the backing paper. The effect of this should make the actual gypsum product nearly exactly the same size as your newly prepped, square hole. Place the California patch in the hole, with the approx 1" of the backing paper overlapping the hole, then use drywall mud to "seal" in the patch.

Either approach will take 2-3 steps to do properly (read that as feathering the patch to eliminate noticeably high spots), then you still have to texture match, then paint.

I do like that new product, but to think that patch could be done that easily is a bit mis-leading to me.

Enjoy!