All Forum Posts by: Larry Lee

Hi Ann, again as I've said several times now this was simply an idea. It popped into my head and so I decided to come on here and see what others thought about it. Doesn't mean I was going to attempt it, doesn't mean i've already attempted it. Just means I had an idea. I have no intention of committing any sort of fraud. ideas aren't equal to actions and bad ideas often come before good ones. I dont know how much simpler I can make it. Some of you guys/gals act as tho i've committed a crime just for asking a question. But thanks for your opinion and ill just hope that everyone on this site doesn't share your opinion.

I agree. I've learned more from this website, doing research and simply taking action and trying things than I have from most courses. I've received some bad advice along the way as im sure most have but its usually sorted out in short time.

Anyway if anyone knows of a portfolio lender in NC or another way to do a cash out refinance without the 6 months of seasoning please share.

Hey Will, thanks for commenting. Your correct, placing "this contract is assignable" into the contract not only protects us but lets the seller know we have the option to assign. After I fax or email a contract they sign and I get it back. 95% of the time no one even asks about assigning or what it means to the deal. This is more of a protection for us than a notice for them in my opinion. In any case having that statement doesn't change the fact that what I said above is true. As Bill stated there are more transparent methods to get the job done. Those methods simply aren't as widely used. I base that statement on the content of the courses i've purchased and the posts i've come across on this site.

The keywords in my last post were "in most cases" I didn't state all wholesalers do this or that there weren't other methods. I also know of 1 wholesaler who states up front what he plans to do, but again I haven't found this to be the norm. Most i've come across locally and online, this site included, do things as I stated. And if you check the wholesaling area i think you'll see ALOT of other individuals doing things as i described so im not sure why i'd be worried about my name being viewable on this forum. Nothing to hide here. This isnt old pro vs. new pro as there are bound to be differences in the way the older generation operates compared to the younger.

If stating my opinion on the matter offended you Bill I apologize as it wasn't my intent. The purpose of this thread was to find out the validity of the idea and if it wasnt valid to hopefully hear how others have achieved my end goal of doing a cash out refinance. As I stated above my intention is not to commit any sort of fraud, no tangled webs are being weaved, just ideas and opinions. Good luck on your ventures as well Bill and thanks for your insights.

Thanks for the comment Brian. I've decided against using hard money lenders. I looked into it but found it cheaper to use private funds. The rates seem to be almost always cheaper, I assume because im dealing with individuals with money to lend and not companies.

very tangled indeed. I've wholesaled property and know several other investors who do the same. In general we present ourselves as the purchaser knowing full well we plan on reselling the contract to someone else. In most cases wholesalers use creative methods to purposely hide the fact that their not going to be the end buyer. Some use double closing and others simply assign the contract, to get our end buyer in we say our "funding partner" needs to come evaluate the deal. Either way you look at it the seller is being deceived and yet this is common practice, but still the sellers happy because he was able to sell a property fast, and im happy because I received the spread as my payment. There's an obvious reason wholesalers dont give full disclosure to the seller, it would be much harder to explain the deal and we'd most likely lose several deals as a result. In both my original post idea and also wholesaling someone is being deceived. Some may choose to call it by other names but plainly its deception any way you look at it, and like many other creative practices it has its place. Clearly my above idea wasn't the proper place tho

Yes, when I brain storm i come up with lots of ideas. sometimes, as in this example, I need to have them vetted by those more knowledgeable than myself. I am in no way deluded enough to assume I know all the answers, or in this situation all the rules, which is why I asked here. I cant see a reason for me to stop thinking of creative solutions to my problems especially when I have no intention of doing anything illegal. Finding creative solutions has helped me in many aspects of my business and helped half of the investors on this site im sure. Again this was simply an idea that I needed clarity on. Nothing illegal about asking questions :-)

Very good point John. I suppose Ill cross that off my list of creative ideas. Looks like I might just have to accept the fact that there's no way around the 6 month seasoning :-( That is unless I can find a portfolio lender thats willing to do a cash out refi at 2 months. Any how thanks for the input

My original intent was to purchase a property with private money. Do the rehab. lease it. Then do a cash out refinance. I've contacted no less than 30 banks, credit unions and financial institutions trying to locate a portfolio lender but with no luck. I've recently come up with a creative solution, For those knowledgeable please let me know if the below is legal. Thanks

My idea is fairly simple. lets say I purchase a property(3b 2b) for $40k, tax value is 80k. Using private money, I would then have 2 rehab budgets, the first will be 10k and the second will be for 15k with higher end materials. I'd show my private money lender the second. So total private loan would be $55k. When time comes to start rehab ill use the first rehab plan with the budget of $10k to complete the work. Work finishes, new appraisal comes back at $100k. The 5k left over from rehab budget will be my "cash out". I would then lease the property for around $700 per month. This process should take around 30 days. I would then do a rate and term refinance which doesn't require the 6 months of seasoning as I understand it. The new mortgage company would pay back the $56,560 ($55k @ 3%) that I owe my private lender. The payment on my new mortgage of $56,560 should be under $500 per month, easily covered by monthly rent. My private lender is happy because he got a 3% return on 55k instead of 50k. I'm happy because I got my 5k cash out and a lower interest rate since im using a rate and term refinance instead of a cash out refinance.

That's the idea. Any thoughts? Legal, Illegal, too risky, wouldn't work, please give reasons. Thanks

quick update. I have 2 showings this week. Also the wholesaler that I asked for assistance basically disappeared. He asked for the details and said he might have a buyer and I cant get back in touch with him. The Craigslist ad worked great, I've added several new investors to my buyers list and the person viewing the deal on tuesday came from craigslist. We had a rocky start as he basically called me a scam artist, he said I just wanted to get him to sign up for my list and that I had no real property for sale. In response I simply emailed him the pics and details and the situation remedied itself. Hopefully Ill get an offer this week. I have 9 days left on my inspection period.