All Forum Posts by: Michael G.

@ Kathleen - EXACTLY! She couldnt tell me what the law was? It was an attorney that someone here on BP recommended. She never returned my call and I'm using someone else now. She claimed she had done all these short sales but couldnt figure out how to legally manuever around the whole 90 day seasoning issue lenders like to use. She had no thoughts about buying in a corp and trasferring ownership or any any creative ideas about how to the issue. She just kept telling me "the title comapanies are very nervous". Needless to say I couldnt use her.

Corey - Maybe i'm missing something but its not clear if you are looking to a) buy and live in your self b) buy and rehab c) buy and wholesale to rehab investor.

I have 2 short sales in the pipeline now. They were both vacant properties in fairly decent working class neighnorhoods. I looke up who the owner's were, tracked them down and asked them if they wanted to sell. They both said yes.

I had them fill out an ATRI so I could speak to the lenders on their behalf and set up a short sale. I then had them list the property with a realtor and sign a purchase and sale agreement with me.

We are still waiting for the approvals to come back. There are more moving parts to the deal but essentially thats a snapshot of how its playing out. The success portion remains to be seen and we will probably use Duane's company if we need transactional funding.

I could be wrong but what I'm hearing from you is that you are looking for your deals on the MLS?

@peter - My attorney said the same thing. He said to check and see how title was held because the estate may own part of that property. I asked him if I need to pull title and he said no, just get a copy of the last deed that was recorded.

@ john - The wife hasn't made a payment in like forever and moved to another state. The property is vacant and distressed. The lender, Argent Mortgage Company is long gone. The mortgage is with who now? Do you know? I dont. I cant determine who now has the mortgage. Who do I call to figure out what the pay-off is or send the ATRI to?

Husband and spouse bought property together. Spouse and husband divorced. Husband died. Spouse is still on deed and mortgage. Mortgage is/was with Argent Mortgage Company which is long gone. Spouse really wants nothing to do with the property. Can I offer her a few bucks to quitclaim deed the property to my corporation or to a trust and take ownership? I understand that there is no warranty on title but wouldnt it be a good way to take control of the property from an investors standpoint? The property is distressed but in a fairly good neighborhood. What is my exposure in this situation?

I would get a realtor to run you a report on REO preoerties that sold for cash within the last 6-12 months in the same neighborhood your deal is in. Take that list of properties to the courthouse and look at the deed transfers. Those are the real players doing real deals in the market. Not tire kicking Craigslist reponders that want to talk your ear off about RE investing ( Sorry I digress). You will see some of these players have bought 2 or 3 houses in a year. Send them a letter basically saying "I saw you bought houses for cash. I have a fixer available. Please call or e-mail to discuss" That will help you stack your buyers list nice and high. Its better to have 50 cash buyers in your pipeline than to go looking for a cash buyer at crunch time.

I agree with Bryan A but at the same time you cant have them calling you for every door knob tighten or light switch replacement. I've found that keeping them on a tight rope helps. Don't let them replace big ticket items without them providing you receipt. I want to see the receipt for the water heater they replaced. I dont want them getting it from "Joe's Recycled Hardware Store" for $150 and charging me $425. If and when possible have them take a picture of the before and after of the repair. My buddy owns a property in Rochester, NY and lives in NYC. He is 5 hours away driving distance but can purchase properties for $30k, $40k $50k easy. He had a "mom and pop" PM. They mismanaged his property, wouldnt return his phone calls and charged him 15%! (dont ever pay 15% for PM) He should have cut his losses long ago when they kept giving him stories about why he couldnt keep one of his units rented. The final straw for him was when he called them up one day after being promised a call back. The PM's wife who also serves at the bookeeper told him that he was disturbing them at dinner time! He fired them that day. Fast forward to 3 days ago. The new PM took pictures and showed him the areas of neglect that needed repair. Nice touch. They also whacked him with a $2300 repair estimate. I reached out to a contractor I'd done business with in that city who went out to the property and came back with an $1875 estimate. $425 savings. The point is that that some PM's sub out the work and charge a premium on top of the already high sub-contractor fee. Its a good conversation to have before any contracts get signed. It also helps to have someone in that are that you can go to alternatively for repairs. Also make sure that there is a conversation had about what their fee is if YOU find a tenant for a vacancy. They should really only charge you fro screening that tenant IMHO. They should never charge you a PM fee while the property is vacant. Typically lawn cutting and snow removal is an additional fee on top of the ordinary monthly maintenance charge but you can usually negotiate that into your tenants lease. By all means make absolutely sure they send you detailed monthly income and expense and examine them closely. If your property was recently rehabbed or you turned it over to them in very good condition you should have no monthly expenses. However if you gave them a property that was leaning to the side when you bought it as-is for $17k, best believe your monthly repair bill will rival a small mortgage payment.

Thanks Cliff. Kudos to you for serving. I wish you a safe and speedy return.

Thanks Shari - My exit strategy was to double close with a cash buyer or sell all my shares of the entity created to buy the property. I dont intend on holding it for more than a day and I'm using transactional funding to close so I dont really have the luxury of a 90 day period. The 2nd example you gave is probably a more elegant solution in this particular case. Still, I havent heard of the bank going after someone for violating that clause. I wonder what the penalty would be?

Am I by myself on this issue wholesalers? Better yet has anyone investor's, attorneys, ex-loss itigation people ever seen a bank go after someone for violatiing this clause?

I'm looking for a prudent strategy to manage a clause ( the buyer agrees not to sell the property within 90 days of closing of this sale.) that the lender insists must be in the purchase contract of a short sale property I intend to wholesale to a cash buyer. I'm thinking 1) use an entity I own to purchase the property 2) sell my shares of that entity to my cash buyer for my wholesaling fee before closing. Does anyone think this is not a viable strategy in this situation and has anyone run into the "the buyer agrees not to sell the property within 90 days of closing of this sale" edict from lenders and how have you dealt with it?