All Forum Posts by: Charles Patterson

I would love to know what you find out as I have been wanting one as well but have failed to find one yet.

Standard disclosure comment of talk to an attorney and I am not one... blah blah blah.  That aside.
Check your states Landlord/Tenant act.  I believe, key work is believe, that in PA we inherit contracts when we purchase the property.  In this case the new owner would inherit the contract if they had to foreclose.  In that case no recourse on you because the new owner has the contract technically.

As for the foreclosure, that timeline and ability to foreclose will depend on what type of contract you have agreed upon.  Far too much information to go on here, but a land contract can be taken back quicker than a straight up owner financed deal where you have already gone through closing and the previous owner is carrying the note.

If you wanted to keep yourself a safety net you could put some verbiage in your contract that states if the property changes hands (is sold) that the current contract becomes a month-to-month or that it is null in void completely  and they have to seek a new contract with the new owners.  But you will want to put some feel good safety nets in that paragraph for the tenants.  Probably something along the lines that if you intend to sell the property that you will give them X months notice and option to break lease early without early termination penalty should that happen.  But all of this verbiage is going to be depending on your local Landlord/Tenant laws (again).

So in this circumstance I would encourage you setting up a meeting with a local RE attorney to discuss the situation and how you will want to protect yourself in the lease.

If you are still looking for an RE Lawyer, I would suggest S.R.Law out of slippery rock.  They work in multiple counties and have been doing this for a while.

@Aaron Armstrong, I think I can help here.

I work with Mercer County State Bank.  They do portfolio lending.

Here is their website:  https://www.mcsbank.bank/

and here are their locations:  https://www.mcsbank.bank/Locations-Hours.aspx

Though they are "Mercer" you can see that they go into other coutnies, and will work with properties within a 50 mile radius (which butler easily falls into).

I personally have talked with "John Gilliland" out of the Grove City branch.  His contact information along with the banks list of lenders and their location they work out of can be found here:  https://www.mcsbank.bank/Commercial-Lenders.aspx

Good luck, hope the info helps.

@Michael Noto, are you giving them 7% APR (as a standard loan), 7% on the back end, 7% return? curious as to how you have your 7% structured.

@Kevin Romines Scalability, sharing the wealth, and timing.

Mainly on the scalability is that the traditional loans done 100% fund properties because you have to have skin in the game, and there is only so much collateral I can bring to the table before it is fully leveraged and I can no longer get traditional loans.  Which I should note that I am lucky on and a local bank that I work with does portfolio loans.  So there will be a time that those loans will not be an option to me until I build up more equity.

Sharing the wealth, There are friends, family, co-workers that can benefit from what I am doing and in return allows me to continue to grow.

Timing... those traditional loans can take time to put into place.  If I can have the money on short order I can act quickly when a deal comes up that you have to act quickly on.

I do have some properties that I will be closing on soon that I can re-finance from and wont have a great "need" for the private money for a little while.  But I want to get what ducks I can in a line now to pre-pare for the future.

Any advice you can give on this topic?

I should mention that I am primarily looking for 2-4 unit houses (not Commercial yet)

BiggerPockets, I am looking for your opinions and wondering what you do.

I am getting to the point where I will soon need to find Private Money to continue to fund my investments.  I am wondering what your standard offer is to investors and how you structure that agreement.

For an investor, I am looking at offering 7-8% yearly return + Equity share when sold or refinanced.
For a lender I would be looking at a negotiable Fixed Rate % APR over 15 years (possible 5 year balloon if they desired)

How do you structure your agreements?  If doing equity share, how do you determine what % to split?
What types of documentation do you have with the agreement?  Do you have some examples you can share with all of us?

Thanks in advance for any of the advice you have to offer.

Update on this.  Seller talked to her attorney and came back with all kinds of stipulations and demands that I was not comfortable with, and we decided to part ways on this deal.  

One of the biggest is that I requested to see the current leases for the property and the past few years Schedule E (as this was an investment property of hers) in order to verify the performance of the property, and she went off that I had "No legal ground to request those documents", but she would provide the current leases AFTER we close.

That sent up more than one red flag in my opinion.  I feel like she is trying to hide something from me on this property. 

Your very welcome. Tag me with an update with what you decude to do. Always interested in what others do.

And if you do the 1031 I would love to know your experience with it.

Don't feel shy about posting any possible deal you find to input from others.  Having inpartial eyes look over a deal can be invaluable.