All Forum Posts by: Ray Slack

Well they really can't sell without paying off the loan. Unless the buyer doesn't have title work done and doesn't get title insurance. Which rarely happens these days. 

A good real estate agent should know the cap rates in a market better than anyone else. Higher appreciating market tend to have much lower cap rates because your making your profit in appreciation while markets with stagnant appreciation demand higher cap rates.  I work in 2 totally different Markets. Miami Beach Florida and Baltimore Maryland.. Cap rates in Miami Beach are 2-4% and Cap rates in Baltimore city are that I invest are $15% to 25%  Just to give you and idea of the wide variety of cap rate differences.

I agree consult a foreclosure attorney and have him review it.  In Florida we have many 1st and 2nd mortgage that the borrower didn't make payment on for years and since the bank didn't take action to foreclosure after 5 years the debt became un-forecloseable. It was still a lien on the property but the bank can't foreclosure and the owner can basically stay there without paying forever or until they try to sell it.

toss out the hiring an attorney idea.     It would cost you much more than your deposit.   Email me privately and I'll see if I can help.  

Sounds like he is trying to wholesale it

Looks like the numbers make sense. Is this in an area that you know the market well? Is this your first flip?  Do renovated homes in the area sell quickly?  All things you need to know.  Also read the contract from HUBZU carefully.. They are all onesided towards the seller.. Some are just plain Unworkable.  Saying the buyer assumes all liens on the property and seller make give buyer a quick claim deed.   Had a friend buy one from HUBZU and found out 4 months after purchase that the front foot assessment due for the last 10 years had not been paid.. Was $1k per year but with interest penalties and attorney fees payoff was $24k.  He ended up losing money on the property.  Don't use their title company unless you have an attorney review the title policy they are writing and the exclusions. 

First off do you have the cash to buy the house if the seller agrees to your offer? 

Not hardly enough information in your post.. Do you have a job that you can qualify for mortgages on several rental/invest properties? How much are you making now? How much cash are you starting with..   What skills do you have to be able to make $100k per year?  or are you talking about passive income?

Everyone's answers are assuming something about how much cash you have currently. The easiest way to make $100k passive income is to put $5,000,000 into a CD at 2% and you'll make your $100,000 pre tax. 

Does the owner still want to sell?   if it's a great deal just don't make a big deal about the tenants and buy the house.  Then you will be the owner and file for eviction or pay them to vacate.

If the owner not longer wants to sell it's not your decision and there is nothing you can do about it.

Most of the time you must pay cash for HUBZU purchases.. meaning you can not have a loan on the HUD.. You have a few options depending on your situation.. A few questions need to be answered.

1. what is your plan for the property? Fix and Flip?  Rental?  Move in?

2.  Can you qualify for a traditional mortgage?   W-2 employee? not self employed?  Speak with a loan officer if you are unsure. 

Also, HUBZU contracts are VERY one sided depending on the seller you will pay all costs, all fees including the seller's fees.   Don't use their title company unless they agree to pay for your title policy..  They are usually not anymore and their title companies charge 3x the fees of standard title companies.  Also, they write exceptions to the policy that can screw you as buyer.

You an do a cash out refi right after buying it but they use the sales price you purchase for the LTV and LTV is limited to usually 70-80% .. The sales price usually does NOT include the buyers premium.

I buy a lot of properties from HUBZU but you just have to know what you are getting into.

Ray