All Forum Posts by: Chris C.

Thanks for that great response.

The problem with the exemption is that the code reads "a natural person who sells residential real estate and who lends or services, in one calendar year, no more than five purchase money notes". So my LLC can not do any notes under this exemption and I personally can not service more then 5 which means after 5 I am out of business till one pays off. To add insult to injury the above quotes paragraph ends with "unless the United States Department of Housing and Urban Development or a court of competent jurisdiction determines that this exemption is not in compliance with the SAFE Act pursuant to Section 1508 of Title V of The Housing and Economic Recovery Act of 2008, Public Law 110-289;" so HUD can just decide that I am not in compliance and sue me for the 5 notes I have created under South Carolina law. Crazy world.

That is way I have decided that I am going to pursue my MLO license. The financing side of the business is definitely what interest me so that is the direction I intend to follow despite the governments best efforts. Your advice about locating a local MLO is excellent and I have been pursuing that.

A couple of questions for you C Martin:
Where did you educate yourself about

All these types of laws are what I am struggling to find gathered so that I know the laws and regulations that I should be following. You seem to know SC law readily even though you live in NC. I have spent hours reading law just to know what I know about SC Safe Act compliance. I have seen it many times on here where someone in one state is knowledgeable about laws in another. Where are you guys getting this information from? I know the state websites, as you linked above, but there are thousands of pages of laws that I have reviewed. How do you locate the things relevant to this business relatively easily?

Again thanks for your response.

I have been doing Lonnie Deals for a little over a year and have so far been quite successful. I want to take my business to the next level by establishing the documentation and processes that insure compliance with state/federal regulations and create notes that are marketable to note buyers. As I plan to move into land/home packages and SFR this becomes more important.

I would like this thread to detail how someone might go from where I am to offering financing like any other established financing company.

The only rule as we create this list is the reply to get a lawyer doesn't cut it. How can anyone evaluate whether an attorney is providing them what they need with out at least some base knowledge. On that note the information gathered should be used to select a good attorney to assist with developing the business.

How are you pros managing your seller financed business?
What, if any, 3rd parties are you using and how?
Any tips, pointers, etc.

@Frank. Because it is a cash cow and has low barriers of entry. In states with high ratios of mobile homes I personally believe it is the best way to build capitol. Besides that my ROI beats anything else I can find in any price range.

Welcome Jeff,
I am located in Easley. Feel free to contact me as I am always looking for like minded people in the area.

Chris

Thanks for your reply Dave.
I am referring to the availability of investment options.
An example would be if I wanted my IRA to invest with a fund that is only available to South Carolina residents. While I am a resident of South Carolina my IRA's custodian is a company in Ohio. Would my IRA be eligible for this fund.
Another example would be an investor who is using private money within their state and utilizing the SEC intrastate exemption. If they accept an IRA investment from a state resident using an IRA whose custodian is out of state does that violate the intrastate exemption. Personal residence is easy to identify as is corporate residency but what is the residence status of a SDIRA whose custodian is a different state then the beneficiary. I hope this clears up my question.
Thanks

I sold a 1986 16x80 3bd / 2bth for 10k with owner financing to the first people that looked at it and they put 6k down. So for my next deal I asked 15k for a 1985 14x70 2bd / 2bth and again the first people that looked at it put 3k down. I now have a 2001 16x80 that I will be asking 25k for and require a minimum of 3k down. These are all on rented lots. My rehab cost were approximatly 2k for the first and 2nd and will be about 5k for the 3rd. In my experience you have to keep in mind it has been several years since Lonnie wrote his book. Also I think you can adjust the 20 years. I don't look at anything older than 1980 but since then they seem to be reasonably built.

Examples for 16x80 rehab cost
Carpet/vinyl installed 1000 to 1200
All walls and ceiling painted including materials <1k
New front door/casing with screen door installed 325.
Complete heat pump system 3200-3600

Just some of the major stuff I could think of and the labor prices is using someone I do not have to baby sit. Remember that when rehabbing a trailer you are dealing with different clients then a house. I rehab nice but not to nice. You can still double your money even if you pay a little more then what Lonnie recommends.
I need to see how much I can get for one without rehabbing it.

Keep at it and get that first one under your belt. You will do fine.

Now if I could only find a note buyer.

To meet any residency requirements does my SDIRA "live" in my state or the state of the administrator?

This is more of a broad question then any specific situation but this could be an issue for anything from SEC compliance for Intrastate Exemption to local taxes for being an out of state investor. I couldn't find anything when I searched but surely this has been discussed before.

I have often wondered if it were feasible to have contracts on Biggerpockets that were state specific but created in a wiki type format. People could edit and discuss the content to come up with contracts that conformed with Bills original post. I know this is a but far fetched but is it doable and would it create a better product?

All of my contracts came from discussion with local investors and then my local magistrate reviewed them but I still see things that I wished my contracts, especially leases, included. Is there not a lot of benefit in a group as large and experienced as Biggerpockets putting together something like this.

Lets assume this is money they can afford to lose. Sometimes these types of threads get clogged up with comments of do nothing if that is all the money you have.

The lower dollar amounts I recommend mobile homes. That is how I started but am now interested in peoples suggestions at 25k and up.

I too have been investing in Prosper since about 6 months after they went public. The first several years I broke even but I now get about 13%. It is also in my opinion a great place to save money in AA rated loans. 5-6% return with your money spread across numerous loans. Bets a CD or Money Market in my opinion.