All Forum Posts by: Colin Bochicchio

Travis,
The DOS most likely in my opinion would NOT be triggered as long as you are making timely payments on the note. I would get a backup fund or extra month so in case he is late or default you can pay your lender regardless so you are covered. As to charging a higher rate absolutely just be aware of usury laws in your state regarding interest rates..
That is one of the many reasons I use a land trust to avoid the DOS and lease out on a triple net lease NNN basis to a tenant.

You can also sell the note as long as it is structured correctly so keep that in mind when you setup the note/contract..I am going to a advanced note training this weekend so hopefully will learn how to best do that.

Mr Finance examiner is correct in his analysis in that more information is needed to give better answers to your inquiries.

Good luck.

Ryan,
This does not sound like deal even subject 2.
One thing is one or even 2 months behind but 25K it sounds like he did not pay his property taxes so you need to do due diligence on this.
I would verify the appraisal and you did not talk about repair or rehab work that may be needed and why he is behind.
As to the 10 K promissory note how is it that he claims 10K he should be paying you to take if off his hands or maybe I read that wrong..??

How will you make 5K assigning the contract since investors want properties wholesale I do not see any cushion for an investor to profit.( No Equity to speak of)
For the investor between marketing and closing costs there is no profit margin there or very little.
What is the market rent ARV for the property so that way you know the rental income for a buy and hold investor so your numbers crunch since if it cash flowed my guess is you may have a investor who does those type deals if you market it that way.

Another potential problem if you contract is not right and you take on the liability you could be liable for the payments so do NOT make his problems your own..

Walk away no deal in my view..

Call me if you like to discuss...

It just goes to show you that you never know who you are doing business with.

Patrick: Thanks for the email and I did reply back to you.

Wendhel: Good information in helping fellow BP members avoid a bad business decision.

To me it is an added plus that any note lead site be developed by actual note investors and know the note business since that was the case in the tenant leads site i had worked with.
They need to stand by their product and this Note lead site evidently does NOT do that..

Well, Tyra General I tried emailing you and it bounced back 2X so makes me wonder.

Please make sure you contact information is correct not a good first impression to wish to work with investors.http://www.biggerpockets.com/forums/86/topics/54989/reply#

I like to take a stab at the land trust option since it was asked in the original post.
Well, the property would be put into a land trust and the wholesale investor would be assigned a % of beneficial interest.
As to the assignment of beneficial interest all negotiable between the parties. The seller or grantor would typically hold 10% to make it a viable LT transaction.

This would legally circumvent the seasoning issue however you would need to make sure the title/escrow company understands land trusts and can insure a land trusts some do some don't so you need to pre-flight the deal first.

The buyer you are wholesaling to would be assigned an interest in the trust upon putting up monies in escrow. No transaction funding needed on this.

LT can be a little more involved but once understand them it can be a much better way to wholesale your property..
The trustee being the owner would legally sign through the escrow on behalf of the trusts beneficiaries.
When the buyer is funded for the wholesale all the beneficiaries would vote to the trustee to sell the property at the agreed to price so in that way no party is circumvented by another due to the trustee would only act up unanimous vote from ALL beneficiaries.
You would not need to obtain the A--B transaction funding using a land trust..

Using a land trusts you are following federal law specifically 12 USC 1701 d j (3) commonly called Garn St Germain Act of 1982.
You are acting as a principal in the transaction and provide anonymity and privacy for your investors in the transaction. The beneficiary can hold their interest by way of a LLC or corporation or self-directing 401K for that matter.
The 3rd party trustee( very important) would pay you upon settlement per the trust/beneficiary agreements to your % held and any rider/addendum agreement in place..
You also protect the property from liens against title and you have a exit strategy since if you for some reason can not sell you can lease it out as needed.

You just wish to have your buyer lined up BEFORE you go to setup a trust on your clients property so you can wholesale it as planned.

If you can do a A--B deal then do what works..

Hope this helps..

Lathea,
I looked at the site and looks interesting and a similar example that I can relate to was a a lead site for tenants that I worked with.
I liked it due to the lead return policy. If I could not contact them or had problems and they validated it I would get credited back that to me is a great policy.
I actually still have monies in there if I need to use it.
The information needs to be or should be current so it is usable to you as an investor so I guess obvious stuff.

I much rather have somebody calling me but when starting out or being new to it I would imagine one would need to call to get those contacts.

I'm looking to get into notes so hopefully the course this weekend will help me with that..

Justin,
Don is correct but to be more specific all the beneficiaries of the trust needs to sign and notarize the document especially so in beneficiary directed trusts.
What type of trust do you have setup..??
Just so you are aware the trustee holds both the legal and equitable title and is the said owner of the property not the trust itself..
The new trustee on record should be filed with the local recorders office to show the new trustee on file.
Typically, a letter of direction is notarized voting for or designating the new trustee and all must be in agreement.
No legal advice given just my understanding..

Mthein,
The first question I have is are you getting good income from the properties and are they all leased out to tenants..?? if not you need to look for ways to increase your existing rents or leases to procure or leverage a higher net income from your properties.

There are many avenues you can do creatively you just need to find the one that can work the best in your scenario.

To question # 1 Yes you can owner finance a buyer but make sure you are protected in the transaction to ensure you have some monetary committment if your buyer defaults. If you do owner finance make sure the bank does not find out or they could acclerate your loan especially if you are not making payments if you still are they usually do not call the loan for that.

2. You can sell the note to a note buyer but honestly the overlevaging will make it not very attractive to a note buyer but you need to create a seller financed note first then you would sell it to a note buyer.
Before you even setup the note you would want to be working with a note expert whom can assist you in properly structuring the note before you jump in from the my understanding most note investors can this "pre-flighting" the deal.
It sounds like you wish to create a wrap around but in most you would be pocketing the difference as your profit after you pay your note so that would not apply here.

If you can not move the property a longer hold may be the way until the market turns back around.
You need to think about what is my ultimate exit strategy on these properties and if you package the deal you potentially can sell it as a package to investors whom are very experienced in duplex and triplex type investments.

If I can help further feel free to contact me my info is in my signature file and I wish you the best of luck..
Thanks--Colin

Mr biggerpo,
My apologies if I came across that way I just use trusts in my investing so I am not selling trusts or anything I can assure you.
I just wish to network with people whom wish to invest.

There are many ways of course to invest in real estate and I do respect all methods, I just prefer using trusts thats all.

Thank you for bringing this to my attention..and I hope to learn and network well with biggerpocket members.
Thanks.

My name is Colin Bochicchio and I just started on the board here at biggerpockets.com and so far Im impressed by all the forum topics you guys have here.
I live just south of Tucson Arizona and I work in Information Technology at the Nogales Border.
I work primarily with Land Trusts in my investing through Bill Gatten's Equity Holding trust transfer system which is a very dynamic way to invest in real estate.
Any areas of REI that focus on land trusts or how to use them I hope to be your guy in that area.
I look forward to working with you gentleman and of course I can use some REI knowledge in areas Iam weak in or not well versed in.
The reason I got hooked on using trusts was due to some diasterous R/E deals I did and got burned and so inevitably learned the hard way.
Feel free to contact me at your convenience and my contact info is in my signature file.
God bless all...