All Forum Posts by: Account Closed

Private/Hard money lenders partner with their investors all the time. The profit is usually split 50/50. The money investor puts up the money. The other investor finds the deal and does the rehab. There are a number of ways to structure the partnership. Partners can be beneficiaries of a land trust, members of a LLC, stock holders in a corp, tenants in common under a JV agreement, General partnership, etc. I don't pretend to know these different arrangements, like you say, I would leave it to the attorney. What all these arrangements have in common is the profit split and the work split.

The mls doesn't usually show the owners name. Your friendly title rep can set you up with online access to their database where you can get property profiles showing owners name.

Clever!

I'm starting to hear some title co's/escrows/banks have heartburn with trust, are you seeing that at all?

Will: You're a smart guy, and probably have good reasons for doing things the way you do, but, I'm wondering why you don't close with yourself as bene then assign beneficial interest in the trust after closing in exchange for the wholesale fee...similar to selling interest in an entity, thereby sidestepping all the theoretical complications. I say theoretical because I think it's just that, theoretical, not really a practical problem.

Brian: I'm certainly not a trust expert, have only taken a class and used a few times. You might be right about the beneficiary not being able to record a deed directly, but I seem to remember he can, nevertheless, the trustee can only do as directed by the beneficiary, nothing more, nothing less, therefore, it seems to me, the bene could conceivably direct the trustee to assign trusteeship to other than the wholesaler-trustee without paying the wholesale fee since the trustee must by trust law do as directed by the beneficiary.

Steve: I get a vacant policy from safeco through my farmers agent and the unused portion gets prorated...don't know about the others.

Jonathan: try it and see what happens. This is one of those things I put into the experimentation category, i.e., you don't really know until you try, it changes from time to time and market to market. Another way of approaching this is to pretty much disregard the listing price, do your own calculations based on your investment criteria and make the offer. Nothing bad will happen if he offer is too low, somebody may yell at you but so what, it's something we all have to get used to. The worst that can happen when making low ball offers IMO is that you get frustrated and quit ... that's the worst.

All good posts. MLS has an advantage in that it shows information you simply can't get from the public records, but, the sale price can be wrong in spite of the MLS rules/fines/regulations. As a hard money lender, on more than one occasion, I've had a borrower show me comps from the MLS that when I look them up in the public records see that the MLS sale price is higher than the recorded sale price in the public records. I vote for MLS plus public records as being the best.

I don't think there is a rule regarding how much below you should offer. I've seen MLS listings say owner will not consider offers less than 80% of asking, I've heard some lenders say they won't accept anything less than 90% of asking. At the end of the day it has to be something you can live with, i.e., the numbers work for your investment criteria.

Interestingly, in my area, looking at the sold short sales, the final sale price is greater than the asking price in a lot of cases. That tells me the reo owner is listing below market to get offers than negotiates up. Don't know how true that is across the board.

It's certainly legal, but not practical. You might be able to find an unsophisticated investor willing to take a note as collateral but generally real property is required. Even if real property is the collateral it's value will most likely have to be way more than the loan amount.