All Forum Posts by: David Dey

Just kidding, I couldn't resist.

The old can you can you grab me a coke, yes I can gag!!

Ok, seriously.  

Truth is that is a veryloaded and vague question, which leaves the answer quite wide open.

What size is the complex? 

If it is a under 25 unit complex, chances are that this is a mom and pop operation.

If so, many of the same tools to buying a residential unit may apply.

Scenario 1) is the owner high equity?

Options: owner finance, lease option, private first seller second financing, equity trade, have the owner refinance then agreement for deed/ take over payments, zero interest bonds, private money, bring in a partner, etc...

Scenario 2) Is the owner extremely low equity?

Options: subject to, agreement for deed, lease option/sandwich lease, payout the seller's equity (either in one lump sum or if you don't have it all in payments) private money, etc.

Scenario 3) is the owner in distress?

Options:  take over payments (catch them up, work on mod/ Shortsale) bring in a partner, etc.

Bottom line, look at the problem and come up with a solution.

if you have a more specific scenario, we can problem solve and see what options there are.

Hope this helps!!

yes

homesnap is my favorite app when driving for dollars.

You take a pic of the subject house and it gives you the bedrooms, baths, square footage, estimate of value, sales history, if it is in foreclosure or bank owned, rental estimate, taxes, comps, etc.

It also allows you to save the house in your account which helps you keep organized.

Not bad, I'd say!!

Hope this helps.

There is no wrong answer regarding which way you want to go for a landlord deal like this.

We ran a unique landlord campaign a while ago where we looked up all the evictions in our target counties.

On the 3 day notices were the phone numbers for most of the landlords.

We then had our callers (and we made some of the calls ourselves) reach out to the owners by phone and see if they might be interested in selling.

(The idea being that they might be at the height of their aggravation having to deal with an eviction)

We actually got some good deals for creative financing (this is not a wholesaler concept)

We did both L/O and subject to.

Many times the difference was the sellers preference.

In some cases the owner was happy with a long term lease that didn't require fixing toilets. Others were so fed up they just wanted the property out of their name.

In either case, the terms of the agreement make or break the deal.

Just remember, your terms are not based on what a standard contract states, but on what the buyer and seller agree to.

My personal preference is to do the L/O or agreement for deed, with specific terms.

The reason is that I like to have a buffer between me and the bank. Instead of having the chance of default being entirely my responsibility, the owner is still in control of his mtg.

This does not mean I leave him to his own devises. The property is put into a third party land trust (my Atty is the trustee) with specific directions to the trustee to make payments on behalf of the trust.

Also, I do not have a balloon in place but have an agreement that once all payments are made, (the mtg and the owners equity) the owners name will be taken off of the beneficiary's position and replaced with mine.

I personally don't care about owning property as much as I want to control property and cash flow. This is why this works.

As far as subject to's are concerned, the process is similar in that the property goes into a land trust, still with the seller as beneficiary.

On a separate form, we do an assignment of beneficial interest, which in essence puts the property into my name.

  As for the management part, I still do a sandwich lease with the land trust which allows me to manage the property without "owning it."

Hope this helps.

@Mark Senecal, @Michael Kim,  you guys asked about how to get into the private lending business.  There is unfortunately no true education out there besides the school of hard knocks.  (Trial and error)

Or you can trust a broker to make all your deals for you, but in the end no one takes better care of your money than you.

I have been on both sides of the spectrum, both as a borrower and as a lender.  

The one piece of advice I can give you that makes the most sense as given to me by one of my lenders when I first started lending as well.

He said, "Dave, I used to worry about appraisals and valuations and that sort of thing, and lost more money relying on them."  

"Now, the first question I ask is very simple. Would I buy this property for the loan amount?"

"If the answer is yes, I'll move forward to the next steps." "However, if I wouldn't buy the property for the loan amount, I couldn't care less if the guy has the best credit, etc. it's a dangerous loan and I won't do it."

These and other tips he gave me that I have used to navigate through the process of being a Private lender.

He also wrote a booklet on the ABC's of private lending for his family as he was concerned with what his they would do should anything happen to him. (they knew nothing about private lending) it even includes forms used to do business. (Florida forms)

He allows me to share it with my colleagues, so if any of you would like a copy feel free to PM me and I'll email you a copy.

Now this is no u substitute for mentoring under a seasoned  mentor, and of course this does not constitute legal advice... Go talk to your attorney and accountant before ever jumping into something like this.  This is just some good education from someone who has been there.

Hope this helps.

this is definitely a slim deal.  The only way this makes any sense is if you are planning on using this as a rental.  

With a 30 year am, the payment is probably around 593. Plus taxes and insurance.

Let's say you offer to pay the 15k for repairs plus 5k for seller and agent and the HOA.

Would paying 20k for a probably 400 positive cash flow be worth it for you?

If so, then you could use a couple of scenarios.  

A lease option, and agreement for deed, a sandwich lease or a land trust deed subject to the mtg.

Keep in mind, the seller may not care about receiving cash and simply wants the relief of not having to worry about a payment or any repairs anymore.

Also if you are dealing with the selling agent, maybe offer them the 3% payment they would receive if they were splitting the commission with a buyers agent.  

These are your options.

Hope this helps.

People that are in trouble are not logical.  They are stressed out and looking for a lifeline.

You really can be a help by thinking clearly and looking for a win/win solution.  

You mentioned the 70 percent rule, and that is very true.  But part of that scenario is based on the fact that you are putting up all the money. 

When you are basing your transaction on a smaller investment, you can do some of your calculations on a cash on cash basis.  

Example: 240k ARV, 70% rule including repairs of 12k equals no more than 156k.

Example 2:  let's say the back pay to catch up is 8k plus 12k for repairs plus maybe 5k advance to seller for moving expenses (to be taken out of sellers future cut) = 25k out of pocket.  Even with a 50/50 split, after reimbursing your initial investment, your profit will be 35k.  

How many deals would you do if you could spend 20k and get back 55k? (Your initial 20k+35k profit)

And there's nothing wrong with making the contract 55/45 or even 60/40.  You are still being fair.

Make sure you get your contract done through your attorney.  (If you don't have one, get a referral for an investor friendly attorney and make sure you run the scenario by them to get Your ducks in a row before your joint meeting with the seller)

If you need a hand let me know.  

Hope this helps.

@Luka Milicevic is right, public records are the key!! 

Just like he said: 

First check the county assessor's site and see if the relatives (last name just as Luka said) live around.

Second, check out the clerks records/ register of deeds and see if a probate has been started.  If so, the names and addresses will be listed in the petition. (As will all the pertinent info about the situation, including wills and other properties included)

Third, many times the obit will include the city and state where the heir lives.  Again, the assessor's site is going to come into play.  

Fourth, Social networks like Facebook, Twitter and LinkedIn.  

Fifth and most under appreciated, Google!!

"John Smith" Phoenix Arizona may get you to the person quicker than all the other sites put together.  

(Hint: try this search on Google)

John Smith site:Facebook.com 

What it will do is search for "John Smith" only on facebook's site. With a more unique name, this can really come in handy!!

Yes this can be very time consuming, but when you make 30-50k profit from a lead, isn't it worth a lil elbow grease?

Hope this helps!! :)

 Here's my 2 cents.  I noticed that you are a wholesaler over in Ruskin.  Are you planning to buy the property or wholesale it?  

This could become an important factor when it came to a lawsuit, as you may be required to prove that you were both willing and able to close on the deal, should the payoff be made available.  

If you are planning to buy the property, go ahead and put your money into escrow within 5 days of closing so that you can prove you are moving forward.  

Then you could also sue for specific performance as to the seller.  Should he get stupid.  

Another option is to close subject to the mtg and then take the fight to the lender.  

You could even take the property as a quit claim deed, as long as you pay the correct doc stamps to the clerk of courts to cover the mtg.  Then you can step in and take the fight to the mortgagee.  

PS I just bought a property in Ruskin, so if you need a hand, let me know.

@Dustin Verley here is a site that will give you all the pertinent public records for anywhere in the country.  Click on any state on this map and it will take you to a list of counties for that state.  Click on your desired county and it will give you the property appraiser/assessor, clerk of courts/register of deeds, and tax collector information, along with phone numbers and even websites.

http://publicrecords.netronline.com

In regards to your answer, the majority of the recorders do not charge for their services, however some do.  what you will notice as you go from state to state and county to county is that there is little in common when it comes to guidelines and search tools etc.  Some counties provide their own database, some outsource it.  

Georgia has a common search tool for the entire state.

Some counties have their charter written up in such a way that they defer the cost of their manpower by charging a subscription.   However, in most instances they do allow you to come in to their office and research for free.

Hope this helps.