All Forum Posts by: David Dey

 Love your thoughts!!! 

First, yes it is Lakeland!!  Gold star for geography.

Number 2)  the only problem with the negotiating issue is that you have to fix the property before they will negotiate, and because it's so far into their demo process they have suspended the ability to pull permits which would stop the demo order for up to 6 months allowing fix up.  

Also, don't forget that you still have to deal with the mtg and the bankruptcy... Yes the property was released from the owner but in order to buy the property you still have to go through the trustee.  (While in an active bankruptcy, all transactions must go through the trustee)

 Great questions,  

1) no progress yet, DOT is about a year out. If there is any hinderance to their progress they have the power of eminent domain, however this would be like a foreclosure which would wipe out the city but also you and would pay the liens out first.

2)  the foreclosure was started by the seller who had initially provided the owner financing.

P.S.  Steve, I haven't forgotten the "homework" I have for you.  Getting some info from Duval tax collector.

 Great thoughts David!!  Let me address them one by four!! :)

0)  I did not give a purchase price cause in your scenario, you make the offer.  I don't want you to figure out what I did, I want you to figure out what you would do.  As for condemnation numbers, the code enforcement department is the one that condemned it so their liens were 77k plus.  There was no additional amount owed until the property is demolished, then an additional lien will be attached for the demo costs.

1)  in a chapter 13 bankruptcy, which is federal so it applies all over the states, this is called a reorganization of debt, also known as a payback plan. The owner determines what properties both real estate and personal they want to keep, then they make a plan through a trustee to pay back a negotiated debt.

Yes a property is stayed from foreclosure and the demo until the owner determines that they either want to keep it or let it go. In this case, I found this property in the foreclosure files in an on going bankruptcy, so it tells me that the owner had just made his choice to release the property thus allowing the owner to start the foreclosure and the city (not the DOT, they are not in the picture yet, if they ever will be) could start there demo process.

2) at this point no offer is made by anybody, not investors and not DOT. The rule of thumb with DOT is, hope for the best, prepare for the worst. Yes if you have an opportunity to sell to any government body, take it. (Remember, this is the government that will pay $800 for a toilet seat) however, until the final plans come out, which is over a year away, you don't know if they will change their mind as to the path or even if they will do it. You need to have a back up plan, and of course you have to have solved all the problems before they come to you or all your money is going to the problems, not you.

3) unfortunately, this property is actually in a less than desirable part of town and not in a historic preservation area, which lends itself to an area that the DOT would want to run through for a road. (Can you imagine having to pay for houses that were historic preservation homes?) Nope, no historic fuzziness.

4) the assessed value is 67k

6) the initial offer the DOT gives is always the assessed value. Hmmmm, I feel like I'm missing something here.... Like a five or something... Hmmm, oh well, Must be just me..

7) Again, not a sure thing for DOT, but emminant domain works like a foreclosure and would wipe out the lien but any money would be first paid to the liens before you.

7)  Hmmmm... I have this feeling of deja vous.  Like I've done this before.... Oh well, with an initial offer of 67k and a mtg of 49k and code liens of 77k plus demo liens around 10-15k, there wouldn't be anything left for you by a long shot... And come to think of it, if the buildings are down, the initial offer would be around land value only, closer to 25k.  

Hope this gives you more ammo for your offer, great thoughts and questions, it's obvious that reading and writing were your strong points at school... Arithmetic??? Ummmm....  :)

@James Wise I'm gonna throw out another story, see if you get a kick out of this.

So as you know from my previous story, I used to stick around the park on rent collection days, which included Fridays and the beginning of the month. (of course the beginning of the month being the time when individuals received their social security and disability checks retirement + section 8)

For a number of those checks they would choose me for their custodian. (Some individuals were not allowed to collect their own check. It had to be rationed out through a custodian to make sure all bills, expenses, food etc was covered)

Such was the case of, lets call her “Marta”.

Mid forties, “Marta” was an interesting individual, well known in this area for her unusual antics.

There was the time she stood out on her front porch flinging her nightdress over her head (nothing underneath) because, and I quote, “she had to air it out.”

Then there was the time she had chased my electrician across the park with a rake screaming “El Diablo! El Diablo!”

Now remembering what he looked like I can say that was probably an honest mistake.

Suffice to say, she was deserving of her disability check. (Honestly, I don’t know why she wasn’t institutionalized before)

Well, I was her check custodian, so when it came I took her to the check cashing store to get it cashed, then to the electric company to pay her bill then groceries.

She was in a particularly lucid mind frame so I told her that we could stop somewhere and grab a bite to eat.

This of course made her day, and it was actually a chance for me to stay away from the park for a little bit which didn’t hurt as the chore for the day was emptying the warehouse behind the office of all the mattresses and furniture that had stuffed it to the gills and taking it to the dump.

We were going to stop when I got a call from the manager that there was some urgent issue that needed me back immediately. So back we went. Marta was none too happy about that.

When we got back she got out of the truck and slammed the door letting me know her anger.

I soon forgot about her as there was a crowd in the office, each with a need that dwarfed any other. (yes I’m being sarcastic)

I had heard and addressed around half of the needs when Marta stormed into the office demanding to go to lunch as promised.

“Can’t you see I’m busy?!” I blurted. Then realizing how brisk I had sounded, I said in a calmer voice. “I can’t do it today, but we’ll try again tomorrow.”

Out she stormed again. She paced in front of the office a few times, then much calmer walked back in, Went over to none other than “Jonathan the idiot security guard” and asked him for a cigarette. Which of course he obliged, and out she walked again.

I, thinking she had calmed down, went back to the task at hand when in walked Marta again. (not nearly enough time to have finished her cig.)

“OK bye” She said and walked out again, presumably to head back to her house.

“Well finally,” I thought and soon forgot her.

Around 10 minutes later, another tenant runs into the office and says, “You do know your office is on fire?”

We all ran out and sure enough there was a blaze running up the side of my building easily 30 feet high.

Apparently the guys who were emptying the warehouse had left a large stack of old mattresses pushed up to my office’s back wall.

Now I have an interesting piece of trivia for you. Old mattresses make great kindling for a half smoked cigarette.

So, I’m standing in front of this blazing inferno in shock as a crowd starts to gather and watch the festivities.

I was jolted into reality by my manager’s panicked voice.

“What are we going to do?” she sobbed.

“Call 911,” I Yelled back. “And go see if we have any fire extinguishers!!”

“I’ve got one in my apt.” One tenant yelled.

“Well go grab it!” I responded. “Everyone go get your fire extinguishers!!” I hollered to all the lookie loo’s.

Just at that time the first tenant had come back with his fire extinguisher.

My heart sank when I saw what he had brought back. The fire extinguisher was one of those mini kitchen extinguishers about as wide as a 20 oz coke bottle. (thankfully a little taller)

I stood there for a second then thought. “What the heck?” grabbed the thing and ran toward the blaze.

I had sprayed out that peashooter within a matter of seconds with what seemed to be no results. The flames were so hot I had to run back to the place I started from, where waiting for me was my next smurfed size extinguisher.

Over and over I ran into that blaze with my exercise in futility, (this gives me new respect for that extendable umbrella and bee bee gun)(and if you don’t get that joke read my first post) but believe it or not little by little the flames were going down.

By the time the firetrucks got there the flame had been totally put out. 30 or more mini extinguisher littered the ground. I was covered in ash and soot. The plastic on my baseball cap which I had on backwards (because that’s how I roll) had melted onto my forehead, and the soles of my sneakers had literally melted away to a mushy mess. In other words I looked the part.

When the police arrived and asked us what had happened, of course we knew and told them about Marta whom we noticed across the highway watching her handiwork.

When she saw the police men crossing the street to question her, she made a shriek and took off running causing a foot chase that looked so comical I almost forgot about the damage for a moment. (These boys had not missed a donut)

I tell you this story to say this. “Hell hath no fury like a crazy woman scorned.” or

Fella’s, keep your lunch dates!

 Well, of course they would throw their couch out their 3rd story window in a rainstorm.  Wouldn't you??

 Gimme a good one!!!

Welcome to the 2nd annual Hunger Games!! (Meaning that we all are hungry for success... There will be no killing here)

Due to the success of the first game and multiple requests for a round 2, well... Here we go!!

Again, here's the game: I'm going to give you a real life scenario from one of my deals and see how you would purchase it. Best scenario as determined by votes wins the coveted Super-Duper Supreme Real Investor Grand Poobah award!! (I don't think @Joshua Dorkin has gotten on this yet so there is a backlog but that makes it all the more valuable)

If you want I'll tell you at the end how I did buy it. Very likely your scenario will be better, But just like the lottery the only chance at winning happens if you play.

So here goes... Using a foreclosure search like the one @Tangie Cousins offers at foreclosuresdaily (no I am not at all associated with her service but I'm giving you specifics of what I use for your benefit), I stumble across this gem. (Am I being facetious? You decide)

This property was a built in 1925 4 bedroom frame "Florida cracker" house, with a 2 story garage duplex on the same lot. (Apparently, this was a popular thing for this area which was a stop off point between Tampa and Orlando. People would build the apt first and live in it while they built the main house, then when they moved into the "big house" they would rent out the units to travelers going through town. A personal motel, if you will)

Well, this property had been derilect for awhile, and was now in foreclosure. There was a 49k seller financed mortgage that was now in foreclosure.

The property had amassed over 77k in code enforcement liens at $100 per day and growing to the point the city had voted and passed the recommendation to demolish the structure and was going through the process.

Also the owner was in chapter 13 bankruptcy.

The only positive is that it passed my tax assessed test. If the mtg amount listed in the foreclosure complaint was less than the assessed value, then I would personally knock on the door as this almost always guaranteed good equity.

One more wrinkle, good or bad, you decide. The D.O.T. is planning a highway bypass right through the middle of town. This property is right in the path of progress.

So is this a deal? And if so, how should we proceed?

Annnnnd Go!!

P.S. Ok, since we all know that part of making good strategy is asking questions, feel free to ask any questions and I will try to give you all the details... And again, if I don't remember... I'll fake it!!

P.S.S.  Remember, most votes wins, so please read through all the submissions and vote for the ones you like!!!  Show them some love!!

P.S.S.S. Anymore s's and it may start sounding vulgar..  But more importantly, big shout out to @Terry Free who is the inspiration for this fun thread.

Hope you have fun!!

@Brian Gibbons @Brian Saeger @Joe Fairless @Wes Eaves @Charlie Fitzgerald @Normay Borgelin @Robert G. @Benjamin Pekarek @Dessiree Fermin @Mark Elliott @Jay Hinrichs @Account Closed 

Hey you guys, please chime in... Or at least vote for your favorite idea!!

@Brandon Turner said it perfectly.  You don't need to worry so much about a card, concentrate on making good relationships.  

If you do want to do something different that will catch their attention and make you stand out in the crowd, try this...  embrace your newness.  

Go ahead and get your business cards and put on the front in bold letters where the name would go,

--------------------------------------------------------------

NEWBIE!!  Entirely green but willing to learn!!

Looking for GOOD contacts

                   GOOD information

                   GOOD time :)

-------------------------------------------------------------

(Or something like that)

We all were newbies at one time, and were scared speechless as well.  The fact that you embrace your newness will bring a smile to the veterans and will let them know you aren't afraid to put yourself out there.  This is one of the best traits for an investor to have.

Other than that, look for the silver backs in the room.  (Yes I am using a gorrilla analogy for real estate investors)  

You can always tell the silver backs in the room, they are the ones surrounded by the newbies telling their war stories and answering questions.  There is a wealth of knowledge in them as they have been in the trenches and have been there and done that.  You'll be able to gleen amazing knowledge from them.

Did I read right that the park fee is 405 per month?  That will eliminate the deal for a lot of investors unless they are already in the park.  Also, was this home on the open market?  If not then marketing to an investor in the park will be easy.  

Get the property under contract, then pull up the park either by street name or if it is one address with individual lots, it will be even easier, in the property assessor's site.

You will then have a list of all the owners in the park.  Look for multiple homes owned by the same person or of course look for corporate names as owners.

Then reach out to them and offer them the deal.  

 Number 1) get yourself a good real estate attorney!!

Number 2) get yourself an LLC like someone had suggested on here.

Number 3) Become well versed in the market you will lend in.  (Most lenders like to lend within an hour of their home, that way they can drive by the property, before and during the loan)

Number 3) trust but verify!!!  (What I mean is this, many people will come to you with the "greatest deal ever!!"  And some of them may be great, but you need to do your own due diligence, both on the deal and the borrower.  And use this as your main guideline, "would I buy this property as an investment for what my loan amount is?"  If the answer is yes, then proceed to your due diligence.  If the answer is no, then I don't care how good their credit is or their exit strategy, it's a dangerous loan and I wouldn't do it.

Remember, the final recourse for a lender is to take the property back.  If you have to go after a judgment then you lent wrong in the first place.

These are a few pointers that will keep you safer. HMLending can be an incredibly profitable business, but it is not a get rich free scheme either. You need to be educated in what you're lending on. That's why the normal evolution to an HML is property investor to private lender.

Hope this helps