All Forum Posts by: Demjan Van Der Kach

Greetings,

I am new to notes and have a property I would like to sell. I am going to describe the "case" and would really appreciate your ideas on the seller financing route. 

The condo 3 bed 2 bath, 1150 sq ft is located in central Phoenix, AZ in a nice gated community. The HOA says the complex is 49% or less owner occupied. So, FHA loans are hard to get. The complex is well maintained. The unit is in a very good condition, has a garage. We paid 115K cash in 2012 and rented it out since than. Rent about $1150-1200 per month. Currently the comps for the same units (they don't get to the market often) 220-235K. We put the condo for sale on MLS for 229K. There is an average traffic but no offers. 40 days on the market so far.

I like the idea of selling but started considering seller-financing option that I have never done yet. My knowledge is limited and I would appreciate your input. 

I made some spreadsheet and ran a few numbers using financial calc... but the more I look at it the more questions arise. My plan A to keep the note (notes) for 2-3 years and than sell to probably an institutional investor. 

My current thoughts down payment 20-30% and the note for the rest 8.5-9% with the balloon after 5 years. Or shall I offer the 1st and the 2nd position?

Are the seller financing of condos with owner occupancy less than 49% difficult?

I am interested to learn about the tax consequences of down/payment/ installement payments. I hope I don't need to pay taxes until I "recover" my initial investment cost (that was 115K) or basis.

I am planning to talk to title company and probably lending attorney to "minimize the damage".

What is the closing costs for seller financing deal in comparison with conventional buy/sell transaction?

Thank you.

Thank you for great points. I explored more on this topic and found some great information.

What is really interesting to me at this point - to clearly understand the "Deal Flow". I saw a few illustrated rehabs on this forum or note purchase. I wish somebody could share the process of hard money lending from start to finish. I hope it is not too much to ask for.

Hello there,

It was on my mind for a while to become hard money/private money lender. I am interested to learn this business and would appreciate greatly initial guidance. In a perfect world I would like to partner up with a mentor. However, before committing to "10,000 hours of learning/practicing the business" while having a full time job I want to make a very balanced educated decision. My ultimate interests: financing the real estate deals: residential and commercial, note investing. 

Thanks in advance.

Hello again,

I am looking to buy farmland in Portland metro area. Looking for an experienced land broker. If you happened to know one please let me know. 

Thanks!

Hello there, I would greatly appreciate a reference for a good RE attorney to create an LLC for my short (airbnb) /long term West Linn rental, preferably a local one with a good knowledge of township specifics.

Thanks!

Hello all,

I am looking for the opportunities to lend from my SDIRA. I am new to private lending. I wonder how regulated the field is for a person who would lend "on the side" while working a non-real estate full time job. Am I restricted by famous Dodd-Frank, any state specific Arizona restrictions? Do I need to have some sort of license? Is the liability high?

Sorry for very basic questions. 

I am looking for 1st positions lending, short term (about 1 year/ or sale), 10% APR, no points, all closing costs are paid by buyer, investments of 10-20K per deal. My client screening would be very conservative.

Thank you.

 True. due diligence is everything. It is very complicated for no-pro though. Life is too busy to do so much due diligence for an average professional. Here is the issue arises again - invest in what you know well. And for lots of us it is not a real estate... It is deceiving that we understand real estate so well... we don't.

these new funds pop up like in a bubble... with lots of unknowns...

great thoughts. @John Underwood what is your experience with real estate lending? do you work with the same borrowers or you have new ones frequently? how do you do your due diligence on them?

crowdfunding websites are of concern for me... i guess i don't understand them well. here is the quote from one of the web smarts:

"Here is the problem with crowdfunding and Joe can probably better elaborate from his experience: I recently had an entitlement-add deal fall into my lap. It was a CBD, transit oriented development deal, the flavor of the month for institutional owners, so therefore the best course for our group was to package it with the impending new entitlements and sell it to a big player. 

All cash, 60 day study, boom. Well, I was approached by one of the more prolific crowdfunders and they offered what amounted to an almost 10% premium over the all cash buyer.

Moral of the story: If you're selling a deal the only way you would entertain the crowdfunders if:
1) It's a marginal deal with hair on it;
2)you have no TMV concern and you can wait for a buyer who will over pay; or
3)the capital market is frozen.

All crowdfunding sites are touting their great returns over the past 5 years...uhh duh, check your stocks over that period - are you quitting your job to sell the"

Hello everybody,

Currently I am working on a diversified passive income portfolio within my SDIRA. Besides treasuries, saving bonds I am exploring the note funds options, lending club/prosper investing, trust deed investing, private money lending. Anything.... :) I never explored crowd funding real estate sites. I am absolutely not interested in tax liens - have no time to deal with this very competitive market with my limited funds. Each category 10-20 K to invest. Looking to find for 7-10 categories with hopefully not correlating investment characteristics. 

In terms of notes - currently invested in 2nd NPN fund with PPR. Need to have more options and diversification within notes. Performing mortgage funds wound be interesting, but I am limited with amount of capital for initial investment.

Would be great to learn about as many options as possible for income investing with decent Yield.

Thank you.

I apologize if my message is more general than current subcategory.

Great info. Thank you all. I also don't see anything illegal in subject to transactions as long as they are transperant and business like. It looks like a callable bond. Thanks for elaborating on sellers risks.