All Forum Posts by: Dion DePaoli

$17,300 purchase / $3k down / 6.0% interest

If you amortize your offer over 120 months (10 years) your payment would be $159 per month. If that duration of time is too far out for your seller you may balloon the payment say at 60 months or 5 years.

Certainly an interest rate to your benefit is where you want to end up. At the above terms if you paid the loan over the 10 years with no prepayment you would have paid the $14,300 in principal and $4,751 in interest a little above $19,000 in total.

Cash buyers from a seller's stand point I think is what you are asking.

Seeking a cash buyer avoids having to deal with property issues that might not pass the mustard for a lender to lend on. Many REO's have this issue as the bank may not want to invest into the property to make it capable of getting a loan so they will seek a cash buyer only.

With financing involved you essentially need approval from two parties...the buyer and the lender.

There is no magic math. You are asking to purchase between $500k to $2.0 million worth of real estate with $60k. I hope that was a little shocking after you read it too.

I think it is awesome you have a high unit target but it may not be practical at the dollar figures you are talking about. It is going to be based on the debt provider relationship you can get. A bank, hard money lender or even another private investor willing to be more of a debt provider can offer potential solutions.

The buy and hold strategy is good but it is not clear you have thought about how to recapitalize your venture. Once you put your money into the asset via down payment, closing costs, repairs or whatever how will you cash it back out to buy your next asset?

An answer of refinance there presupposes you are purchasing properties with equity in them and you have lenders who will allow you to cash out that equity. Assume that no lender is going to let you remove all of your skin in the game, lets assume 90% would be the max loan. Remember as well, that different lenders will have different terms regarding ownership time seasoning before they will allow you to realize untapped equity as this is the same as allowing you to remove your skin from the game.

A local bank might be willing to setup a relationship with you to workout rehab loans where they finance the purchase and repair costs. That same relationship may also be inclined to work with you and allow you to cross collateralize some of your properties using the property equity to allocate new debt. Most of the time you need a little bit of a history to garner this type of relationship with a bank but perhaps your general contractor has a bank relationship he can leverage off of. (this would bee the "blanket" loan you refereed to)

Obviously a solution to the re-capital is just raise new money. Another thought might be to look for properties that you can buy and sell.

Again you have some dollars to go make deals, it only takes one to start. It may make sense to sit down with your partners/investors and think through the plan. Start small and manageable, you don't know what you don't know yet. It takes money to own real property so you need to setup a budget for each of your projects whether it is buy/hold or buy/sell. Include all costs including your debt relationship and a contingency for things you didn't plan for.

As I opened with there is no magic math that will whisk you along the path of success. Assuming you will have around a 10% equity stake in each property for your $2.0 Million you still need to make or raise another $140k plus, chase your dreams but keep them rooted in reality.

If you have a provision for late charges it doesn't hurt to state the contract language perhaps even with section reference if available. I always try to make my correspondence as lawyer like as possible. Which to me just translates into clear concise statements. Ensure reference to property, tenant and contract terms along with due as of and an additional daily fee if applicable. You may want to include both the remedies for contract breach and deadlines as well as the tenant obligations for partial and full payment situations.

For instance if they pay the rent in full but do not pay the late fees, do late fees still accrue? What happens if they do not pay the late fees.

I tend to scope out the letter as much as a stern landlord as much as a kick in the butt to the tenant to make sure they know all the rules too so we are all on the same page.

Is the property vested in the trust currently? The trust thing is really his issue, it should not really effect you provided he has a right to sell the property via the trust or him or other entity. If the principal seller in your contract is the current property owner I would say stick to your guns and go by what is in your contract, that is why you both agreed to it.

I find that real estate agents can be a bit lazy with updating some of these status. Also from a price discovery standpoint sometimes they can be valuable to quickly identify if there is a deal to be made.

What does the language in your contract say? A guide to remember is there are only two (2) principal parties on a HUD 1, the buyer and the seller. It sounds like you are on the right track depending on the language of your contract with the seller. The seller seems to want to just contract with the buyer to move you out of the way, which may result in you being perceived as a real estate agent instead of a principal.

Assigning the contract maybe the easiest way to get it done (provided you can). Again, the contract in your hand has the answer in it, read what you put in it.

One other concept real quick, if you are going to write down the principal due on the loan this has tax ramifications to your daughter. In most cases a significant amount of principal would have to be written down on a primary residence for a tax burden to take affect. (I think in most states it is around $200k) If your just lowing the interest rate or amending the term or amortization you are fine.

Very simple. The mortgage or Deed of Trust stays recorded and you do NOT have to satisfy this. Frankly doing so would cost more than it needs to.

You can modify the existing note secured by the mortgage or deed of trust with a modification agreement. Through this document you can amend the principal, interest and terms of the note. You will want to record the modification agreement once executed. You will want an attorney to look over the modification agreement to make sure you are complaint with state law. The attorney fee plus cost to record each page of the agreement is all it should cost you.

I would only go to a title company if they have a real estate attorney who will do this service. The modification agreement is a contract and as such you want an attorney to do the work not a title agent.

The township should have a building and zoning commission, which sounds like what you mention is the planning division. Depending on the size of the township, just call the courthouse and ask around. You want the department that is responsible for land division. Land division no matter how small still has to be approved by the government.

It sounds wacky, not sure why you would want this property. The land would have required approval prior to being divided up. Typically someone, usually an engineer would have to stamp the plat map with the proposed division in order for it to be approved. Which also means someone would have had to submit the plan for it to be stamped. It then becomes of record once stamped and new legal descriptions are issued and updated. Is there a separate legal description for each piece of land now?

There is obviously a relationship between all three parcels of land which you have not clearly mentioned in the story. Any mortgagee related to the parent parcel maybe looking into voiding the split. As Jon mentioned, not having ingress and egress rights on the property is a major problem.

It is possible the previous owner filed paperwork which is causing the confusion and it can be fixed. Sometimes this confusion happens regardless of a plat not being stamped and sometimes the courthouse can just be wacky too. If you obtain a title abstract on the property it would show a bit more of the history and you might be able to make heads or tails out of what has happened.