All Forum Posts by: Matt Mathews

Another View point! I just recently had a similar situation. I'm assuming by what you say: Property is zoned for 2units.and is on the City books as such? You also know that FHA has different loan requirements for purchasing Multi-Family property even though you want to live there? Since the 3rd unit isn't permitted-forget about rezoning. I've been there many times. Make your purchase based upon you living in one of the two units. Make sure, that is your intention, and follow through as such. The 3rd unit can be labeled a Granny Flat( no Stove/cooking built-ins). when you get your loan. An FHA inspector will check. In other words-It's not included as another full service unit. The bottom line is: Buy the duplex-live in one-rent the other.. The other unit and rezoning can take place later. When and If you can get the property rezoned-then move into that unit as you would like to do so now.

SoCal, specifically the Inland Empire is a gold mine for Seller Financing & L/O deals. Why? My own back yard for example; Yucaipa, Redlands area.. is comprised mostly of Pre-Post Retirees with little to no mortgages. Older seniors also have numerous properties and land that they own. They of course want to sell but with the economy and market the way it is: Their stuck!! Not to mention, they lost money in the market and those big dividend checks have virtually stopped coming in. To add insult to injury, SS checks will not be going up for at least two years. Combine that with ultra low CD interest rate and you have a perfect win-win opportunity for seller financing and/or a Lease Option. 3-5yr Option isn't hard to pitch. So, if your feed up with Short Sales and REO's-Give me a call!!

How was that Rich??

Mathews Realty Group.
Investment Property Specialist
Retirement Advisor
Eco Green Certified Agent/Broker

Ask yourself? Why do you want to buy a home? Because everyone else is or you want a place to call your own-to raise your family. A home you can afford to own?

Now! I only ask those questions because in today's market, with no credit or downpayment the only creative way to buy is to find a seller willing to carry a note or a Lease Option. The monthly rent will always be higher for a lease option because the seller is crediting you part of that payment to go towards your down payment when you exercise the option to buy. In your situation, the lease option is the most beneficial way to purchase. If you need guidance and knowledge about how to structure the Lease Option-just PM me.

Unlike Residential, you will find that Commercial Property Brokers are much more astute and educated. My Advice would be to find a Agent/Broker to represent you only. If on the other hand you feel comfortable with your own negotiating skills, then I would recommend looking for a FSBO Commercial Property. Much better deals can be had that way.

Rich,
In that your post is talking about RE as a hedge against inflation I thought that I woulld address that specific issue.

The Hedge is in the Land-not the building that sits on it. Structures on the land can be replaced and depreciated. Land however, appreciates at a level that historically has always kept pace with or exceeded Inflation. I realize we all tend to think about the whole package when talking about an inflation hedge but that is simple not true. Especially, for example, when you look at a 2bd home in Newport Bch. Ca. on a 5K lot, sitting on top of the hill overlooking the ocean selling for a reduced price of $2.5million-I can assure everyone that the Hedge against inflation has nothing to do with the home or structure that's sitting on that land.

Banks/lenders have different rules for Investors vs regular buyers. If it's a cash offer with no contingencies-I see Investors getting the property over higher bids that need outside financing. A normal Short Sale escrow is usually 30days! That's not the case with Investors-they want the cash and the property off the books as fast as you can close. Any extensions, if granted, will require a pro-rata daily fee. Big Banks/lenders non-flexible-Smaller community banks/lenders will usually work with you. Advice from a Old School Conservative Investor-Always find the buyer first before the offer!!!

If I may, I would like to add to Will's excellent topic and post. In my opinion, which I recommend to my Investor Clients as what I call the ultimate Retirement Plan for Self Employed/ Husband & wife qualify, is the Solo 401K (Roth) Unlike a self directed IRA which requires a third party custodian, you become the custodian. Truely Self Directed. The highlights of the K. plan;
You can roll money into your 401K from any and all eligible retirement plans.
You can also roll money out to a different retirement plan such as an IRA
You have the right to issue yourself and spouse a loan anytime for anything you need as long as you pay it back within five (5) years. Up to $50K ea. or 50% of acct value.
If you use the loan (s) to buy a different personal residence you have up to thirty (30) years to pay the loan back and the interest is tax deductible to yourself.
The freedom to invest in whatever you want as long as it is not prohibited under the tax code.
You have option to make voluntary contributions over and above contributions based upon only profits. which are nearly 10X higher than IRA
You are exempt from UDFI/UBTI TAX (Solo K plans are exempt)
Starting 2010-No Income Restrictions for Roth Participation/conversions.
No custodian required. A Solo K plan, allows you to serve as employee, employer, participant, administrator, and trustee.
Solo K plan also allows you to retire at age 55 with no extra 10% penalty.

As with any plan such as this you need to work with a reputable, experienced firm. Preferably one who specializes in the Solo K Plan if that's the direction you wish to go. As a Self Employed person, the Solo K plan is, in my opinion ,far superior to any other self directed plan available today.

I have to respond to a comment made about my previous statement saying; 3 yr college level course to get your RE Lic.. I wasn't referring to what you needed to know to pass the test but rather what you will learn if you study and and master the material given to you. As I look through my exam books right now, here are just a few of the topics covered in depth:
Conditions of purchase
Buyer alternatives-purchase/legal
legal aspects/securities law LLC, S;yndication, partnerships, joint ventures, TIC;s/Tenant in common ownership-security/non security Investor participation, breach of contract, buyer's liabilities, Equity purchase transactions, Lease Purchase/Lease Option contract-legal burden of proof, Boundary disputes, easements, enchroachments, Promissory notes, due-on-sale regulations, Converting nonrecourse paper into recourse paper, deficiency in recourse loans, modification of notes, errors in payoff demands, AITD/Wrap mortgages, short payoffs on recourse/nonrecourse. Tiered tax rates on profit, commingling of funds. Interest earned on delayed 1031 exchanges, Option money tax consequences. Every Contract that you could possibly want when buying and selling real estate is in this book. I could go on and on. Don't get me wrong, I'm not trying to talk anyone into getting their license and I agree if all you want to do with your license is put signs in yards and get listings-the test is easy with a few hours of study. On the other hand if you have a need to know about any of the above topics, then, that info is available to you. I can't tell how many times I have referred to this info with Investors I have worked with. Not to mention, Attorney's and CPA;s who are giving bad advice and aren't up on current Real Estate Tax Law changes and current case law rulings. Some of which, in today's market are changing daily. The bottom line is for me; Both Investors and Realtor's have created a bad name for themselves. Realtors-are used car salesman to the general public, and incompetent to Investors. Investors on the other hand are Scammer Jammers, who want to turn good stable neighborhoods into low income rental neighborhoods to the general public and users and idiots to most Realtors. Either occupation gets no respect from people inside or outside of our Industry so why don't we start working together, for a change. Finally, I just want to say that I have never found my License to be a burden when purchasing any property I so desire. As an added benefit, I have opened doors and got inside information that I would have never had access to had I not gotten my license.

Couple things I read here that needs to be addressed. First of all, if a deposit is given by the buyer, the Listing Broker keeps those monies (uncashed check) in a Broker Trust Account. The Escrow isn't opened until the Investor/Bank approves the short sale. The other thing to keep in mind is the fact that even though the seller accepted your offer-that price was determined by the listing agent/broker not the Bank/lender who owns the 1st TD note. Before a price is set and accepted by the bank, another appraisal will be required. The highest offer that comes close or at that price will get accepted. Then Escrow opens and all deposits etc will be required.

Having a Mentor is perhaps the most important person(s) you can have in this business. The information freely given here comes from successful Investors who have been there and done that and for the most part want to see others succeed. Personally, I would like to see a Bigger Pockets convention sometime in the near future. Josh! Are you listening???