All Forum Posts by: Doug Pretorius

I was 22. Took over the payments (and tenant) from an accidental landlord. Bought it out 18 months later for the mortgage balance and resold it for $25k net profit.

If I could do it over I would have sold it on a wrap/rent-to-own and made another $20k+!

@April A. Facebook uses an algorithm to sort what content gets shared to your friends newsfeeds, favoring popular and/or paid content. So unless you pay to have your educational material presented to your followers (yes your OWN followers!) they won't see it, or at least won't see all of it.

You would be much better off building your own mailing list. Then you have complete control over what content gets sent to your subscribers. 

Most internet marketers use FB ads to drive traffic to a landing page where they capture emails. That helps save you a lot of time populating a FB account with loads of content that no one will ever see.

 That was my thought as well. There's nothing wrong with using an agent to buy a rental that you plan on holding for the long term. The commission is not really an issue in that scenario. It's not hard to find someone with a listed property to take 10% or so below market value.

@Matthew Trotter I'm no expert copywriter so take this for what its worth...you can ditch the whole second paragraph. There's no need to give out so much personal information, and they don't care whether you plan on moving or not, it doesn't effect them at all.

You seem to be clear about the type of property you want. But I think you need to do some more thinking about the type of deal you want, and why you want to buy direct.

For example, I buy direct because the type of deals I go for leave no room to pay an agent (and the commission is definitely not coming out of my pocket!)

What are the deals I go for? Well I buy for the loan balance. So the seller needs to be in a position (financial or emotional) that all they care about is getting rid of their payment. Their loan also has to have good enough terms for it to be worth it for me to take over.

So you might want to think about those things. Do you want to buy direct so that you can buy for less than the house is worth? How much less? Do you want to do work on the house? How much? Things like that.

@Roy N. I still advocate getting the property first. People change their minds all the time so it's good to have some back ups.

I also don't vet for their ability to obtain financing. I give them enough time that anyone who's serious about getting their problems sorted out can do so. I mean honestly...it's NOT difficult or complicated to clean up your credit. You just have to live within your means and pay your debts on time. In a couple of years you're good to go. Of course some people will never do that no matter how well you screen them or try to help them. But most will.

I personally find most people are pretty savvy. I scratch my head when there's talk on this or other forums about taking advantage of tenant/buyers. Everyone I've worked with knew what the house should rent for and what it should sell for and they had already been to their bank and/or a mortgage broker to determine what they can qualify for and/or what they needed to do to.

Maybe my marketing just attracts the smart ones :)

@Rick H. made a good point about being first into the fire, I like that illustration. On the flip side don't underestimate being last. That's where I operate. I like being people's last resort, there's no competition because they've already exhausted their other options. I learned this from a real estate broker, he would take a listing and put it on the MLS, if it didn't sell and the price came down enough he'd offer it to his investor list, if they still weren't interested and the seller got really desperate, he'd take over their payments and sell it on a wrap.

I have to echo the sentiment here though, mass emailing a list of professionals is a waste of time. The only thing that really gets you anywhere in this business is making offers to owners.

@Jay Hinrichs Fair enough. And please forgive me if I got carried away in my previous post. I don't know the ins and outs of short sales or foreclosure law in the US.

Regardless of whether or not this particular deal was properly executed. It amuses me no end that all of you are painting take over payments deals like this as bad for the seller.

How--exactly--has the seller lost out?

They were on the verge of foreclosure a YEAR ago. For ~9 months their payments were made FOR them. They've enjoyed a year of good credit that they otherwise would not have had, with no effort on their part.

The only part of your arguments that I agree with is that the OP shouldn't have assigned the deal. Although that is legally a perfectly viable thing to do. It leaves a situation where there are 2 parties (the buyer and seller) who have no clue how these deals are supposed to work. The investor should remain in the middle, in communication with everyone involved, and in a position to solve any issues that come up (including refinancing the house him/herself). Like this situation with the buyer renting the place out (which he shouldn't have been allowed to do.)

I had something similar to this happen where my buyer wanted to move in with his new girlfriend. Since I was still involved and in communication with him we struck a simple deal. He helped me find a replacement buyer, and left the property in the same condition he found it, and I gave him his money back.

I understand though. I mean things CAN go bad. A situation arises, the newbie investor panics, the seller or buyer (or both) dig their heels in and what should have been an easily fixed minor inconvenience becomes a mess. But let's not get crazy. These things go wrong VERY rarely when done properly. We're talking about a 1 in 100 (at most) situation. I shudder to think of all the sellers who's credit would be ruined and all the buyers who couldn't get into a home if investors stopped doing these deals.

@Account Closed Your response seems fine to me. And her reaction has nothing to do with being at tenant/landlord court. I've been called similar names while calling FSBOs.

@Account Closed I've always used that exact technique with buyers too. If they can qualify for a mortgage they'll pay less going the bank+agent route. That's when the "Well...actually I had this hiccup with my credit awhile back" admission comes along :)