All Forum Posts by: Evan Wiesner

It's all about being respectful. as an investor I've made (literally) thousands of offers without a walkthrough, but they certainly are educated guesses. I run my numbers, use the pictures I have, and often have had someone send me additional information. I'm probably 85% sure that my number is going to work and I'll push my margins a little to make them work if accepted in order to maintain that level of respect. I'm honest, tell them that I'm here to make a deal, and I'll try to make it work anyway I can. 

Where there's been a problem is when I'm using a broker who doesn't relay that side of things and under-communicates. Then the seller is left with a bad taste in their mouth for that person and they project it on to me. So we try to be upfront and I've even gone the extra step in some markets of sending a one-sheet specifically prepared to outline this.

@Robert Matelski it's more of a model issue than anything else. fix and flip more than buy and hold. There are good pockets in any city. Give me 48 hours and I'll find them. But I also need really good local contacts. Between not having good local contacts and what I know about the pockets in my wheelhouse in cleveland, I've simply chosen to avoid it for other areas. 

@Jesse Smith that's a real bummer. It could be anything, really. It could be recorded but they transposed a digit in the document number referencing the original. If it's private money it might just never have been recorded even though it was paid off. Some small banks will forget to record releases more often than you would think and they are a pain to get to do it as well. And the worst case, if it was sold to a larger lender..... good luck.

If you need the release, put the burdon of proof on the seller. It's simple in one regard, have them go down to the title office and just say "what's it going to take to get you to issue a policy without this as an exception, given that I don't have a release?" Honestly, it's on them to prove, now or in the future, so it might as well be now and get this deal done for you.

Honestly.... no.

It's better to have a really good realtor who isn't part of the deals financially. That's just for disclosure purposes.

I'm a realtor now but for many years wasn't because I worked for companies and was buying and selling for them. Now as a realtor, I do everything up front and in the open so I disclose everything. It sways peoples opinions, even though I wish it wouldn't. It's just access to information though so if you have someone you can trust to help then that's usually a better route in my opinion.

If you're living in it then it's different. Cap ex is less of an issue because it's the same space you'll be in so it really depends on what the house needs to maximize value when you resell it.

If you do the same thing but with a duplex or triplex (you can still use FHA loans) then you want to evaluate whether you're going to do a value add on the additional units or just maintain them. If maintaining, especially on an older building, use a higher cap ex because you'll be fixing as you go. If you're remodeling, save for the remodel and do that upfront and then a lower capex because there will be fewer issues (hopefully).

Depending on the type of real estate investing you're doing then the risks change. If you're only in long term holds than follow the advice of most of these posts. Talk to an attorney first about setting up an LLC or Scorp structure that fits your goals and make sure you have a big umbrella liability policy for you personally. Then do everything above board, document it, and don't try to cut corners.

If you're flipping, it's like breathing, it's going to happen eventually if you keep at it. However, if you document everything, do it all right, be open and honest and operate with integrity, then the result will usually be just someone trying to get some money out of you. My companies I've worked for have been sued for some really petty things and usually the easy answer is to just treat them with respect and give them options to find a solution. 

If you're doing the right thing then it's nothing to be afraid of. 

The single most glaring concern for me is the loan being labeled as an exception in the policy on the 2002 loan. As a point of clarification, that was on the actual policy and not the pre-purchase title commitment? Of course things could have changed from there. 

If it truly was an exception then they didn't go for the release at that time. That's when it should have occured. There are other ways to check whether it's still alive, depending on the lender. But if no one has been making payments then it's reasonable to assume that it's a clerical error. You'll need a title examiner to really dig in and try to find out. Usually they resort to an easier risk management stance of just "nope, we're not issuing it."

Having purchased primarily at trustee sales it's amazing to me how many situations exist like this. A good title examiner will use judgment and possibly overwrite it. I'm with Patricia on this one though, don't close if you can't get that policy cleared.

It's not what you can prove, it's what you can insure.

I don't know a ton about Jacksonville, I've intentionally avoided Cleveland, and Fort Worth is getting really hard to find deals in. That being said, for appreciation reasons I would shoot for Fort worth first, Indy second, and Orlando 3rd on this list. All are hot for funds though so the pickings are slim. I LOVE Cincinnati (I feel like big funds missed on that one). It's harder to find deals but if you have a good local guy there are still deals there for sure.

Keep in mind, my experience is from flipping. I've passed on a lot of deals that would have been good cash flow had they fit the model of my previous companies. Still, I would dig into Cinci if you can. It's a real dark horse right now.

JV's are probably the fastest way to learn and avoid mistakes. That is, assuming you're partnering with someone you can trust. Vet them out first and make sure you're comfortable, outline an agreement and a waterfall for the funds, and figure out how you're going to borrow if needed. If you're on the same page with everything it's a much better option in my opinion than trying to solve all the hurdles on your own.

@Lorcan Malone It's certainly possible, but there are dangers in doing so and the perception can get you labeled as predatory by some if you're not careful. 

The idea of an owner carry is essentially that you're taking the brunt of the risk and their return is defined early in the process. If you JV with them there are legal concerns (see your attorney for a rundown) that gives them more control and takes some away from you. So they become a decision maker with money to make on the back end and they may want to protect it. If they don't get the returns you sell the deal with then the rumor mill starts and you could limit your ability to do similar deals in that area again. Basically I would be really careful if you're considering this route.