All Forum Posts by: Bob Malecki

Having to trash out the foreclosed property and put it on the market for sale.

I agree with Chris, having solid portfolio management experience is one key aspect to running a fund. Also the selection of a competent fund administrator, which is the entity that handles the accounting and distributions to the fund investors -- is also an important aspect. An experienced fund administrator should be able to advise on some of the regulatory aspects of running a fund based on which exemption the fund was filed under.

We foreclosed on a 4/2 SFR in Harper Woods MI over a year ago and the borrowers are renting it back from us. We have a lease in place and they have been paying $700/month in rent on time every month. We would like to sell this property as a rental, but knowing the behavior of the occupants, they probably won't be willing to allow interior access for review by an agent or buyer.

Any thoughts on how to place this for sale under these circumstances? 

FYI 506 club is limited to accredited industries only.

HI @Lincoln Roth technically "yes", but realistically the licensing is not actively enforced and may only become an issue if you foreclose and the borrower challenges the integrity of the loan. We foreclosed on a home in Cleveland last year and the borrower lawyered-up and they never brought up anything about a lender's license. 

Well at least the aged HUD inspection reports show what is inside and provide a clue as to how much will be needed to budget for trash out.

Hi @Jay Hinrichs no its part of the Reg D 506(b) exemption: https://www.accreditedinvestor...

I agree with @Chad U. on the deal points and condition of the property. I bought a half dozen HECMs a few years ago and resold them as REO after foreclosure or quitclaim deed. One of the caveats is that many times the interiors still have a HUGE amount of trash from the deceased borrower, especially if not heirs are around to clean up , so factor in a generous trashout budget. These loans should include an aged inspection report for the interior with winterization and those juicy photos of trash in every room. Also look for heirs to see if they are willing to QCD the property to you to mitigate foreclosur expenses, especially if you are looking to take the property and sell REO. 3 out of the six loans I purchased had the kids deed the property over.

Also, check with your servicer to see if they will board the loan. FCI does not, but Madison and a few others will. Since there are no future payments to manage, you could technically self service, but I always like to have a servicer on my side. 

Hi @Jay Hinrichs our fund is available to sophisticated as well as accredited, thanks for the mention. 

Hi @Todd Goedeke yes, that would be the Rentals LLC in my diagram, sending a management fee to my Consulting Active Income LLC which then feeds my SoloK.