All Forum Posts by: Jacob Beg

@Bill Brandt I think I am about to learn a whole lot more about chimneys:) Thanks for the suggestion. I am going to call around and query whether there is a way to get gas insert. Or I might just rent the place and disclose to renter that the fireplace cannot be used and is only for decorative purposes since there is HVAC inside the house.

Full disclosure! I never had to repair a chimney before and my knowledge in this regard is quite limited. I have purchase a property where the seller disclosed " Chimney Flu Sleeve is Cracked". I looked it up online and it appeared that the average repairs should not exceed 1K.

My experience of dealing with chimney contractors is eye opening here in Baltimore. Here is the recent quote I received and it seems extortionate. I had another quote for 6K but the contractor gave a pretty poor vibe, would not provide an estimate or scope of work without a $2K deposit. 

"To have the chimney brought back up to code you are looking at $8,305.00. This includes repoiting the bad mortar joints on the outside of the chimney from the roofline up to the top. A new chimney crown on the top of the chimney along with a new piece of tarracotta flue tile to replace the damaged one. A new stainless steel cap on the new tarracotta flue tile. This also includes a new 11" stainless steel chimney liner in the fireplace dude to the cracked flue tile. The liner comes with a top plate and cap to protect the fireplace flue. This also includes grinding out and repointing all of the bad joints inside the firebox of the fireplace as they are cracked up pretty good. We would also remove the smoke pipe from the furnace and the water heater and repace them with all new 26 gauge pipe and install a tapered tee to connect them properly to the chimney."

What is a fair and reasonable price and is there any other suggestions?

@Daniel Hennek  Thanks, that's helpful. Attempting to negotiate a non-recourse to avoid the personal obligation. I'll have a read of the guidelines. 

@Daniel Hennek I am refi maxing four with a commercial lender under a separate entity ( not personal name). Yes, they are financed but through a commercial entity vs my own name. Are you suggesting that it makes no difference even if the ownership of four properties is under a LLC and six under my personal name and all are financed, then I am excluded?

Hi All,

Having reached the 10 property limit for FNMA loans, if I refinance four of those properties with a commercial lender taking title under under a newly formed LLC, am I still able to use the positive cashflow of these properties as qualifying income, that is, if I go buy additional four under the conventional underwriting? Having removed them from my person name but still personally guaranteed by myself, could I buy 4 additional properties under FNMA investment property product?

Although these properties appeared on Sch E for well over 3 years, the newly formed LLC will lack the requisite two year history. I am dependent on the positive cashflow from those properties to meet the FNMA DTI guidelines and have been able to use it while they are under my personal name.

Thanks in advance.

Hi All-

What is your criteria to screen project managers to oversee flips? Do you look for someone who has industry experience or background in construction to ensure that contractors are delivering what is promised. What sort of compensation agreement is fair or industry practice? Do you have any other suggestions in dealing with the project manager and is it worth having one to begin with?

Thanks!

@Charlie MacPherson Wholesalers are generally untrustworthy and I totally agree that they should be held to the same standards as agents. However, they remain a source for off market deals and sometimes quite attractive ones. You just can’t take anything they say at face value. I have to give them some credit for their ability yo persuade a seller to agree to an assignable contract in a robust market. Typically, they target the elderly or what I would consider a vulnerable group to part with their equity (not always). 

@Mike Dymski- In this transaction WS is hardly a business partner. WS only objective is to maximize their own gains. The standalone nature of the transaction means that each party must gain at the other’s expense. This business model is created by the wholesaler  community in my view. Never mind If you’ve bought ten houses from a particular wholesaler and a cash buyer, if he can get and additional 2k elsewhere he will take it. 

I like to share my friend's (F) recent transaction. He was a professional negotiator/arbitrator for some time before jumping in RE. 

He offered 210K cash for a property to a large wholesaler (WS) who was advertising it for 225K. WS emailed promptly to call him within the hour or someone else may take the deal. F deliberately emails to say he is dealing with an emergency but will call before noon (a few hours later). 

F calls and WS claims she need 220 to accept the offer and if he can revise the offer, F stays firm and the call ends quickly presumably the deal was secured with someone else. A week later, WS calls back congratulating F since the "other buyer" could not close. 

F thanks for the call, and politely confirms that he has moved on but is willing to pay 200K as his interest has dwindled. WS clearly pissed off, claims they have a huge list (which they probably do) and will sell it no time and was doing F a favor and allowing him the opportunity. F stays firm and the call ends on not so positive note due to WS's feeling that she is being cheated. 

WS calls 10 days later stating that since he is able to pay cash they reconsidered and willing to accept 200K. F being a trooper he is, offers 185K because he really would be buying for his non-existing son so he can get some experience. WS, if she could, would choke F with he bare hands. After much wrangling, F relents at 188K and a deal was struck. 

You must be prepared to walk away from the deal.

@Paul Defngin Thanks for the input. An actual copy of the deed/deed of trust was pulled and it reflects two names, one of which is identical to his. We have tried the internal reports but all of this is coming down to two things: His name being the same and the foreclosed property being in the same county. Lost for ideas!

The underwriter has commented to the LO that since my cousin does not have a common Anglo-Saxon name like "John Smith", the underwriter is unwilling to accept the explanation of two people bearing the same name in the same county. My cousin has tried explaining that his name is a common Asian name but the underwriter's unfamiliarity with names of other backgrounds appear to be a hurdle here. 

This is a scam. This particular has been issued on many other investing forums on FB. This person targets those looking for funding and promises rate and terms that do not exist or are too good to be true. If you are determined to deal with the person you can test the waters by demanding that all moneys will be held in escrow with your attorney until funding. This should provide some protection, of course, you could lose the appraisal money if you paid him directly and he disappears afterwards. May be pay through your credit card to have some consumer protections in case if you are defrauded. 

Good Luck