All Forum Posts by: James Pearson

I completely agree about the divorce part.  She hired an attorney for the divorce and paid him a decent amount, I'm kinda shocked and upset that he didn't get him off the lease.  It is part of the divorce agreement and custody that he makes half the payments.  Which with his income he got off cheap.  He also managed to get in the agreement that he get half the house should it sell.  Again, great deal for him.  She is now going through an attorney and courts to get the child support, and we are in the process of getting him off the note and title.  It's a major process, and the private mortgage is completely for sole purpose to help that happen.  She is looking to get her payments direct from him and not made to the mortgage.  But my fear is that now with this hurting her credit, she may not be able to find conventional financing.  Thus the reason I'm asking about private lending.  It would be her alone on the title and note.  Will take a month or more.  I'm just looking for options here.  

With that said, do you think private lending, for a period of 18-24 months is an option?  

Hello all,

Well, this is quite a personal dilemma I find myself in. Me and my girlfriend are both new to REI, me as a contractor with a few potential business partners, and her a working mother taking real estate classes. We both work very hard but have had our fair share of ups and downs. The latest came when we thought we were doing everything right, so looking for some advice and help.

The short story is my girlfriend relies on child support for making ends meet.  We were looking to cut a few bills and went to trade in her suburban for something more practical and cheaper.   The credit app came back with a huge shocker.  She was behind on her mortgage.  Her x has not been making mortgage payments for the last several months.  We had been planning to fix up her home over the next year and do a cash out refi and take him off the mortgage and get him out of the picture.  Well, we all know what this does, and it really hurts our plans.  And as long as he is in the picture of owning the home, and being on the mortgage, we are really at his mercy. 

What I'm wondering is if looking for private financing would be a better use of our resources.  Instead of using our money to catch up and be in the same situation, would it not be better to use the cash we can save to help attain private financing.  Something I envision would be finding private lending to pay off the entirety of the mortgage, use what we can to put towards the cost of that make payments directly to the private lender and refi later, because with the recent payment history, there is no way her mortgage company will do a refi with her only, and a new mortgage is impossible at this point because of what has happened to her credit with this. 

Any advice is greatly appreciated.

Notes, her current mortgage is a 15 year conventional at 4.9%.  It would not be too hard to catch up, but if we went private lender route at a higher % rate for a longer term, with refi @12-18 months, I think we would be money ahead and that would get him off the mortgage as well as the title.  That to me is worth paying a premium for.  If the interest went up to 7.9 plus 1 point, the payments would still be less than current, there is equity in the home (not much) and over the next year, we will be doing some major value adding remodeling that I do myself, such as cabinetry, flooring, granite, landscaping, finish work.  It seems logical to me that this would be a good deal to us and the lender, and it's too bad most banks cant see that. 

Am I crazy or is this something possible with a private lender.

Matt, I have actually done that, and needless to say I didn't have much luck in my small town.  I'm still small potatoes, and the companies around here don't have too much time for me.  I need a free consult, mainly because I generally don't trust people prior to speaking with them.  I'm more than willing to pay a reasonable price, as well as put a CPA on a retainer if that sort of arrangement exists.  I have an appointment with a tax lady tomorrow, but she pretends to be too busy for me 99% of the time as well.  She looks for payroll customers, which I am not.   I fear that she won't be willing to work with me too much.   I'm hoping for the best, but I'm not very optimistic, and this does not help me with reclassifying my business.

First, I would find out if the home has been considered a historic landmark, the approach with that mindset.  By all means, take a contractor with you, and pay them for their time.  $100 should do the trick, but you need to schedule in advance with them.  Nothing we contractors hate more than giving free advise on these sort of things, and you will be making your offer based upon things we discuss.  If the home has been deemed historic, you are now restoring the home, and not renovating it.  Find out what is required to do this sort of work in your area and make sure the contractor you bring with you is of those qualifications and experience.  For future reference, working with the same contractor time and time again will get this service for you free of charge once a good relationship has been established.

This could also be done in 2 coats with a smart contractor that uses high quality paint.  I always say better paint and less labor is the way to go.

As a contractor, I would say the minimum would be 4000 based upon what you have said so far. Being that it's an apartment building, I would guess there are a good amount of windows, and would make the price closer to 5000, and would be a 4-5 day job with a 3 man crew.  Would definitely need more info, and no way would I give you a written quote without looking at the building first. 

I am looking for someone who can help me with changing my business classification and all that entails. Also need some immediate tax work. Prefer local to North Texas and Southern Oklahoma, but I'm open. The TAX stuff needs to be done yesterday, and I filed under the wrong type of business from jump street. I began as an LLP and want to do a C-Corp now. Any advise and or a referral is appreciated.

Hi Karen, great to see another Texan here!  Where in the great state are you??  I operate in the North Texas and Southern Oklahoma area!

I would be more worried about what effects the US will have on the US.  We are about to start paying badly for all this hyper-inflation since 2008.  Its going to be a slow painful trickle.  Fortunately for those holding, real estate may remain the most stable investment, as less and less people will be able to afford to purchase.  The interest rate has to go up at some point in time.  China's economy may actually help us get production back to pre 1970 levels and we can begin actually trading again.  Until the feds let this overaired tire go down, expect another burst.  But I still think rei will be king.  Landlords will truly be landlords again.  Just my opinion, based off Austrian Economics, the Keynesian will tell you the opposite, but you see what happened in 2008 when they thought things were still under control.  Over-inflation always gets paid for sometime.  

Great advice Robert.  Appraisals have always been somewhat of a myth to me.  A little backwards appraisal knowledge could do me wonders.  

I have never attended any sort of a REI meeting. I need to look at making time for one this fall.