All Forum Posts by: Jaxi West

@BillGulley

I had already taken my name off the investor list last year, as so many would email or call you, I figured I could just seek the people out myself.

I will spend more time on BP to learn from, that is for sure!

Good points on the course for lending.

Thanks again for all the help.

For anyone else who is reading this, there is no more need to reply with info or advice. Everyone thus far was super helpful and I am no longer doing this deal.

@DionDePaoli and @BillGulley
Thank you very much for explaining so much more! I am quite embarrased on my ignorance, I had mentioned that I was brand new to this, so you are 100% correct @DionDePaoli, that I don't know a lot of the terminology or what everything means.

At the same time, I wasn't aware I was going to need to do so. I thought this was going to be a simple loaning transaction. So the most I expected was a Note of some type. All this DoT threw me off and it was from that, that got me to come on BP to ask my question to begin with. So in a way, I am very glad it did, because you all came back with a TON of information which was sooo helpful to learn!

I learned more by everyone's response back to my first post and then yours and @BillGulley's here on my 2nd reply back, than I have learned since I got into this via MyHouseDeals.com.

Where is the course for the lender? There are hundreds of courses for wholesaling, for flipping, for renting, etc. There is 0 course out there to explain how to be a lender and know all this stuff. I joined MyHouseDeals.com and they have a variety of trainings in the membership, but again, none for being an investor/lendor. It's quite frustrating, but I am very glad you guys all took a ton of time to type all you did and teach me all this. It would be great if all you put a course together on this. Many would buy it!

A few comments on what you stated:

I'd like to clarify that he is not my friend. I met him via myhousedeals.com - I had listed myself as an investor, he called me/emailed me, as did tons of others of course. That is how myhousedeals is set up if you are a paying member. He and I have been emailing mainly.

I do believe he knows nothing about what every point on the legal document states. He just tells me they are attorney drafted when I ask questions about certain paragraphs on the documents. He has offered his real estate attorney, but I would never use his of course.

But I don't think he has a hidden agenda. He has been great to wait on me when this was supposed to be done 2 weeks ago. He was also willing to work within my shorter loan time, which was significantly shorter than the average loan term that I have heard others talk about. But I don't know, you could be right.

After everyone's 1st reply back to me, I decided I was going to hire a real estate attorney. I was going to be calling today to do that. Thank you for saving me the time and not making me look like a fool to the attorney. I was planning on having the attorney review the documents that he provided and see what needed changing, or if any of this was even good, and from there make my decision if I was going to invest with this guy. Thank you so much again @DionDePaoli

Many entrepreneurs use legalzoom.com. Those are attorney drafted documents. So I thought legaldepot.com was similar. I didn't even think to go on the website. So thank you for taking the time to do so, to let me know it's the web user who inputs the info and it's just a template. I feel quite stupid at this point. But this was an incredible education for me and a valuable learning situation. I consider myself sharp and savvy - but clearly not in this arena.

You guys took enormous time to make sure I was fully informed about why I should STOP. I can't thank you enough!!!!

I was having second thoughts on all this since everyone's 1st reply back but was going to wait to see what the attorney I would hire would say. But I am just going to forget this entire deal and email him today and let him know I am not doing this.

You are right, I am not yet prepared on all these things, @DionDePaoli. I am very glad you stated that so directly. Huge stopping point for myself to realize there is much more to learn before I invest. I thought I was prepared, because the way they describe this in general, via myhousedeals.com it sounds like it is simple. But as you pointed out, what you don't know to ask is just as important as what you do know. Thank you for providing the list of questions in the paragraph - those are the 'don't know questions' I would have never thought of, and they are all excellent of course.

If I ever do decide to do this, I will be much better prepared next time. And I absolutely will have an attorney that I hire draft the documents. I am very grateful for the extra time you gave to this @DionDePaol

@BillGulley thank you for not just agreeing with Dion DePaoli - but further explaining things your own way. Each explanation teaches me something new.

So how do you guys all know this stuff? How did so many people on BP know all this information? This can't be a trial and error learning situation for all you guys to know the exact same stuff and know so much of it. So, where do you go to learn this? Can you provide a resource? This is a huge opportunity for any of you to teach it because I would be the 1st to buy it!

A thank you doesn't seem enough, but again, thank you.
Have a super night!
Jaxi :)

@DionDePaoli
All of your info was exceptionally helpful.These are things that were actually included in the DoT or he told me / typed me back in an email.

Interestingly, you pointed out the few things I was concerned about - enough for me to come on BP to ask my question before I signed anything.

I am not a home owner myself, so a ton of this info is really very new to me - stuff about title's specifically. For some reason, I find it very complicated. I don't get why so much is tied to a title of a house, why rehabbing affects it, etc.

So I get extra concerned when I am going to sign a document that keeps referencing 'title' and the DoT stating that we will have to file for a reconveyance once the work is done to clear the title again. That language is in the DoT.

The legal document is attorney drafted but it is a standard form - from LawDepot.com The copyright shows 2002-2014. On the DoT, his company is listed as the Trustor. I am listed as the Beneficiary. And he is listed as the Trustee.

I just wanted to personally thank you for all the posts you made and provide a bit more detail. You should teach this stuff you know it so well.

Jaxi :)

Thank you so much for everyone jumping on this question so quick. This is quite cool to learn all this. All this information was very helpful and I understand both legal documents much more.

Okay, it seems the consensus is the Deed of Trust mainly. I also understand why the Promissory Note would be good to sign as well.

All you inform that the deed of trust doesn't cover money. However mine does.

I have actually read through both documents as he sent them to me filled out with the info since he knew it was my first time.

The Deed of Trust he sent me actually does detail the monies involved, the principal amount, the interest, the monthly payments, etc etc. what should happen if things don't go as planned, etc.

The only difference in terms of anything money related, is that on the Promissory note is it states what day each month I will get the monthly payments. But other than that, the language is equal on both documents in terms of money.

So maybe he was covering the Promissory Note legal aspects within the Deed of Trust?

I already asked him what would happen should something happen to him and he informed that his wife and daughters name are part of the business, he informed the payments are set up on automatic. He's been in business 9+ years.

I am in Virginia. He is in TX and that is where the property is.

Does this matter now in any of this? I am presuming no. Please correct me if I am wrong.

Also, I am moving from Virginia. Not sure what state yet, but will we need to redo these documents for them to be more up to date for where I end up living?

I had no idea Dodd-Frank could apply to me. Yes, this is my 1st one, but if this goes well, I do plan to do more. I can't thank you enough for the heads up on State lending licensing @DougSmith

@DionDePaoli thank you for spending so much time writing all these posts.

@JerryW thank you for the compliment. I legally changed my name a few years ago so I created it :)

@JustinPierce - that was why I wanted to also do the Promissory Note only - just keep it low key and simple for my first investment. But everyone's points make sense for the DoT.

I seriously can not thank you all enough!: @JScott, @NedCarey @JayHinrichs @JerryW @DionDePaoli @JustinPierce @DougSmith

You guys know your stuff!

I have no idea how - but if I can ever help any of you - just ask! Offer stands forever!

Have a fantastic new month!
Jaxi :)

Hi

Investing with a guy who needs the money to rehab a house. Not a super large amount.
Deed of Trust ties me to the house/title. I am a silent owner until the work is done and we file with the title company for a reconveyance to clear the title again.
The Promissory Note does not tie me to the house (just like lending to a friend) but it does provide a clause that covers my legal expenses should I need to take action against the guy.

I am thinking the Promissory note is better because I am concerned about being tied to the house directly in any way. Am I being too cautious on this? Like is it not that big of a deal to sign a Deed of Trust when providing money for rehab work? What do most do?

btw: I totally get and respect why the Deed of Trust is used - it ties money specifically to one house so it's cleaner record keeping/accounting and just more an organized way of doing it for the person who is asking for the money.

I don't doubt the guy - I wouldn't invest with him if I had doubts about him finishing the work or paying or anything, I just want to cover myself with the best legal document.

So which document would you go with?

Jaxi

Thank you Steve Babiak! Time is money - appreciate you doing this

Bill Gulley
This was very helpful - thank you very much! I get it so much more!!

I am glad you gave some insight on the $5 vs $500 'consideration'. I want to do this right - so that tip helped.

I am very aware RE is highly regulated, but you don't build rapport with a seller by saying curtlly: 'this is how it's done' - so i just wanted to be able to understand a lot of it enough so i could explain it in an educational way to them or a friendly way to them

I got my information regarding equitable rights via Patrick Riddle who says that is what happens once you put a house under contract for wholesaling and that is what you need in order to go find someone to cover the money for it.

I am actually not reading random threads - I am learning from people's newsletters and videos as well, from r.e. books and from myhousedeals trainings as well as Preston's Mogul Elite which I also joined. I just got on BP, so now am reading some keyword alert threads - but just started that 3 days ago.

I really appreciate you addresssing each specific question the way you did. Thank you again and for responding so quickly!

Jaxi :)

Hi guys
I completely understand how the wholesaling strategy works, but for the fact of my one hang up -putting the home 'under contract'

here are my questions to that specific:

1. what exactly does that mean - both legally (what am I then legally responsible for) and what is on that form that makes it a legally binding contract?

- all keep hearing is people say "you put the house'under contract' and then you find a buyer or investor."

-but they never tell you what that contract constitutes or why you have to have it or any of the legal ramifications of it or what if you can't find a investor/ buyer (can the seller then sue you ? ) or any of all that.

- And why would a person turn their home over to a stranger -even if only on paper - that they don't know you, and not get any money up front for such a valuable asset other than maybe the $10 earnest money?

2. Some have taught you need to have earnest money - even if only $10. But others don't mention this. If you are taking some tangible assets equitable rights, i would presume some sort of $$ exchange has to happen, even if it's $5. Am I correct? Or does it vary by state laws?

3. What is on that contract that is different from a standard home buying contract that identifies it as you being 'not a buyer of the property? Can anyone show a form - have a contract that you can specify what would be filled out, etc.

4. Why do some teach 'under contract' and others teach 'under Agreement'. What is the difference? Again, does this vary by state law?

5. Why is it so important to have someeone's equitable rights in order to go out and find money for them?

- If I had a friend and they were a homeowner and they were in a bind and needed to get out of their house, I'd just ask around to some people I know - I wouldn't think to do this entire 'under contract' process. I would just get the money and give it to them. So would that be illegal? (i really don't have this friend, etc. - just attempting to understand the weight/merit of this contract that isn't so binding it seems for the person shopping the property to others.

The other reason I want to know these things is because if I need to explain it to the motivated seller, and I don't want to give them an answer of 'because this is the way it's done'.

Thanks so much. Again, this has been the thing that is my stopping point from doing anything with wholesaling cause I don't get the purpose of this piece of paper if there is no real money changing hands, it isn't having you take on the property, you aren't guaranteeing them anything, but you can get their equitable right?

Thanks so much. Oh, and if you can explain all these things like I am a 3 year old, I would super appreciate it - eliminates the need for more questions or more clarification later on this.

Jaxi :)

hi @kelvink
I am actually considering it :)
just left there in Fall 2012.
any chance ya want to be specific about what it is I am 'missing'? Give me more incentive :):) I have kept my eye on it - but you probably have more insight doing and being there right now.

Ember Dye to address you specifically - go over to REIclub.com
he has free videos there. That is how I just learned of him. And for the few he does, picked up some points. Do that and save your money. Keep reading articles and blog posts on here and other places on the Net. it will tkae you probably just as much time as it would to go through his course but it will be more current and save you money.