All Forum Posts by: Jason S.

What is specified in your contract with regard to extra work - etc?
Is this individual a licensed contractor?

Did you actually ask the worker to do things extra? Maybe you thought they were included but still you directed someone to do it? I have found a lot of investors do not fully appreciate all of the "extras" that they feel are included in a rock bottom bid. Maybe this does not apply to you, but make certain you are "in the right".

Then that is how I would do it.

The thing is that it does not matter what your intent was if the Grand Jury / Prosecutor sees it differently. That is my point. Never do anything that could possibly be misunderstood.

People make a plan that is great, but if it can be looked upon as breaking the rules, then you should assume it will be. That is how you protect yourself.

I assume also that those in the Fund, the subscribers, are aware of the dilution of their earnings due to additional participation of the principals? It could be interpreted that the principals are looking to make more money than allocated to them by the fund.

In the end. I really do not know. I have been involved with several funds and even have co-written them with a partner that used to teach how to create syndication's and funds on the college level.

What I do know is that you need to be very careful on every single little issue or you are creating an unnecessary long term liability where, should anyone complain, or heaven forbid not be satisfied with the return and put your fund under a microscope - how will it look to them?

Always act with the worst case in mind when dealing with the SEC & other people's money. Reduce liability & risk to zero whenever possible

Bryan,

I looked at the picture and it frightens me more than what I read. There is a direct link, a direct methodology to circumvent the rules. That is trouble. Do yourself a favor, ask a Federal white collar criminal defense attorney. Yes, criminal. Because that is the likely violation, criminal first with civil following. Your regular attorney can tell you what they want, but the criminal attorney will tell you what the Grand Jury/Prosecutor will see in your plan. Organized conspiracy to circumvent blah blah blah.

Maybe I am completely wrong. But I know a guy who was running a $100MM fund prior to the bust - let me tell you , they went through his fund and every aspect with a fine tooth comb - and this is not just because of lost money, they were trying to take the fund away from him and control it.

There are so many ways you can get into trouble.

Of course, this is all my opinion. But it looks scary. Find a Federal Criminal Defense Attorney that specializes in this type of crime and ask them what they see. It may cost you $400 for 30 minutes, but it is likely worth it.

Once again, this is my opinion. I may be 100% wrong. But I would ask my regular attorney and then the criminal attorney first - and you know what they say......

If you have to ask. You probably should not do it.

Looks like Vegas, in blue, has even fallen more than the average for the US. Could reflect an underlying lack of demand as reflected in an earlier post with regard to Casino's sprouting up everywhere.

I would want to understand the extraneous factors before investing.

What is the job outlook?
What is the projected demographic?
etc. etc. etc.

In other words, what will be driving my long term tenancy? Where will they work? Who are they?

Be very careful. It is this type of circumvention that is frowned upon by regulators. You never want to be caught "structuring" - that is bad and you will be looking over your shoulder forever wondering when a Grand Jury is thinking of looking into your practices. There is simply too much money already available to put your organization at risk. IMHO.

I did read recently that there are some in Govt considering for relaxing some of the current rules.

OK Shane.

The key to walking a neighborhood is knowing and observing what is happening. It is not enough to know what is for sale unless you know how much it was for sale, how long it was listed, the condition, the terms of sale (short, REO, normal), and the closing price of that home. You should be able to walk your neighborhood and be able to point out, that home sold for $X but it was in bad condition, that home sold for $Y because some investor bought it 6 months ago for $W and rehabbed it, that home over there was OK condition but could not go FHA due to no appliances and was bought by an investor who has yet to stop by, etc.

You get the idea? You also need to know the sq ft of these homes, lot size, etc. This way you become an expert in the neighborhood. Now you know what homes sell for in your area. How much they sell for in different levels of condition.

This is a process you will be repeating every time you buy a home in any neighborhood. In fact every time I buy a fix/flip. I will have researched all of the above and a lot more info before even buying it. I know everything that has moved in that area, the price, the condition, the Realtors, etc. Everything before dropping one dime on a home/deal.

Does that make sense? This is where you start.

If you want me to discuss more - let me know and I will continue. If you have questions, let me know also.

No they will not.

Just buy, market to non-fha & go FHA if/when hit the time. If you need cash in the meantime take out some of it in a HML or go in with a HML.

Just make certain the complex is approved for FHA - just in case.

There are some more creative options going in if you are dead set on selling quick. But, well, is it necessary? Just work it as a straight deal and enjoy it - cash out with HML if need the cash.

Incredibly competitive. Its LA. There's an incredible amount of wealth represented.

1. Buy it. Shop for a lender that will allow the FHA with 2 appraisals. Sell it.

or

2. Buy it. Make the re-hab look substantial cosmetically. Sell it.

or

3. Buy it. Put on market for non-fha. If takes 90 days then sell FHA.

If you have not done so already make certain the Condo is FHA lendable, not all are.

From the discussion above it appears from this list

http://www.fdic.gov/bank/individual/failed/banklist.html

That the FDIC is not merging many of these into the large institutions.

I have also been reading lately that the Government has an overall plan to unwind and break apart the too big to fail institutions but that entire process is going to take years due to the complexity of unraveling the securtized portfolio, desecuritizing the MBS', etc . It's all on the table and being discussed. So there is a plan so that there will not be too big to fail institutions in the next crash.