All Forum Posts by: Jeff Rappaport

@Darren Shanks, you have many groups to choose from. The different REIA groups and all of their luncheons (luncheons are free) - UtahReia, SLREIA and UTValley REIA are all solid choices. Beyone REIA groups there are a variety of Meetups you can attend also - Wholesale Meetup (Meets on second TH of the month), BP Meetup (we call it Utah Investor Meetup) and countless others. If you want more info pm me and I would be happy to steer you in the right direction.

Is your business where you want it to be?  Are you brand new looking for direction? Want to take your business to the next level?  The quickest and most efficient way to get there is through networking with other investors, attorneys, title companies, lenders, buyers and sellers.  Join us for our Utah Investor Meetup that promotes networking.  Create relationships that will help you get to where you want to be!  The meeting is free!  Investors of all experience are welcome!  This Thursday, June 2nd at The Huddle (2400 E. Ft Union Blvd) in Cottonwood Heights.  Meeting starts at 6:30 pm and goes until everyone is done or the place closes!

@Mahonri Bussey your dilemma is what most new investors face.  Where does the money come from?  Rather than saving every last cent for the next 5 or so years I would recommend learning more about the creative side of real estate.  You want to be the one finding the deals so you can create the financing.  Many people like to refer to them as Wholesalers.  I don't think of myself as a wholesaler.  I am a deal maker!  I find the deals, structure the deals and sell the deals (the ones I don't want to keep for myself).  

As far as owner financing goes, I have structured three owner financing deals in the last 30 days right here in SL, Davis and Weber Counties.  I have several I am currently working on in Utah County.   However, that is not what you want right now.  You want to find the deals and either start getting paid or so you can structure the deal with little to no money out of your pocket and you can either take over existing debt or create financing through the seller.  This stuff actually works!  Spend some time working on your education through classes, podcasts, Meetups, mentors, or whatever it takes.  There is a ton of free info online.  Go to Youtube and search for whatever interests you. 

The world of real estate investing is not easy!  If you really want this figure out a way to make it work.  I promise you that not every successful investor out there started with a boat load of cash!  Including me!

If you would like to chat more PM me!

@Account Closed, Here are a couple of suggestions.  First, you need about 20 handwritten Lease to own, No bank qualifying, easy terms etc. bandit signs all around the house with arrows leading back to the property.  Go back every day and replace the signs that come up missing.  I have found this to be the best strategy for finding a tenant/buyer.  I would put two or three signs in the yard and at least one that says I buy houses.  

Second, I would continue to place ads every few days.  Change the message up a little.  

Third, I would talk to some mortgage brokers and see if they have had to turn any potential buyers away because they could not qualify for a loan.  See if any of their turn downs would fit for your property.  Tell them they can do the loan for the buyer in two years. 

The last bit of advice I would give is that you are probably asking too much for your option deposit.  Even though $5,000 is not a lot for an option deposit it is about 7% down and tenant/buyers in that price range of a house don't typically have a lot of money.  I did a $100K house in Idaho and it took me almost 3 months to find someone with $4K.  I did a house for $367K and got $12K down in two days in Utah.  I would suggest doing lease options in nicer neighborhoods with a price of at least $200K.  Those tenant/buyers tend to have more disposable income that can be used for option deposits.  You may need to ask what they have toward an option deposit rather than advertise the down payment or tell them directly on the phone.  You may also consider taking some down payment and some kind of trade or note.  My experience over the years tells me that you will have a difficult time trying to get $5k on a $72K house.  

@Chris Weaver, to truly answer your question we need more information from you.  What are you trying to accomlish with owner financing?  Are you using it to buy and hold?  Wholesale?  How much money are you or your buyers willing to put down?  My experience is that any seller that is offering owner financing is probably asking for a big down payment.  When you approach an off market seller and offer owner financing I try to keep the down payment low and get the seller what he/she needs.  The best part of owner financing is that the price is almost irrelevant.  I can offer way over market value but the rest of the terms need to be what I want.  

In my opinion, figure out what you are trying to accomplish and find the property.   Make the seller multiple options and let the seller tell you which one will work best for them.  Once they give you some direction negotiate based on what you want and what would best suit their needs.  Once you find that common ground you will have yourself an owner finance deal!

@Maria Vogel, I just closed an owner financing deal yesterday.  As far as the paperwork goes, I write up the purchase and sale agreement outlining all of the terms the seller and I have agreed to.  I then take it to my title company (the owner of the title company is an attorney) and have them construct the instrument that we are using and the note.  The cost becomes part of the closing costs.  I can tell you the purchase of the property was about $315K and the closing costs to the seller were about $2,100 (including an owner's title policy for the buyer) and the buyer's closing costs were about $450.  The costs will certainly vary by state and company but I would try to create a relationship with the attorney or title company and let them know you will bring them future business.  

@Mark Allen that is a great question!  Yes, I make it very clear in both the purchase and sale agreement and when I am talking with the seller.  As far as Bill's comments we certainly don't agree!  I have been in real estate for 16 years and have done 100's of deals.  I have a vast education in real estate and consult many (I said many) attorneys with how I conduct business.  There is nothing shady, illegal or unethical that goes on in my business! Ever!  If you don't trust what I say consult with a real estate attorney in your area.  Actually, you should consult with an attorney!  The one thing Bill and I do agree on is that you certainly cannot rely on eveything that is posted on BP.  

@Shawn Crawley Here is an example.  I offered the seller $9,500 down on a $400,000 purchase price with a 1.8% interest rate for a three year term.  The payments were $1,800 a month principle and interest.  The property is worth about $390K.  I then raised the price to $420,000 and asked $30,000 down and passed on the rest of the terms to my buyer.  At closing the seller gets her $9,500 (in this case I gave her $10K) and the $20K goes to me.  I wholesaled the owner financing to an owner occupant.  I am no longer in the deal.  I also did not violate any of the Dodd Frank rules since I am not offering owner financing to an owner occupant.  The seller is financing the owner occupant.  I am in the deal and then out of the deal!  

I could have stayed in the middle of this deal since the down payment was low and I would get the benefit of the rapid pay down of the principle balance.  I could have bought the property and lease to own to an owner occupant.  I could have gotten about $12k up front from my buyer on a price of $410,000.  That would have covered my down payment and left me $2,500 upfront.  I could have charged about $2200-$2,300 a month in rent.  A small cash flow of maybe $100-$200 per month.  The big payday would be at the end of 2-3 years.  I think my balloon payment at the end of three years would have been around $345K.  My buyer would still owe me about $398K.  If my buyer cashed me out in year 3 I make $53K.  

I decided to pass on the good terms to someone else and just take my assignment fee of $20K and move on.  Here is the best part of the whole deal (other than the $20K).  The house is only worth about $380K.  The seller was asking $400K but was not going to get it.  I was able to offer her above market value price in exchange for my terms.  As you can see, it worked out pretty well!

@Shawn Crawley, these are my favorite deals right now.  It is quite simple!  Think about your exit strategy.  Who will be my potential buyers for this property?  Will it be another investor to buy and hold?  Fix and flip?  Will it be an owner occupant?  Once you identify what the potential exit strategy is structure terms that will solve the seller's problems but would be attractive to your end buyer.  For example, maybe you offer a really good price (full market value) but the payments, interest and down payment are low and the term is longer.  Price is really the least important aspect of owner financing.  We can offer considerably more than what the property is even worth as long as we get our terms.  

Once you structure something you now make sure your contract is assignable.  Now go find yourself an investor or owner occupant that would like a property with owner financing.  The same way you would with a cash transaction.  Make sure you find a title company that can put together the owner financing paperwork for the buyer and seller.  All you need to do is get an assignment of contract to your buyer and add the fee you are getting to the purchase price and the down payment.  

Hope that helps!

@Chris Music, pm me so we can chat.  I have some ideas that would get us both paid if you are interested.  Thanks!