All Forum Posts by: Jay Hinrichs

@Brandon Luke 

  Like to think I invented No is OK but I did not.. it was one of those lines I picked up in a sales meeting 35 years ago.. when we would all round table and brain storm on technique and what worked for what people.

And the one who taught me that approach was a retired Army officer who I worked with.

It is hands down the best line I have ever been taught or ever used..

@Account Closed 

  agree K  with that point  if your seller is in CA and there is no deficiency judgement and their credit has been trashed by the BK already.

so I correct my statement that its dangerous for a seller that still has good credit to do these deals.

@Wayne Brooks 

  I have seen it happen many times personally.... There was a group here in my market PDX.  That went to a training session on how to do sub two.. they had no real capital. but were gifted in research and closing deals.

Well they did about 30 of them.. with the strategy to build CASH flow on the delta.

they took title sub too then sold the houses to owner occ on land contracts which they recorded.  The buyers were buying with 1 to 2k down no credit blah blah blah... The delta was on a given property 200 to 300 a month .. so they got up to about 5 to 6k a month positive.  the down payments went to the people they bought the home from.

Well as anyone who has ever been around the game very long knows that low down easy credit is basically a glorified renter. 

Then the house of cards started to fall.. one by the one the new buyers defaulted.. there was not enough cash flow to pay all the underlying mortgages.. and to make matters worse the recorded land contracts in Oregon require a judicial foreclosure to extinguish.

And of course the dead beat buyer is now squatting in the house... So in this scenario just imagine what it was like to be the original seller.

You have moved on, you thought your problem was solved.  you now can't make the payment because its not coming in.. and you can't get your property back because you don't own it.  Its a mess and again why I think its a very dangerous strategy for sellers ...

this company as you might imagine got turned in to the AG and had some other legal issues.

@Tyler Mills 

  the reality is most who do sub too are doing it because they do not have any real money to speak of probably no credit and probably would not qualify if they tried to assume. I would venture to guess this is really only viable for an owner occ with good credit and job etc etc.

Its a risky move for a seller to sell their property in this manner  from many angles.

@Account Closed 

 its a small market only 6k residents in town... and no Inventory.. and a world wide buyer pool.. Of the 24 homes I built at Rand rd.. the buyers were from

Texas,,, Seattle, Australia, Beverly Hill's, Bend, Portland, Tri cities WA. , SF, LA.. etc etc. and half paid CASH... so very nice deal.

People come there for the out doors  its the wind surfing capital of the west and popular world wide.. along with skiing on Hood.. bikes Fishing boating etc.. pretty neat little area.. Not to mention the Brewery the wineries... Right up the road at Marrydale Peter Frampton and Jethro Tull are playing in a concert next month  I will be there !!

@Account Closed talked about lets say you do one of these in Texas were its common to get a deficiency judgment in the case of a foreclosure.  Seller lets someone take sub too.. this person defaults  the Seller does not have the wherewithal to cure. They thought there problem had been solved.. Bank forecloses it screws up sellers credit for ever and bank gets a deficiency judgment to boot. Investor who talked unsuspecting seller into the scenario is long gone...

Sub too is just flat dangerous to a Seller in any scenario really.. If your going to look at the risk factor for the seller.  And then all the wanna bee's that can get into title on a house for next to nothing.. its ripe for all sorts of problems..

@David McCready 

  The reality of going out of state and finding properties before they hit the market is a tough one.. there is intense competition for wholesale deals in the markets that are popular with TK providers... If you go to smaller less known markets it becomes do able. Austin is red hot the chance of someone coming form Sonoma and scooping an off market deal out from under the locals is pretty remote in my mind.

Having lived in Lake county,  one child born there the other in Ukiah.. I like that option for you. However limit your focus in my mind to Lakeport , The Riverias and Kelsyville area if your going to check it out.. Along with Hidden valley lake.. Also Upper lake could find a little gem.. do not go anywhere near the city of Clearlake lower lake Nice Lucerne the Oaks lots of lower end tenants there.. It can be done but your better tenants are in the areas I described. My family started investing in Lake co. in the early 60's... STill have fond memories

Right now you have a big heard mentality going on in a lot of the markets that west coast promoters work and get paid to refer clients to the TK operators in those states. So if you go that route just know you will be paying top dollar and a CA buy is probably a much better purchase for you..

Especially if your going to fix and flip to try and do that from out of state is pretty tough and very dangerous in my mind.. The risk reward scenario is intense.

If your dead set to go out of state.. You may want to check in with @?BrianBurke at Praxis he is located right there in Santa Rosa and has some nice funds that he professionally manage's and he has ton's of experience and success  I will wager his fund will be much safer and more profitable than you trying to do it yourself out of state.

Also look at investing with a local HML on Quality first trust deeds as opposed to trying to buy out of state.. Remember out of state in most TK markets is only about cash flow there is no real appreciation in most or any of the markets unless you buy up scale quality which is not what TK cash flow is.

@Marylynn B. 

  diversify find good quality first trust deeds.. Many investors that have gone the out of state route only to find it less than pleasurable experience will gravitate to First TD's you can find them with many reputable Brokers on the east coast and cash on cash in most cases you will do better than owning the asset and not have ANY management issues. But its critical to find the right TD's and the right brokers..   Right now there is a heard mentality going on So be sure to take with a grain of salt any recommendations on markets where the individual recommending them is also selling them that is not IMO unbiased advice or opinons.

@Michael Lyons 

  I had a 44 unit park in Vancouver.. I hired a local PM who cut me a very good deal as the park was extremely well run by the couple I bought it from that started it from scratch and owned it 25 years.. IN our neck of the woods there are special rules for park residences regarding management so it was good to have a licensed broker handling that for us.

Since I am in the development game any maintenance issue our crews handled. But a well run park is one of the best investments out there.. Just on the west coast a well run park is in such high demand the returns are pretty weak all things given.... I got lucky on this one it was off market rents were way low to market.. So with in 36 months I had my rents from 210 a space to 440 a space then sold to large MH investor on the west coast I think they own 50 plus parks... So it was a cash deal  very simple and we made a very nice hit.

@Julie O. 

  Hood River is GREAT.. I bought the Village at Rand Road subdivision a few years ago and built it out.. YOu will see the last homes just being completed.. that town is a great town each home sold before completion.. I have 3 specs going up on the South side of May right now. one pre sold.  And looking for more dirt in Hood River .. you ever come across an off market deal please let me know.

As for out of state investing just be very careful.. Its not Oregon and the management issues are real and many times do not change by changing managers.  Also in Texas you have to be cognizant of property tax's and FOUNDATION's  But you have probably been told that already... Just buy the best you can buy when you go out of state IMO.

I will be in Hood River tomorrow signing on one of  my last Rand closings..