All Forum Posts by: Jay Hinrichs

@Brie Schmidt 

  Brie as fate would have it I think I will be in town that one night ... would an old dude from Oregon be invited I will be staying at the Hilton out at O hare would it be a nightmare traffic wise to get to the meeting.?

@Will Barnard 

  would love to see your multi million dollar deals... I am still to conservative to do one here in PDX  we just don't have the market for it.. it drops off drastically after 1.5 and really it drops off at 750k.

I did buy a big home in 04 from Jerome Kersey the B ball player it was 10k sq feet on the Willamette river.. it was moth balled and sat stagnate for 2 years. Wells had the loan.. Kersey was out of B ball and defaulted. he owed 3.4   we bought it for 1.2 with a 5 day close. we put 1.7 into it to finish it.. and sold it first day on market to the CEO of precision Die cast for 5 mil.. that was my best one ever.. and of course being a true blooded developer and full consumer west coast dude went out and bought a 500k airplane the next day  .. LOL

@J Scott 

@Karen Margrave 

PS   the coast houses are 2000 sq feet and we should build them for 85 a foot all in

@J Scott 

@Karen Margrave 

As a follow up we don't make anything near these margins in portlandia.. one of the reasons is there in SC the all in building permits are 5 to 7k.. in our market they are 35 to 45k just for permits before you go vertical. and I know other areas are much more.

Plus the competition for lots.. So in this market is we make 25 to 40k for a 300k or less spec that's about norm.. only way to make more is you bought lots 3 years ago for half price.

I have some going on the Oregon coast that I think are going to go pretty good. We are buying the last of a subdivision form MY bank so I got a sweet heart deal. they sold them to me one at a time at the BULK price.. and they are financing them at 90% of cost.. a few years ago they would have done 100%... lot prices are 40 to 70k with sales prices at 350 to 450k.. and permits at 15k.. now its the coast so prices are more to build but here should be good margins here as well.

@Account Closed 

  in this particular case I used one of my pet lenders to fund 100% of the deal.. so I had ZERO cash in it.. I paid 12%  and only paid interest as it was drawn.. I used the float that the vendors gave me so interest was 6k or less total .. Now I have just been approved in that market for bank financing since I have some track record. and I am getting 90% loan to cost at zero points and 5.5% and of course only pay interest on funds that are drawn

so my cost of capital will be 2 to 3k per project on the next ones.

My next 6 that I am doing there are about 270 to 320 all in projects so I will have 27 to 32k cash into each one.

the one I am doing on 46 aiken and is the subject of the Southern Charm TV show is next.

COC I think we will be looking at 70 to 100k profits so 2 to 3X cash on cash in 6 to 7 months That's why J Scott and I think alike we are not keen on rentals and making money at a 100 a month clip :) I like the big pay days and once you work your self in to closing one a month or more and or at least one every two months who wants to be a landlord anyway.. But I own rentals but you get the drift this is much more fun. I sit here in Oregon and watch my GC do his magic I control all the dollars.. And as long as we are blessed with a good market all is well... I think as long as we don't get to crazy we can do 10 a year here in this market no problem.

@Karen Margrave 

  Thanks Karen

that plan is actually a Portlandia 4 square very popular here in PDX... the lot we bought had this great Oak tree in front so it was perfect fit for the home... No garage was built as it seems to be an extra there in the area. First house I ever built without a garage.

Stats

Lot 20k

permits 5k

House 1850 sq ft  @ 85 a foot   157,500

supervision   10k

sold 282 net within one week on the market

commish 15k

carrying cost  6k

msc.               5k

bonus             5k  to GC

Right at 64k net to LLC 186 days from lot purchase to house resale.

Now lots have about doubled in this market in the last 6 months I think I got the last smoking deal that was on MLS... private sales might be better but that's were its at now.

@Shawn Thom 

@Karen Margrave 

As they are completely different one is ground up and one could be tear down and rebuild

Karen can you post the U tube video on this thread that I sent you.. lets see what kind of feedback we get from the one I did on one of my new builds.  If it is well received then maybe it would be worth doing.. I know I would certainly like to see other builders projects from ground up...

@Dion DePaoli 

@Robert H. 

Dion based on the information provided I agree with you.. worse case scenario our investors is dealing with a loan that the broker did little or no due diligence on before marketing it or its was one of those late night note brokers. this loan looks like it was  sale of a derelict property to an unsuspecting Note buyer.  Of course there is not enough information to go on but its a classic set up..

Robert if you can post some relative Numbers between Mark and Dion they could give you very good opinion of your collateral and the loan in general.

1. how much did you pay for the loan

2. Did you get a title commitment before you bought it showing lien position to assure you were buying a first. And an assignment with an and or assigns mortgagee clause along with the original note and an Alonge if needed? Were you provided Insurance binder with you as named additional insured , these are just basic things you need.

3. How much was used to pay tax's and how much was given to the owner for rehab.

4. what do you feel the property is worth  either as is with no rehab  ( because the borrower very likely just ran off with your rehab funds) and what is it worth fixed up.

Now if you paid   say 40k for a 1st and gave 10k in rehab funds  and you know wholesale value to a flipper is 50 or 60k your probably OK... But if the numbers are backwards or you don't know the true condition of the home you may have a bummer here.

@Cesar Perales 

  Also when I have showed up with the owner I have already recorded the deed conveying title to me.. done all title work etc.. Its very stressful but you get the good deals from those that are in denial and wait to the last day to get it done. 

@Cesar Perales 

  depends on the state like CA within 5 days of the sale the bank does not have to agree to bring it current but will take a full payoff including all costs.

I have many times showed up at the sale with the owner of the property and the owner has the right to payoff the property with the opening bid and no others can bid.. Now that is Oregon and Washington... It creates a stir with the other bidders but you have to stand your ground usually the crier will need to call headquarters and headquarters calls the bank or servicer.. they will then postpone the sale until they hear back..

Not sure how it works in Texas but I think any owner has the right to a full payoff right up to the minute of the sale.. Now reinstating that's another matter but full payoff... you should be able today to present a cashiers check to the trustee service or attorney handling the sale and that should stop the sale  at least it would in our market.