All Forum Posts by: Johnna Lodge

I will be wholesaling a property with a tenant.

When taking over a property for sale with a tenant in it, how do you limit the co wholesalers, lookie loos and reserve for real cash buyer? 

With a tenant people cannot come and go as they please to evaluate the property. This tenant is difficult to work with plus the owner doesn't want the tenant to move or loose the income because they are suspicious. I know this one has taken a week to allow access which will kill a deal. I guess i need to write something in my contract that each time the tenant does not allow immediate access then it extends my contract that length of additional time.

I will take lots and lots of pictures.

I know i will have  a lot of co wholesalers and those that will not buy call about this property, how do you market a tenant property and limit it to the real buyer?

I am still working on my vip list of cash buyers. Any suggestions here would be greatly appreciated as well.

Thank you for your help.

For me Derek, if he does not permit someone he trusts to open the house for you and doesn't grant you access, I could not take the property. 

I have in my contract that Seller must provide keys to the property if it is vacant. If it is not vacant i require that seller provide access.

Did you mention you need to get your contractors or private funders into the property?

Since he is out of town, will he give you an extension for the amount of time he is out of town since you don't have access?

Did you take massive amounts of pictures of the property?

Were you able to get strong comps supporting your price and promote this on your advertising?

Can you show any strong edge where buyer's would go "WOW! Better jump on this one!"

either in Rehab Costs/Comps/Profit, ROI, Cash Flow

I have a short period of time to move a house and it is hard to know who the real players that will execute unless you have a strong solid buyers list. People tell you they are a buyer and then you find out they want to co-wholesale. 

If you have solid buyers in that area and they have bought from you before and trust what you say about a property, then you might be able to sell the property without that buyer going in because he trusts your knowledge and instincts. Without those things in place, you are facing an uphill battle with time running out. As Wayne said, he believes he has already sold it.

Best of Success with this one.

Let us know how it turns out! Hope you are able to make a paycheck on this one.

It is better to use people in your community if you can..

In regards to financing with hard money lenders, most hard money lenders do require "skin in the game" ..(money at the time of closing in order to close on the project)..they like to know you are vested in the project. Usually they will charge you for an appraisal, closing costs, lenders insurance as well and some other fees possibly...

of course hard money loans are based on a loan to value ratio that a hard money lender feels comfortable with..some are 65% to 70% Loan to Value (LTV).

the person that i spoke with never asked anything about LTV.

A lender has to look at each loan as if they would have a defaulted note. By looking at it this way it helps them determine if it would be a property they would loan at and also experience level of the investor.They usually do not want the properties back but if it goes bust they want to make sure they are protected.

well as @Gary Shaw so aptly said..Quack! Quack! looks, smells, acts and sounds like a duck..move on..

I wanted to put this out so others that who were not as experienced would see how this could easily (and more than likely) be a scam to get money and disappear..come on a google voice number, really?

Hi Gary,

You could post of craigslist that you are buying upside properties and do another add for short sales..these sellers are these type of sellers you need. Just make sure to make several different posts addressing distressed sellers.

you can also get a foreclosure report and direct mail to these sellers and/or door knock.

you used to buy distressed leads but i think there has been a lot of changes in regards to disclosure and marketing.

You are most welcome! Glad i could help!!!

I have been active on the internet lately promoting some properties.

I received an email asking if i needed use of funds and for what for from a direct internet connection.

I responded with:

Transactional funding use of funds for 24 hours or maybe up to 3 days max

Rehab funding acquisition to disposition 6 months use max

Long term hold funding acquisition, rehab and paying back the loan with funding from tenant funding 10 years if acceptable.

Odd things:

1) Speaks broken English with complete American Name (Sounds Asian)

2) Uses a google voice number

3) Asks if i am married

4) Calling me several times asking me the same questions that i had already answered.

5) Gave terms but never said anything about approximate value of property that he would loan on ie 65% LTV 70% LTV

Terms:

10% down and 5% Interest from $50K to 1M send a copy of my license. And i would need to sign a guarantee document that his CA attorney will provide.  i requested this form

I looked on google to find this person but could not tell if this was the right person on the internet.

I am going to ask for direct phone number.

If it is a scam an naive person would send the 10% expecting to get the remainder funding but it never comes.

I am thinking that this looks like a duck and sounds like a duck..

Any suggestions?

Thanks,

Johnna

That down payment money is non refundable..

$10K or 20% in non-refundable

Hi John,

I know how i am responding is not your question. I just want you to be safe and make a good investment for you.

I understand some of what you are doing but i have some thoughts in regards to this. Maybe you will find them helpful.

Think of what could go wrong for a minute. I just want you to understand some of things that can happen.

The debt will be in your name correct?

Are you doing a wrap mortgage on this property you are purchasing for this perspective buyer?

You can do a lease option if you decide to pursue this. His credit is VERY bad..no one will loan to him for a reason..is this reason good enough or explainable for you to take a risk for him defaulting on the loan or filing bankruptcy on you? 

On owner financing, I prefer 20% down. Is he putting 20% down?

If he defaults you will need to foreclose on him. What are your state laws in regards to foreclosure? how much does it cost to foreclose? What are the time lines? Is there a rescission in your state? you need to know this if you are going to do this. If it takes you a long time to foreclose, you still have a mortgage on this property that needs to be paid. You will be loosing money each month until this person is evicted by the sheriff (which is another cost) then rehab and market to find a new tenant.

I have worked with many bad credit people. Very few work to make the change in their credit. they mess up my house and then move to a nicer cleaner house later.

I would make him work to have good credit. The $10K is good faith that he will perform on your note with him? Lease option would be the way to go if you pursued this at $10K.

If you want to do it the way you want to do it, I think it would be better to find a property that is being wholesaled and not one that is at retail value. If you need to sell that property quick you would have equity from a wholesale deal but at retail you are stuck.

He needs to put 20% down for owner financing

Credit is VERY Bad..when credit bad they pay for it in down payment and Interest: 5%

Protect yourself. You value your credit. Provide a win/win for yourself with safe exist strategies for you when he does not perform.

Subgroup leaders of REIA's are looking for good speakers. Contact your local reia's and speak to the subgroup leaders and ask them what they want more information on from an attorney. There could be a lot of great subjects you could discuss or teach:

subject to contracts..not all attorneys understand or do subject to's

how to save money on your closing: common mistakes on a hud that can cost you Hundreds of Dollars

What is a good Option Contract: Buyer and Seller Option Contracts. go over the option contracts and give them a copy of the contracts specific to your state

How to Buy Foreclosures at the Court House Steps Safely (ie speaking in ref to liens)

Just ask the REIA President's and subgroup leaders. They want valuable participants teaching their members.