All Forum Posts by: John McNamara

Congrats on your first purchase Marion!

These use to be good deals years ago. Now, they're listing their properties close to appraised value, using high comps. At least in the Michigan market, theirs not a lot of wiggle room. If you plan on flipping them, forget it. A lot of different rules minimize any decent profit (you can only re-sell for 110% of what you purchased it at, can't flip for a certain time period, blah, blah, blah....)

I warned my buddy not to do this on an REO he was buying as an owner occupant property. He actually put in all new drywall to finish the basement before closing. The sump pump failed, drywall and basement got completely trashed, the closing never happened, and he was out big time $$$$$

They can be some of your BEST tenants. Just because they did a short sale doesn't mean they're unreliable and not responsible. Highly paid professionals and executives are dumping their homes through the short sale method. Bad things happen to good people. They've probably been banking the monthly payment they weren't making and might have some cash?? How about a month to month lease and dump them if 1 day late :-)

You're fine. Just do your due diligence on credit and criminal background check. Get as many people from "the group" on the lease so you can go after several bodies if need be. Just because he has something from three years ago (according to him ) doesn't mean he'll be a poor tenant. It's all a crap shoot in the long run :D

The bank wouldn't deal with you at all. The bank deals with whoever holds the mortgage, not the deed. It's like a subject 2 deal. If the deal ever goes down the toilet, the bank will deal with the owner of the loan, not the deed holder. I know you said the mortgage company isn't known, but like Jon said, someone owns the loan.

Cashboy:

You can definitely Quit Claim this property to your LLC or corp. This is a classic Subject 2 existing financing scenario which I've done. You're saying the mortgage is "gone" which can't be the case. I know you're going by what she said so you need to pay for a title search (couple hundred bucks) and see who has interest in the property. If you plan on taking ownership of the property, your responsible and open to anything from day one (except for the loan). The loan is still the wifes responsibility.

Run a title search, get copies from the wife of all original paperwork, then "assume" the mortgage and pay the bank each month from the tenants rental payment. Better yet, lease option the property out (assuming there might be some equity). :cool:

Don't know the specific laws in your state but I would Land Contract the house to them over a 10+ year term. It puts you in the "power position" a little more because you still hold title and you can typically get them out faster if need be. Maybe a balloon payment at the end of the term. It basically gives them 10 years to get their financing in order. You can typically ask for a higher market rate (I mean value of home) because they're paying you for the benefit of not having to get traditional financing right now. Like Jeff said, get a nice chunk of cash down, at least 10%+ minimum to make them have some skin in the game :lol:

Jon's right Sam. Remember, at $350 a month "positive", it will take you over 10 years to just get back the $46,000 you put down on the house. I remember the "good old days" of !00% investor financing through banks and other lending institutions. I got in such a bad cash flow situation one year, I actually had to go out and buy a house zero down with the sole intention of immediately refinancing and pulling cash out to cover other payments. Life sure throws some big time curve balls :cool:

Welcome to the US Michael. It sounds like you've got all your "things" in place. Having your investing "team" together is the most important thing you can do as you know. It sounds like you've got that all set. I can only speak of properties here in Michigan, but I have one main Realtor who've I used over the years who specializes in REO homes. With that said, I've only bought one house from him that HE listed. I just did most of my work by myself online through various websites and searching.

If I read your post correctly, it sounds like you're only in the US about 6+ weeks a year?? If I read that correctly, you better have a "stud" management company because those homes can come apart quickly and with you not here, that might become an issue.

Good luck, and happy / successful investing :cool: