All Forum Posts by: Joe Colasuonno

@Michael Knaus there is significant equity there for bank 3 to lose though. Thats why i was asking if they may show up to bid.

@Wayne Brooks my question was whether I had a good shot of bidding on the second mortgage's foreclosure and wiping out the third position. I am sure the second will show up to the sale or send their attorney to announce the upset price, but I am wondering if the bank in third position will show up to protect their position

@Carl Handy The 1st is the original purchase loan. Large bank, 22 year old note. Second is a HELOC from the same bank. The third is a HELOC from a different large bank.

How is previous owner hit with income tax if its not a short sale?

Joe

@Justin Brown Saw the sign outside 40 S 5th the other day and tried to google the business name to figure out what kind of business it was. Website seemed like it was down.

There is a house I am looking to purchase at a sheriff sale in NJ. The ARV of the home is approximately $700k. The property has 3 mortgages against it. It has a first from 20 years ago who's face value was originally 300k. It has an equity line in second position from 15 years ago from the same bank (lets call them Bank 1) for 100k. It has an additional equity line in third position from 12 years ago with a 300k face value (Bank 2)

The 1st and 2nd mortgages are both in the foreclosure process.  The 3rd mortgage is delinquent but the bank has not begun foreclosure proceedings.  It looks like the 2nd mortgage will go to sheriff sale first.  

Is it typical that the Bank 2 would send someone to bid at a foreclosure sale of the home to protect their position?  Is it probable that the Bank 2 has already written off this loan as a loss and will not show up to the sale?

Looking at it from Bank 2's perspective, they would probably figure that without renovation, the home is worth around 450-500k as is in a worst case scenario, and would need to spend some money to get it sold, pay cash for keys, and any other costs associated with listing the home.  Not sure if they know the upset price of both the 1st and 2nd mortgages due to Bank 1 or if they would just see the face value of both at 400k.  

I know that every situation is different, and that there are always exceptions, but wanted to hear from some investors that frequent sheriff sales to see if its common for a big national bank in third position on a property to come and bid at a foreclosure sale.

@Benjamin Ervin I have typically always reinvested my profits into more buy and hold properties, and have been able to scale up to about 400 units in 8 years.  My units are all located in the same city, but stretch across many different buildings, from single family rentals all the way to 31 unit buildings.  I have switched focus slightly in the last 12 months. There are a few reasons why I have done this.

1. Being only a buy and hold investor, the only time I have had larger chunks of cash is when I have done refinances, so a lot of time my cash supply is low and I was tired of that being the case. It is hard to accumulate cash to invest when you never sell anything and keep your debt at 60-65% of your asset value.

2. I want to transition out of my smaller, crappier, poorly built properties into better built properties in slightly better areas, and better buildings with proper parking lots, etc to attract better tenants. Doing this requires more capital than I have right now, however, in my market as is the same around the country, multifamily is currently overvalued in my opinion and in order to do this, I need to be creative (ie buying larger C class office and industrial buildings in residential zones and doing conversions to aprtments) or I need to wait for a market correction in the multifamily space which I believe is coming in the next few years.

3. Going back to my previous point, I believe a correction in multifamily is coming and I want to stockpile liquid assets in order to capitalize on this correction in the future in order to grow my multifamily portfolio with quality properties.  I already have competent employees who are used to doing renovation work as every multifamily property I have acquired has been distressed and in need of renovation, so it is easy to transition into flipping which allows me to generate cash quickly.

I know that was a little all over the place but I hope this helps explain my mindset. 

@Manolo D. My issue now is I don't use many subs.  I have about 20-25 guys on payroll at any given time, including my maintenance staff for my multifamily portfolio, and I recognize that if I want to scale any larger than doing 20-25 flips a year, I will need to rely more heavily on outside contractors.  I think my first step may be to hire an in house project manager which will free my time up a bit.  How many guys do you have in your organization now a days?

@J Scott any way for me to get a copy of the Google Talk?

@J Scott what kind of renovations do your average flips require?  I am assuming you're using subcontractors for just about everything?  What do your full time employees do?  I am trying to figure out how to scale efficiently.

I have been investing in multifamily real estate for about 8 years and have built up a decently sized portfolio of rental units large enough that it is my full time gig.  Every property we have ever purchased has been distressed (mostly or fully vacant, in need of renovation, shortsales, foreclosures, auction properties, etc), and my crew of maintenance/reno guys are accustomed to doing mostly everything to get a unit finished and rent ready.  Recently, we began to do some flips, which is not something we have ever really done before as we typically buy and hold.  In 2017, we have bought and sold 4 flips, have one under contract, have one currently listed for sale, 2 getting ready to list for sale this week, 2 more under renovation and waiting for rough inspections, and another 4 under contract to purchase by the end of November.  So far the management of all of these renovations hasn't been too terrible, and aside from the pain of having to comply to repairs following a buyer's home inspection, the sales process has not been very difficult.  I am planning ahead for 2018 and am curious to know what everyone thinks is an attainable number of flips to complete in a year.  How many have you heard of someone completing in 12 months?  How many have you all completed in a years time?