All Forum Posts by: Justin Smith

I always try to build rapport.  A few of these people have told me their life story.  But, what I'm getting from you all seems to be that my mistake is not actually going to see the property.  

Going to see each property that I've made an offer to would be impossible in my situation.  So, maybe I'll go see the ones that seem the most motivated.  Thank you

I've sent out 2 months of direct mail to absentee owners with parameters such as >50% equity >2bdrms, etc.   I've sent out 2250 letters and post cards and gotten 57 responses.  That's a 2.5% response rate.  

I have patlive screening my calls, and every caller that didn't just tell me to go F myself, I called back and made a verbal offer to based on the numbers I was told to use here at BP in addition to some of my own assumptions.

I make cash offers by a CMA to get ARV. I multiply that value by 0.7. I then subtract an assumed $20K for repairs (paint, carpet, seller's lies about repair costs, landscaping, etc.). Then, I subtract my fee, which has been $5K every time, because anything more, in most cases, would be completely ridiculous from the seller's perspective (as if a 50% of market value offer wasn't ridiculous enough to them already), and anything less would make it hard to recoup my marketing dollars spent. For those that are calling me that have 100% equity, I'm offering a seller financing deal for them, which is usually 80% of market value minus a few thousand at 6% interest secured by a mortgage with a balloon at a minimum of 7 years. A good bit of the calls have had 100% equity.

I've made roughly 45 offers to absentee owners and haven't gotten one yes.  

What am I doing wrong?  What could I be doing wrong?  I plan on sticking with this thing and spending the marketing dollars for at least 6 months, but I'd at least like to make at least one deal.  2 months in, and not one.  And I was hoping to get at least 2 a month on this budget.  What's going on? 

I'd raise the rent to market value, and if he leaves, so be it.  But, if he's staying and paying long term, then you don't have to worry about fixing up the place in between short term tenants.  I'd just find a way to deal with the smell.

@Brian Gibbons

If the seller transfers property into a land trust, makes you the trustee, and then transfers their beneficiary interest to you, are there any issues that could come up when you try to get the insurance in your name and take the seller's name off the insurance?  And how would you go about paying the taxes?  And, what additional steps do you have to take to pay the lender directly?

Giving someone an option to purchase also gives the lender the right to accelerate the loan.  I'm not sure how the lender would be alerted to the fact that the seller gave you an option to purchase, though; even if the option was recorded.

I'm trying to learn more about this too, and I'm following the same line of thinking as you.  From my limited understanding, if I'm saying this right, if you set up the property in a land trust, with you as the trustee, I think you might be able to get the insurance out of the seller's name and into your name.  It's probably the same with the taxes.

The acceleration clause doesn't apply to transfers within a land trust, as long as the mortgagor remains the beneficiary.  But, if they transfer their beneficiary rights to you, how would the lender know since land trusts conceal the identity of the beneficiary?

I'm having trouble finding an attorney that will do "subject to" transactions.

I'm looking for an investor friendly attorney in Greenville, SC.  Particularly, one that can close subject to transactions.  Does anyone have any recommendations?  

@Jason Dillard

This is off topic, but I'm in Greenville, SC and having trouble finding an investor friendly real estate attorney, particularly one that will help with "subject to" transactions.  Do you have any recommendations? 

@George P. What really worries me about subject to deals is when I have to get insurance in my name and the previous owner cancels his/her policy.  That seems like the perfect time for the lender to start asking questions.  It seems if we could just say, "we want to get insurance in the trustees name", that would keep them from looking into it any further and start thinking about the acceleration clause.  That's what I think anyway.  I don't know.

Still wondering how the land trust would even be set up.  Maybe @Bill Gulley or @Brian Gibbons could help me here.  They seem to know a lot about these types of transactions.

@George P.

So, if they do call the loan do,  does the land trust completely prevent the lender from knowing that there was a change in ownership other than if the ask for proof of ownership?