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All Forum Posts by: John Cobb

John Cobb has started 5 posts and replied 13 times.

Post: Are banks really holding on to inventory?

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

There is a lot of speculation whether or not banks are holding back a large inventory of repossessed properties in order to keep prices form tumbling even lower (is there? Isn't there? your thoughts please).

If this is the case and there is an unseen inventory, when this double dip comes screaming around the corner will we see them throwing in the towel and releasing everything back onto the market?

Post: Why do banks not like holding REOs

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

They must be real confident that they will sell at the REO price.

Go back to them in two months and offer them $350 cash :-)

Post: Why do banks not like holding REOs

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6
Originally posted by OneTimeBuyer:
That may all be true, but it doesn't mean the banks are willing to negotiate. I just offered $550k on a $615k REO that's been on the market for several months and the bank didn't even counter! :roll:


Was that a 'cash on the table' offer or was it mortgaged or leveraged in any way?

Post: Virtual Wholesaling?

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

Great post Cris
Now I'm not sure if I have this right but I believe that Virtual Wholesaling is being the middle man in finding a property and matching a client without ever seeing the property or client!!

If this is the case we have been doing this for many years in the UK Back in 83 when I first started buying property in Spain I never saw the property but I did meet the UK client and send them out by plane to look at the property and they were shown around by the Spanish agent. Deal done I got the commission.

Today is much the same but everything is done by internet. I have bought many properties all over Europe and flipped them to UK buyers without ever seeing either. I still managed a full time job in publishing for 15 years and owning my own company that was not related to property for 9 years.

There are 24 hrs in a day when you are not sleeping, work. Today’s technology makes things so much easier.

I never paid thousands to a GURU, I did however have mentors, People who were willing to give me their time and knowledge for no gain other than seeing someone else come through the ranks and make a success. That is why I like this forum honest people who are willing to take that little bit of extra time out to help others.

Post: Why do banks not like holding REOs

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

So where exactly does Freddie Mac and Fannie Mae come into the picture?

Post: Why do banks not like holding REOs

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

I have just read an article by Joshua about REOs and in it his last point is

'Note that lenders and banks do not like holding REOs on the books, and try to get rid of these as quickly as possible.'

Why is this and what are the reasons behind it

Post: SELF MORTGAGE

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

Thank you both for such a quick response.

It is possible in most European countries the only problem is the RED tape here it is a killer and if anything happens were the renter is concerned it can take up to five years to get them out. Thats no joke either even if you just rent your properties it will take three to six months just to get them infront of a judge and even then you still have real fight to get them out.

Dates back to Franco and his rules that are in immense favor of the renter not the Landlord. It is still law here that if someone knocks on your door and asks for a drink of water or wants to use the toilet you can not refuse them.

Post: SELF MORTGAGE

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

If I owned a property and I wanted to sell it to someone and I gave them a mortgage out of my own funds. Is it possible to do?

Post: Everyone put in $10

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

As most of you know I am an Englishman on this forum and trying hard to catch up on all your jargon, rules and regulations so please forgive me if I have made any serious mistakes in this post and if I have please correct me.

First let me say that I think the Idea is a great one and should be investigated more and really the only person that can do this is Joshua because it will involve lawyers and will have a significant effect on Bigger Pockets so I would like to ask him if he is willing.

Next point is what is this going to be so far we have had LLC, REIT, 501(c)(3)........!!!

501(c)(3)
To my understanding after looking it up is and I quote “Section 501(c)(3) is a tax law provision granting exemption from the federal income tax to non-profit organizations. These exemptions apply to corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals.â€
Don’t see that one working myself...

REIT
This one I am very interested in but to qualify as a REIT it has to follow these basic rules
1, Be an entity that is taxable as a corporation
2, Be managed by a board of directors or trustees
3, Have shares that are fully transferable
4, Have a minimum of 100 shareholders
5, Have no more than 50 percent of its shares held by five or fewer
individuals during the last half of the taxable year
6, Invest at least 75 percent of its total assets in real estate assets
7, Derive at least 75 percent of its gross Income from rents from real
estate property or interest on mortgages on real property
8, Have no more than 20 percent of its assets consist of stocks in tax
able REIT subsidiaries
9, Pay annually at least 90 percent of its taxable Income in the form of
shareholder dividends
But the benefits are that a REIT Pays
NO CAPITAL GAINS TAX.
NO RENTAL INCOME TAX.
NO CORPORATION TAX.

The downside is that when marketing a REIT all the different state legislation about obtaining funds come into play so Lawyer bills will become a big part of the money invested. Plus to put a small private REIT together with prospectus and all could cost in the region of $50k

LLC

LLC Much the same a REIT put without the benefits

I PROPOSE A PROPERTY INVESTMENT FUND.

KEY ISSUES TO CONSIDER IN RELATION TO INCORPORATING A FUND

Target Investors
It is important to identify your target investors at an early stage as this has an impact on the possible fund structure and where to establish the fund. Certain investors will be reluctant to invest in particular jurisdictions.
It should be noted that traditionally the US market prefers to invest via the Caribbean jurisdictions such as the Cayman Islands. However, the UK and European markets tend to prefer a European jurisdiction such as the UK, Channel Islands or Luxembourg.

Taxation
One of the key objectives in relation to choosing a fund vehicle is to ensure that it is as tax efficient for investors as possible. Again, this will depend on the jurisdiction(s) in which the investors are based. However, a general objective is to ensure that the fund vehicle is tax transparent (i.e. the fund vehicle does not incur a tax charge and the investors are taxed directly on the gains or income made from their investment in the fund vehicle).

An alternative to an LP is a limited liability partnership ("LLP") which are increasingly used as vehicles for investment funds. The key difference between an LP and an LLP is that the latter has separate legal personality. In addition, whether the investors participate in the management of the LLP or not, they would still retain limited liability status. However, in a typical fund scenario it is unlikely that the investors would participate in the management of the fund vehicle in any event. As such, the limited liability status can be achieved via an LP.

A number of the offshore jurisdictions have structures similar to LP and LLP. In relation to offshore vehicles, provided that the chosen jurisdiction does not have corporation tax, the tax transparency will generally be achieved. Therefore, the Cayman Islands and the BVI are attractive options.

Regulatory Issues
In deciding which jurisdiction to incorporate the fund vehicle in it is crucial that regulatory issues are considered. The regulatory regime in which key investors are situated may have a crucial influence on the final structure.
For example, in order to fall outside of the US regulatory net, and for a fund not to be SEC regulated, which is a fairly onerous process, the fund would need to be incorporated outside of the US and the investment management services would either need to fall outside of the scope of the SEC Markets Act of 33 (i.e. to not be regulated activities which require
authorisation)

In relation to regulation, most jurisdictions will have a regime in place for marketing investment funds. Careful consideration will be needed to ensure that any marketing documentation complies with the financial promotion regime in the relevant jurisdictions.

Offshore/Onshore
As touched on above, the key drivers in assessing whether to establish a fund vehicle on or offshore are tax, regulatory and also marketability. The regulations in the offshore jurisdictions, particularly in the Caribbean, are less onerous than the US. In addition, the administration costs going forward need to be considered.
Due to the offshore jurisdictions having lower or no corporation tax charges, an offshore company, rather than an LP/LLP or unit trust may be used, which may be an attractive vehicle for investors who are more familiar with the corporate structure.
Certain offshore jurisdictions principally Guernsey, Jersey and the BVI have introduced cellular structures. In summary, the principle behind these structures is that there is a "parent company" and beneath this separate cell companies can be incorporated. Each cell can invest in different investment opportunities and an investor can choose which cells to invest in. The assets and liabilities of each cell are ring fenced and an investor who invests in one cell is not entitled to the assets of another cell. These structures are attractive when not all investors want to invest in every investment opportunity and may enable the fund to be offered to different investors at the same time as each can invest through a separate cell.

Management
In order for the investment manager to obtain fees from the fund, the usual approach is for the manager to take an annual investment management fee which is a fixed percentage. In addition, it can also have a carried interest. This can be structured in different ways, but broadly allows the manager to take a percentage of the profits if the fund is successful.

Anyway that’s my four pennies worth but please take particular notice of the last paragraph under ONSHORE/OFFSHORE that would work very well with this as for each idea that is brought to the board and passed could be put out to the investors and they could decide if they want in on that investment or not and then the profits from that are ring fenced from the other investor cells.

Oh and one other thing.

Josh Green
Excuses are for losers, Winners don't need them!

Not everyone who comes onto these forums is confident when they first start out so taking a pop like that at Mamma Mia was unnecessary and not at all helpful. Perhaps in the future you could encourage people to become more proactive instead of using a single sentence to pull them down.

Post: Investment talk explained for Newbie’s

John CobbPosted
  • Real Estate Investor
  • Valencia, Spain., Select a State
  • Posts 55
  • Votes 6

Oh well, That took the fun out of that thread

Thanks anyway Jon, Great link