All Forum Posts by: Katharine Chartrand

@Dmitriy Fomichenko 

@Jesus R. 

Fidelity may have arrange solo 401K's for you.  I was not aware of this but, in any case, that is not what I am talking about. Fidelity does not act as a custodian for my account. 

I used mysolo401K.com (they are amazing) to setup what is really just a brokerage account owned by my solo 401K LLC. I am the custodian. I have all the cash management functionality of a Fidelity brokerage account. It's really not bad since you get a debit card and checking but I do not in fact see ACH functionality.  What you do get is the ability to setup a expedited free wire with a bank account registered to the same name.  I wire money to my bank account at a bank selected for cash management services.  I get great local banking service and and all the free online ACH transactions I care to execute from my bank account.

There are likely companies that offer a better brokerage account with respect to cash management. mysolo401K.com will set you up with any of them. But I don't actually want to choose my brokerage firm by their cash management functionality.  Choose your brokerage firm.  Make sure they have some kind of expedited free wire available to move money back and forth to a bank account. Then choose your bank.

I have a fidelity solo 401K setup by mysolo401k.com.

You get checking and debit cards to invest in real estate or what ever.  With the money you leave in fidelity, you can invest in stocks and mutual funds.  I could not be more pleased. I suspect a 401K with other brokerage firms would work fine if you have a preference for e-trade or schwab. But, IMO, nothing wrong with fidelity, and I haven't liked other brokerage firms I have tried.

@Jesus R. 

@Charles Hinson 

you are saying they are distressed therefore owner financing is off the table, i'd be interesting in understanding what you mean.

if the properties are not bank owned, then subject to strategies are the no to low money option. that is a flavor of owner financing.  

that strategy is available if the seller is motivated as in desperate.  but this is new mexico, so its a possibility.  as we say here... recovery.  what recovery?

>KNC<

@David Torres 

we need to have lunch.

@Hector Fino 

I've seen this done as real estate contract with the services of an escrow company.  

You enter into a contract with the buyer which is much like a mortgage but you are the bank.  The agreement has some additional clauses, including language that requires the buyers payments to go to an escrow account and requires the funds the buyer pays to be used to pay your mortgage.  This protects the buyer against the possibility that you stop paying on your mortgage, since your bank has a lien on his/her home.

When you sign the contract with the buyer, the buyer gets the deed to the house.  But he also signs a warrantee deeding the property back to you. That warrantee deed is held by the escrow company.  In the case that the buyer is late in his payments by X days, the contract directs the escrow company to give you the deed, effectively giving you the property back.  That protects you somewhat in the case the buyer stops making payments.  You still have to evict, which will be costly.  People who do this see low default rate, but they also vet their buyers.

This arrangement only works if the buyers payments cover your mortgage.  Since your rate is high, you have to get a high rate from the buyer.  That may work but it will lower the sales price of the home. 

And since you don't want to do this for very long, you want your real estate contract to balloon in a reasonable period.

I have an $190K investment property with a 4% mortgage with a 140K balance.

My realtor recommends selling it as owner financed.  The stock is low for owner financed properties. 

 A deal that would make sense for me would be one where i get 

some % down, ideally 20%

monthly payments that cover my mortgage costs for some period 

the buyer has the right to buy the house any time during that period for it's current market price minus whatever principle they have paid down.

but i don't want to hand over the deed to the buyer until i get paid in full.

and there needs to be some time limit, like 3 years, for them to take over the property.

Is this a standard deal and, if so, what is it called.

My realtor is calling it a wrap mortgage, but from reading the site it seems like I would deed the property to the buyer immediately with wrap mortgage.  I will not do that until they have paid for the house in full.  I am not interested in just having lien on a property I have deeded to someone else.

@Chris Adams 

can you get a heloc on an investment property?

@Paul S. 

Yes, but it is the same issue because they are investment properties. 

@Jerry W. 

I hired a private investigator to track down the person who cashed the check.  It turned out to be some poor kid on probation who was put up to it by the person who actually stole the check. The kid gave a written statement to the investigator, at the insistence of his Mom, who was furious at the Thief, who she knew, for putting the kid at risk. 

With the statement from the kid in hand, the investigator confronted the thief, they had a long come to Jesus conversation.  He signed a written confession.  

The thief admitted to stealing cash from me as well, which I suspected but was harder to prove. The thief has paid me back everything he owed me.  In exchange we provided the confession to the police for their files but declined to press charges.

The investigator cost me $1500.  That probably could have been recovered as well but thief is poor so I did not ask for that. The bank reimbursed me $800 through insurance for the forged check.  In the end I lost $700 but I got justice.  Another benefit is that everyone who works for me knows the story and knows I will not let things slide. 

I have an existing single family home that I want to mortgage, cash out and rent. 

Last year I was able to get a 4.6% 10 year balloon mortgage for this type of investment property from an online lender.  This year I am finding all avenues for borrowing against this property and cashing out are blocked or relatively expensive (like 6.75%).  6.75% would not make sense for this deal.

I am in New Mexico.  Can people let me know how people are financing rentals these days?

>KNC<