All Forum Posts by: Malhar B.

@Andrew Cordle I'm in.  Johnna put my name in along with Danielle & Meghna.  I'd love to attend and we are definitely in.  Thanks!

This is a great forum. I am on this from time to time and would love to interact on it more often if I could access it more easily. I constantly see FB posts, emails, etc. From Biggerpockets, but most often its over the phone. Although I agree, that it's important to take time out to contribute when I'm on the computer, I've associated my computer with mostly work (although R/E investing is all I do, because I invest heavily out of state, I'm usually working on REI when I'm on the computer). Other times I'm meeting someone, at a project or looking at a local property, etc. So, by the time I take a break, I want to walk away from the computer. I love REI, and social media is a huge part of It, but I usually interact via my phone (until I get a tablet pc). With that said, iI'd love to see a BP mobile app.. tablet apps, maybe, in the future, as well. I read somewhere that about 20% of all web browsing happens on phones nowadays... in fact, I'm writing this on my phone right now and it definitely is a lot more difficult than interacting with the site on a computer.

Oops, yes sorry. I'm incorrect. I always think about it as Grantor vs. Grantee (Seller vs. Buyer... goes to show you what I know about notes :)... got any pointers?

I read through a bunch of posts about non-performing notes and I haven't really been able to find the answer I'm looking for. If I could get some help on this I'd appreciate it.

I work mostly with REO property, but a seemingly lucrative note came to me recently. I have the opportunity to purchase a note for about $400-450K on a property that has an ARV of over $2MM fixed up. The original mortgage amount (note amount) is $1MM. The issue is that the Deed is not held by the mortgagee. The note is a first position note and the foreclosure process has been started already. Is it possible to foreclose on the property and still take it even if the owner on title is different than the mortgagee? What should I be careful of? How should I be going about the due diligence?

My intention is to purchase the note and work out a deed-in-lieu (which I don't think is possible because the mortgagee doesn't have the deed to the property) or wait until Sheriff's sale, take possession of the property, fix it up and resell it. The property has already been boarded up by the note holder and the tenants no longer live there. I've been told that the property owner was collecting rents and not paying the mortgage. Any advice/words of caution? Thank you in advance.

I started out very similar to you, Hal. "Newbie", "Out of State", etc. One thing I learned real quickly is NEVER to rely on what someone says to you or tells you. I live in the NYC metro area and prices here are really high, similar to those in California, etc. As a result, out of state made sense for me too.

However, I went out and visited every market that I currently invest in--I probably visited them at least 2-3 times, built a team of professionals--inspectors, contractors, property managers, realtors, etc.--people that I could rely on. Then, I set up a system of checks and balances that one team member could verify another's work when I sent them to a project.

Per Jon's comment, $3K on a rehab seems very low, especially for a 2 unit. My magic number is 3. Always get 3 bids from 3 different contractors at a minimum per project. Have three people go out to the property before my inspection period ends (usually it ends up being 5 or 6--realtor, inspector, 3 contractors, property manager) to get a clear understanding about the property and its rental prospects. Due diligence is key because sure a $15K property that rents for $1150/month sounds great... but if you can't rent it out, it sounds horrible.

Honestly, I think the issue is that so many of the so-called "gurus" preach wholesaling as a great way to get involved in REI, but they don't talk about marketing, etc.

A good wholesaler is good because of what Charles said above, but to take it further, they're good at marketing and finding the deals. ALL the time, I have wholesalers in the area sending me deals they got off the MLS--negotiated it down from list about $10K and then marked it up $15K-20K. Why would I want an MLS deal that I have access to and then pay $10K above list price??

There is no logic in the thinking and although I do believe the MLS is a decent lead source, it is also the most competitive and easiest to access. I've purchased 2 properties from wholesalers out of the hundreds I've seen, which says a lot about wholesalers, in general. The sad part is the good wholesalers sometimes get a bad rap because the bad/lazy ones don't know what they're doing.

I did something similar. Late 2008-Early 2009 I bought a whole bunch of properties. Something like 9 or 10 properties. I had just started in 2008, but it all worked out because there was a system in place. Figure out a system that works for you, and STICK TO IT!

For example, when I did all those properties, I made sure all my ducks were in a row prior to closing--that included, inspections (duh!), scope of work, contractor bids & decided the contractor I was going to work with, the project manager was in place, property manager was ready, expectations for every person and what they were doing, etc... it's a pretty extensive list.

I pretty much put everything in place prior to closing and ran each and every property through that system. As a result, I was able to minimize holding costs & therefore financing costs on the flips, and minimize vacancy time on the rentals. So, above all else just make sure you have all your t's crossed and i's dotted before you start diving in. Hold your team members accountable and if things come up, deal with it and move forward. Run it like a business and you'll reap ample rewards!

Bill, I think it's a great idea, but as Calvin said, with the larger banks, I think it would be tough to put something like this in, especially for someone without a consistent track record of closings Have you done it before and gotten an offer accepted in this manner?

I'd probably say David hit the nail on the head. I pretty much stay on the offer system as much as possible. Keep staying on top of putting out as many offers as possible when dealing with REOs. In my experience, in the beginning, I've hit, on average, about 8-10% on REOs. As you expand your contacts and build a track record you will get more "exclusive" properties such as pre-lists that will allow you to potentially jump into some properties before they are listed, therefore eliminating a lot of your competition.

As for taxes, looks like Jon pretty much hit the nail on the head.

As for the closing costs, call around. If you have a transactional lender in place this attorney seems highly unreasonable. I'd probably contact several real estate attorney's offices. An avenue you may want to explore is getting referrals from other local investors through your local REI clubs or through local agents in the market. $1000 retainer and $1500-2000 is crazy, IMO.

Usually what happens to me on Craigslist for reposting is that if it didn't get pushed down, I'd get my listing reported/removed because of reposting the same thing multiple times.

Really, there is no difference between reposting and spamming (you sending out the same ad 3 times a day). However, for example, in a market like NYC, everyday there are easily 500+ rental ads. As most people do on any search engine, they only check out the first page. If yours is pushed down, no one will see your ad.

Hackers can attack you via spam through random scripts that they have. I can't tell you how many times I've gotten an e-mail from 5 different e-mail account names all within an hour that have very little to do with my post, e.g. "We can buy your house, stop foreclosure!" when I put an ad up to rent a property or something.