All Forum Posts by: Mark Burik

@Jim Goebel , I found that statement interesting too! If I dive into it a little bit, we know that banks don't really want to be buyers and sellers of real estate but if you have paid off most of a property (say 50%) and you foreclose or for some end of the world reason, the bank calls you to pay off your debt now and you can't they can profit more on the resale of your property once they foreclose. If you still owe them a lot and maybe they want to foreclose on you and sell or auction the property, they aren't going to profit much from that situation since they are still owed (say 70%)

@Jason Dillard I like your way of seeing threats and advantages from both sides!

Don't I have the option to legally NOT CLAIM things as business expenses?

Hey Everybody!

I've been wrestling with this question for a bit. I have a small business (not real estate) and I have currently have 4 buy and holds, each with 30 yr conventionals on them. We've had two years with a LOT of startup expenses in the biz and I can legitimately claim very low income. For the past two years, on the advice of my lender, I didn't use the deductions so I made it look like I made 50k on my taxes so that I could get some mortgages.. Of course the problem with this is that I had no money and needed to pretend that I did, and then I went into debt paying taxes just so I could get the mortgages... I now have 4 mortgages with cash flowing properties and I have next to nothing in the bank with tax season upon me..... Should I do this again and pay another 10 grand in taxes this year just to pretend I'm making a lot? Is there another way to loans that doesn't rely so heavily on the income I show on my tax return??

you can also contact me at [email protected] or my phone number is 7186377474. Id love to talk as soon as you have a chance.

I'm hoping I can peak your interest.

I am under contract for another property. Its a 3-2 and its one half of a duplex at 2074 San Marino Way North, 2, Clearwater, Florida 33763. 1630 Square Feet

I was just turned down for a traditional mortgage because of a loan a family investor gave me to purchase a great deal with cash. I had to give that information to the mortgage broker and since I'm technically in debt 75g to my investor I was told that my debt to income ratio has been destroyed because even though I'll be MAKING money on that loan every month, they don't count it as profit until I have a proven record of income from that or any other rental. Its not ideal but its not easy being the new guy I suppose.

The seller is the widow of the owner who used it as a rental. He recently passed and left her with some properties that she doesn't want to deal with. The last tenant also passed away a few months ago and the property has been sitting vacant will all of the last tenants things still in it. The faucets and flooring need work but the house is well built and in great shape other than that.

At my estimates, in order to get rent-ready, its going to need about $15,000 of work. I have it under contract for $85,000. Thats $100,000 total,

It would rent for $1500 a month at a Low estimate.

3-2's in the area for the last 5 months have sold at an average of $182,215 and a median of $183,000...

This can be an 82 thousand dollar profit as a flip or a 9% ROI after expenses (taking a conservative 50% out of rental returns for insurance, tax, property management, repairs/maintenance and capital expenditure) as a buy and hold.

If a buyer can get a 70% (normal for income properties) cash out refinance after 6 -12 months, they would receive $126,000 which means a 126% Return on Investment after one year and then STILL be renting at a profit.

A $126,000 30 year mortgage at 4.25% has monthly payments of $619.84. Cash flow at that point would be $130 per month after expenses plus the investor has already MADE $26,000.

I'm looking for a 50/50 financial partner or a hard money loan.  I can also wholesale this. My inspection period is up in 5 days which means my earnest will be fully committed but I need the funding.  Is anyone interested?

UPDATE: After sending this email this morning, the seller spoke on the phone with the broker. As backstory she has been trying to sell this home so she can move CLOSER to her daughter. She has a condo under contract that is contingent upon this home being sold and what we got from their conversation is that she is just pretty afraid that I will back out of the sale and then her condo will fall through.  She is now stating that she wants to go through with the sale and close ASAP.  I find myself to be a good "talk off the ledge" person and really want to call or contact her to try and soothe her but I just don't know if thats a great idea or if I should just let BARKING dogs lie. haha..  She is going through enough stress and it doesn't seem like she has anyone to vent to...   So right now we are both signing an addendum that says we will put in our best effort to close asap (move the closing date up) and that no further inspections are needed (the first round went very well).

Thank you for the clarification. Good to know that it would not be in my favor. Upsetting that hours of my time go unrewarded. So even if she reimburses earnest and inspection fees, I don't get back wire transfer fees, interest from my lender, and hours of my life.  I'm sure we'll all say chalk it up to experience and sometimes walking away is the best move. I'm still under the notion that I will try to salvage this without forcing it in anyway.    As investors, we are first and foremost problem solvers are we not?

@Tom Mole REALLY ON POINT. While most of the advice runs toward just ditching the deal. I would much rather put good effort into fixing it first. If the agents can't find what's wrong, I would make some personal phone calls and see what happened. Problem solve, give the seller some comfort and some options. Rather than just leaving, I could develop a relationship and at least have her know that I was willing to hear her side and it builds a bridge for next time if I decide to let it go this time.  At worst, the deal still falls through. At best, I calm her down and help her take joy in the transaction. I'm sure she hears "INVESTOR" and things I'm a douchebag rather than someone putting everything on the line to try and make some extra bucks each month in order to more freely pursue my Olympic dreams.

@Russell BrazilCould you explain to a laymen what you meant by your comment. I don't know what specific performance means.

Really good input. I figured the consensus would be to walk away but I love the idea of thinking outside the box with her as my first renter.  @Benjamin Pekarek But then I have a looney renter AND if a looney seller :/.   The wierd part is that the day before she asked us if we could move the closing date up and provide a Letter of Intent to Purchase. Which was showing that she was super eager to get the deal done.  According to the info I have she just bought or was approved to buy a condo that she was planning to move into. Its just a very abrupt 180. 

I've been busting my hump trying to get my first deal. I put the earnest down on one but after inspections found it would cost an extra 40k so I pulled out. Now I've got a golden egg. Buying a great condition house for under market value from a seller who was motivated. Everything is signed, inspections are done and I even thought about moving the closing date up so I could start cash flowing sooner. Yesterday the seller went looney tune and wants to pull out and is threatening a law suit with the selling agent for predatory practices.  The following is an email she sent to the agency. She also had the email of my private hard lender because it was in the proof of funds and emailed him telling him to release any interest he had in the property or the loan because the property was about to be tied up in a law suit!!!! This is a nightmare.

"Mrs. (Broker),

I was referred to you by (buyer agent) from your office concerning my extreme dissatisfaction with the service ... offered to me in the above mentioned property.

I never solicited the services of (seller agent) to sell. I met her again open house in a completely different part of town and vaguely expressed interest in selling my cottage.

I never contacted her but found several notes from her in my mailbox with her card on it. she said she had a buyer for me.

After several notes I finally called her back. She reiterated that she had a cash buyer. I thought she would be representing the buyer but the deal was that she was going to represent me and (buyer agent) was going to represent her volleyball star friend/real estate investor.

(Seller agent) told me it was an all cash deal, sight unseen. I felt a little skeptical but accepted an offer of 80 thousand dollars cash.

The day after I accepted the offer my daughter had another medical event, this time she was bleeding internally. The update from the physician was not encouraging.

Overwhelmed, I called (seller agent) crying explaining my new situation which was that I could no longer leave st Pete as planned and asked her if the buyer, an investor from out of town, would reconsider.

She told me that I could not get out of that contract because I could get sued and that we had to proceed with the inspection that Friday.

My long conversation with (buyer agent) tonight indicated that she never even passed on that information to her, the buyer and his team were under the impression that they were helping me by buying my house.

I don't want to get into all of the details of the deceptive methods that (seller agent) used to hook me into this deal starting with painting (buyer agent) as someone who is heartless and/or does not answer her phone,

You may find some details on the Internet at some point as well.

I will never do business with (Agency) again and your superiors will explain to you where the failures occurred in time. You will have a better idea after your long meeting with (buyer agent) tomorrow. I had to pick up the phone to represent myself to her in this transaction and I cannot find fault in her actions considering my agent never conveyed critical information to her.

There are rarely consequences for people who care only about their own interests at the detriment of their clients and coworkers but once in a while someone will expose them.

I am seeking legal counsel in this matter and it would be in the best interest of all involved to cancel this contract.

Do govern yourself accordingly,

(Seller)

Should I just walk away at this point? Its a great deal, no work other than some tiling and will cash flow really well. But what if she decides to squat or I sit here battling over the property while having to pay back my lender.