All Forum Posts by: Matt Swearingen

My grandmother passed away recently.  She had a reverse mortgage with a current payoff balance of $150K.  The house is in near-perfect condition (Grandpa maintained it well until he passed).  I haven't gotten a BPO or appraisal yet, but looking at comps the house on 11 acres in this rural town is worth $210K-$240K.  Her heirs are her three sons.  None of them have any interest in taking on a mortgage to turn this into a rental or flip it, they are all greiving for their mom.  Since I've never done a flip I wouldn't be comfortable taking out a second mortgage (although I could front the $30K for the downpayment with creative financing).  I know a flipper that would love to get ahold of a "paint and carpet" flip with 60K-90K  equity in the deal, and she would be willing to pay a finders fee since she regularly deals with wholesalers. 

My question is: Can anyone come along and purchase the house for the amount owed to the reverse mortgage company? My thinking is that only the sons can purchase the home for $150K. If they don't buy it then everyone else will get a chance to purchase it when the reverse mortgage company lists it on the MLS at appraisal value. Is my thinking correct?

Another interesting wrinkle: My father (one of the sons) purchased the 75 acres of farmland adjacent to this property shortly before Grandpa died, to lower their property tax bill.  This was before the reverse mortgage was in place.  Dad now owns the right of way (driveway), and the well for the 11 acre property.  In order to sell the property the reverse mortgage company would have to dig a new well ($10K) and cut a new driveway, 200 yards from the road and bridge over a creek (an EPA/DEP nightmare to permit).

Any ideas on how to approach the reverse mortgage company?  Any ideas on how to extract the equity from the property for the brothers?  They are all successful and financially sound, but it would be a shame to just let the property go.  Any thoughts are greatly appreciated.

-Matt Swearingen 

Would be nice to hear where the middle class falls into all these "statistics"

There is no such thing as "class", it's an artificial limitation poeple put on themselves. The illusion of classes is a holdover from ancient times. A king would seize power by force and claim that he and his progeny had some devine right to rule. Those that supported him in his rise to power would become the gentry or the upper class. Those people were no better, they just backed the right guy.

Fast forward to today, people use the concept of class to explain away success and failure. If someone makes a fortune, it's because they were "born into it." If a person drops out of high school and spends their entire life in poverty it's no fault of their own. This is conventional wisdom: the outcome of your life is a forgone conclusion, based on the station you were born into. It makes way more sense to group people by how they make their living, rather then how much they make. To plagiarize Kiosaki there are three groups of people:

Those that make a living by acquiring assets that create value (Investors).

Those that make a living by creating value with their time (employees/self employed).

Those that sponge off the first two groups through compulsary taxation and redistribution.

If you re-read that list of 20 things the "rich" do every day through this prism it will make more sense. It's interesting to think about the real estate investor who "only" makes $50K/year in passive income, vs the engineer who makes $100K/year. While the engineer out earns the investor I'd wager that the investor practices many of the "Rich" habits on this list, while the engineer does not.

I was looking through the Pittsburgh Real Estate for Sale section and came upon quite possibly the worst attempt at marketing an investment property I have ever seen (profanity ahead). I have removed the links and phone numbers so I'm not "marketing" the property accidentally, I also removed the header, he was asking $42.5K when this was published. Do you guys/gals have examples you could share? I would enjoy reading more like this, if only for amusement.

"I need to sell this building ASAP. I have 60k into the rehab. It has new roof, new electric, new gas, new furnaces , new water heaters, new vinyl siding, 2 units complete and ready to rent. 3 of the other units need flooring and paint. The new flooring is on site. I want to be done with this building. XXX-XXX-XXXX When I say new electric I mean 100% rewired from basement to the 3rd floor all new 12 wire in kitchens and baths all new lighting circuits all new outlets UP TO CODE. All utilities and heating sources are seperate. New rubber roof. New vinyl siding. New laminate floors in 3rd and 2nd floor units. If you do not know what it costs to do something like this or don't appreciate how much work has gone into doing this please do not contact me. If you've never renovated a apartment building in the city of pgh and filed all permits and meant with all inspectors then you do not know what I am talking about. This is a steal at this price you would make you're money back in the first 3 years. Don't be a yuppie when you call me cause you'll just piss me off. I wasn't born with a silver spoon in my mouth like most you investors I started with nothing and know what it takes to make something out of nothing I'm 25 I own my own home and 2 apartment buildings have flipped 4 houses not to mention building and selling 5 hot rods. So contact my realtor if you're not on the same page as me thanks. XXX-XXX-XXXX David XXXXX or call me but don't be a dumbass XXX-XXX-XXXX Dave"

This guy has a whole bag of chips on his shoulder. I can't imagine anyone wanting to do business with him after reading this. He's probably behind the eight ball on his loans and just got low offers from ten investors in a row. I called and offered him $20,000 sight unseen on his voice-mail... surprisingly no call back yet, I'm hopeful. I did glean two very important life lessons from this listing:

1. Don't be a yuppie

2. Don't be a dumbass

If the debt is large enough it might be worth hiring a private investigator. It shouldn't cost more that $50-$100 to get the employer's name and address. If he was your tenant don't you have a W2 for him?

Hi all, I'm a complete real estate novice. Bigger pockets is an awesome resource/community I'd like to be a part of. I couldn't find my answer to this question using the search function.

I own 12 self-storage units (they came with a piece of property I was purchasing anyway). Can I require automatic monthly ACH withdrawals as a condition of the lease agreement? I think this would do several things:

1. Payments would never be late so long as the renter had the funds.

2. It would discourage people without checking accounts from applying. In my experience folks that don't have checking accounts tend to be financially irresponsible. Think payday loans, 18% cash advance on credit cards, title loans, whole life insurance etc...

3. For self-storage units it might keep the expense under the radar. If they aren't writing that check every month, they'll be less likely to decide they don't need to store their junk. Out of site, out of mind.

Is it legal or ethical to require automatic ACH debits for residential rentals? I think the benefits would be the same. Does it discriminate against a protected class or break fair housing laws? Would requiring it put you at a disadvantage over landlords who allow checks and money orders?

Sorry for the long first post. Thanks in advance for any feedback.