All Forum Posts by: Michael Otranto

It depends on the state. In North Carolina, the first license you obtain is "Provisional Broker". A PB must be directly supervised by a Broker in Charge. With additional edu the licensee can get a "Brokers License". A broker is really someone who can operate with less supervision and more independance. This is not to be confused with a "Salesperson" who is employed by a home builder. As long as they are salaried employees they have no licensing requirements.

@briangibbons Great stuff! I use a similar presentation when I meet with sellers. I like how you break it up into columns.

A great rebuttal if you run into resistance is: "I'll be paying your mortgage for you. That's what you wanted isn't it". Also: "What will you do if you can't sell this house?". Those 2 have worked well for me in the past. Getting the seller to focus on the problem at hand.

Hello all, I have a Seven house portfolio in Roanoke Rapids available. All houses are close to one another in quiet neighborhoods. Six houses are rented. One vacancy will be filled quickly. Average vacancy time is 2 weeks. Houses have a tax value of >$200K. All houses are old and deteriorating. One house has potential as a small commercial rental.

Total Monthly Rent
3500

Annual Net Operating Income
31,276

Cap Rate
19%

This is a cash flow investment opportunity. Rehab for resell is NOT suggested. Does anyone know of an investor that would be looking for this type of an investment in a rural area of NC by the Virginia border?

No worries @Bill Gulley You're right that I didn't word that statement correctly. Instead of: "The correct way to this is x" I should have said "In my experience x has given me the best results". If I did come across a sub-to opportunity on a VA loan I would search for a partner to do the deal with. I'd rather have 50% of profitable venture than 100% of a problem.

@Troy Michaels you can own real estate in any entity you please. I won't own it in anything other than a land trust. A lot of material has been written on land trusts and their benefits. It is true what you said about something being applicable on a national level. If I bought property in other states I would still go the land trust route because of it's benefits. As far as being "correct" or "incorrect" that's for people who want to teach courses. My deals being successful are what's most important. I have enough knowledge and experience so that I don't have to justify either to anyone. @Phil Pustejovsky brought up a lot of good technical points on what can happen down the line with taking a VA loan sub-to.

I have never done a sub-2 with a VA loan. However, the correct way to do subject to deals is to have the owner quit claim the property into a land trust for "estate planning purposes". This is protected by the Garmin St. Germain Act. I have yet to be involved with a sub-to deal and have a bank call the loan on us.

@Shayne Hastings I believe wholesaling is a necessary skill for all to learn. You need to learn how to find MOTIVATED sellers (those who HAVE to sell NOT want to sell), get them under a simple contract, and sell to a buyer. It's not nearly as easy as the "guru's" lead you to believe. I agree with @Bryan L. that you should find a house for you to live in before buying an investment property. I picked up a primary residence for myself on a 10 year lease with option to buy at the current mortgage balance at time of exercise..now that's a GREAT deal!

The seller has to be motivated. I'm dealing with a seller right now who still thinks they can do it themselves. The reason why sub-to is better than a lease option is because the house needs at $20,000 to be made rent ready and has a skinny cashflow & equity position. I have to convey to them that if I'm going to take the risk of rehabbing I need title. After all, I'm the buyer therefore I'm the customer in this situation.

That's a good rule of thumb. I usually assume 20% of the gross rent roll for vacancy & repair.