All Forum Posts by: Mike O.

Hello I am currently negotiating a discounted payoff with a second mortgage. The balance is $25,000. I offered $5,000 and the bank came back at $16,000 and said that is “pushing it” Could anyone provide any insight into negotiation with second mortgage lender? The circumstance: The owner is gone across country and hasn’t paid in over a year, they do not care about credit, repercussions or the home, owner has given me permission to speak with both banks. 1st mortgage is $118,000 , I found the vacant property driving for dollars and called the number listed on sign at house (it is not listed with agent). Number is to Ocwen, I have done some research and found they have some orders from various state’s banking divisions to cease any foreclosure activity. I plan to pay the first mortgage off, but do not want to pay the full second mortgage balance as I can get into the property for around ($118,000-first -- $5,000-second) $123,000 rehab around $20,000 and sell for $160,000>. Additionally, if I understand correctly, should the property go into foreclosure, the second mortgage would only be paid if there are any funds left after 1st mortgage payoff and that’s if someone other than bank bids over the current balance of $118,000. My thought: Present the comps, reference the fact that they are not getting paid when the property forecloses because the current fair market value is not enough to cover first and second mortgage.

I was hoping someone with experience in seller financing could suggest structure, I am currently working through numbers and financing, but hoping someone might see some part of this deal I am over-looking or a potential pitfall? The owner is hoping for $3,500 a month in monthly payments in year 1, all payments would amortize against agreed upon sale price. I have $15,000 set aside for maintenance and capex from a previous whole sale deal earlier this month. One property is a complete rehab and the other 4 all have recent upgrades with HVAC, roof, windows. All 5 have tenants and leases in place. 

Portfolio I was offered tonight on CFD is no money down over 10 years @ 6% with annual payments beginning in year 2 and balloon in year 10 amortized over 20 years...Other than that the owner said they understand I need the weekend to sort out numbers, but that they are willing to negotiate. All the properties are free and clear without mortgage except the property that is complete rehab; that is $81,000.

       1                    2                3                    4               5              Monthly        Annual

$1,550.00	$1,000.00	$1,000.00	$900.00	$1,550.00	$6,000.00	$72,000.00
($155.08)	($151.92)	($160.42)	($138.33)	($97.08)	($702.83)	($8,433.96)
($150.00)	($150.00)	($150.00)	($150.00)	($150.00)	($750.00)	($9,000.00)
$1,244.92	$698.08	$689.58	$611.67	$1,302.92	$4,547.17	$54,566.04

Any strategy or structure this deal might be best for?

Is this a deal to be had?

Refinance options?

Price on table is $530,000

Hello All,

I thought maybe I would see if anyone would be interested in a small bit of mentor-ship to help analyze an offering of 5 single family occupied rentals. Just curious if anyone could take a few minutes to critique/recommend adjustments to a deal I was just presented with...

The seller had a residential real estate agent BPO at the prices below. On my phone call I explained to the seller I am looking at the portfolio from an income perspective and would not be offering at a price similar to the BPO value (single family/owner occupy). 

My thought was to get the owners lowest acceptable price as a package and lowest price on a per property basis. I could see if I could whole sale them individually or as a package. If I was able to meet the owners price point, I keep any profits above that amount, for simplicity and conceptual purposes lets say they state a price of $500,000 for the package, if I was able to get $550,000 I would keep the $50,000 as my fee. I also thought I could market these on an individual basis and try and get top dollar and market to owner occupants for the next 9-12 months using the same concept above, but with one tweak... If I was able to get top dollar per property and eliminate realtor fees for 4/5 properties, I would get to keep the 5th property for myself; deed over to me, no mortgages on any of these properties. They have all had many updates and have .very little in Capex from what I can see from pictures, but I still included $6,000 for the year. All occupied with year long leases in place. From my research on market rent the properties are around $50-$75 below market average per property.

Hoping a few people could lend a some ideas or advice on anything I may be over-looking or provide another perspective or analysis...

*Owner is selling because of age. 

* I started with $0 and am at $12,000, (just closed my first wholesale deal earlier this month) just looking to build capital reserve and hopefully find a deal I can start building my own portfolio on.

* Add in any financing and the deal is too skinny.

* Any owner occupant buyer will need to kick out renters (I assume most are not interested in dealing with also the current owner isn't too excited about buying out leases)

PROPERTY	A	B	C	D	E
ROOM	4	2	2	2	2
BATH	1.75	1	1.75	1	1	ANNUAL
RENT	$900.00	$875.00	$1,000.00	$725.00	$725.00	$50,700.00
PROPERTY TAX	$155.08	$151.92	$160.42	$138.33	$97.08	$8,434.00
INSURANCE	$100.00	$100.00	$100.00	$100.00	$100.00	$6,000.00
ELECTRIC	Tenant	Tenant	Tenant	Tenant	Tenant	$0.00
GARBAGE	Tenant	Tenant	Tenant	Tenant	Tenant	$0.00
WATER	Tenant	Tenant	Tenant	Tenant	Tenant	$0.00
CAPEX	$100.00	$100.00	$100.00	$100.00	$100.00	$6,000.00
MAINTENANCE	$100.00	$100.00	$100.00	$100.00	$100.00	$6,000.00
MONTHLY CASH FLOW	$444.92	$423.08	$539.58	$286.67	$327.92	$24,266.00
TAX ASSESSED	$90,000.00	$89,000.00	$98,000.00	$81,000.00	$56,000.00	$414,000.00
BPO	$130,000.00	$140,000.00	$145,000.00	$110,000.00	$105,000.00	$630,000.00

I just closed my first wholesale deal and made a nice profit ($15,000>). I used the double close method from which I used my own funds to make the initial purchase and have the deed transferred into my name, and then executed the subsequent sale to end buyer to make my profit a couple hours later. Owe many thanks to several individuals on BP who took time out of their busy days to give me advice and guidance! I am now hoping to take things up a notch. I know it is critical to have buyers and sellers lined up and be very organized when opportunity arises. Does anyone have any suggestions as far as real estate software to log properties, organize contacts, keep track of leads etc. ? I was able to get my hands on a delinquent property tax list along with nuisance (building and property code violation) list...Looking to get organized and find a deal from these lists; 100> properties. Looking for efficiency. Thanks for any consideration and Help.

has anyone been in the double closing/simulateous close related to a whole sale in which the seller from the A-B transaction runs into the buyer of the B-C (A-C)transaction or how to avoid those two running into each other at close or should a wholesaler just be upfront and tell both of them what is going on? i will be going to a closing and due to a last minute scheduling change both transactions will take place at same time... what if Party A runs into party C and they are able to figure the spread on the wholesale?

I called on a home this weekend hoping to take a look and see if there was a deal to be had. After speaking with owner, she is wanting to retire in 1 year and has 8 single family units (not sure on numbers yet; all are occupied) she would like to sell in the next 1-2 years, in one year she is eligible for social security, I do not know the technicalities of social security, she mentioned if she made a large lump sum prior to social security eligibility there might be an issue with her benefits moving forward (?), thus she is wanting to put gears in motion. I am not 100% certain, but from our previous conversation (I will need to confirm) it sounds like the properties are debt free.

Anyway...I was wondering if anyone had any advice on a potential purchase structure or whole sale? I  thought perhaps to whole sale the properties, probably one at a time and tell the owner up front I will not be purchasing the properties but could find her buyers and reduce her hassle trying to get rid of the portfolio...or

Maybe a CFD or master lease possibility on the properties and then try to refinance in a couple years for myself. Maybe I am getting ahead of myself a bit, just looking for any advice or perspective on how to look at this opportunity.

I have limited capital <$15,000, but thought this might be a great opportunity.

Thanks

Hello All

I am meeting the end buyer of my whole sale transaction tonight (1st one). My questions is...what type of purchase agreement do I put in place for the sale of my contract to end buyer? I have the property under contract and will be closing with cash, I then hope to execute the additional transaction (sale from me to end buyer for the higher price), both transactions will be at same title company; double close. What type of agreement for the sale of my contract do I need to execute? If anyone has any insight I would greatly appreciate it, otherwise I plan to consult with attorney or am I off in the mechanics of the transaction?

Do I put together a letter of intent and draw up an additional purchase agreement after my initial purchase and after closing and deed passes over to me?

it is 80/20 split

thanks!

I am negotiating my first wholesale deal, the potential end buyer was found indirectly via a Craigslist ad for another property I called on. The other whole saler is asking for a JV agreement. We plan to meet in person to discuss the agreement. I have the property under contract...

From a common sense standpoint it would seem prudent to meet up to discuss and get comfortable with one another

Does anyone have experience in this type of situation...more/less dealing with potential buyer via another whole saler. How much interaction should i be having with actual buyer of property and or other wholesaler for negotiation?

What is typical in this type of negotiation regarding the disclosure of address, proof of funds, who draws up the JV agreement and purchase agreement (for the final end buyer purchase from which i would be selling the property after I closed on the A-B transaction) . I plan to double close, so they really should not need to know what price i got property under contract for just the split on the JV agreement (flat fee).

Stumbling a bit here, so any help greatly appreciated.