All Forum Posts by: Mike Nelson

None of the properties have gone to auction.

I apologize I did not mean "Recorded as short sale" what I meant was the county appraisers website will have an "SS" after the deed type in the sales history to show it was a short sale, Ive seen it on other properties but none from this Rehabber. So I thought it was kind of odd. There are several dozen of these transactions from this Rehabber in the last 2 years, It seemed strange to me how he was getting all these deals, if they are done through a realtor he must know quite a few, I was thinking he may have been clever to contact these people from the lis pendens and negotiate a short sale with the banks...... or is this kind of unheard of?

Im looking for new ways to get some leads on potential rehabs and I took to the county records to see what properties one of the more successful Rehabbers in my area does for sniffing out good leads. Well I looked at several people he bought from over the last couple years and here is the theme I noticed from all of them. From the individuals he buys homes from they all have notice of defaults and judgements on their property 8-12 months before they are sold to the Rehabber. So it seems he contacts these people via mail or whatever with interest in buying their property. I notice that the judgements show an average of 175-250k owed on the properties. The county records show him buying them for 85-135K depending on the house. So what Im wondering, is he getting the banks to agree to sell to him far less than what is owed to avoid the hardship and heavy cost of foreclosure? I believe these are all fixer uppers if he is able to do this, and must be able to present the cost and potential ARV to the bank. IF the bank agrees to this why is it not recorded as a short sale? All the county recordings are warranty deeds either disqualified sale or Exception due to condition. And another thing I notice is after the Rehabber sells the house there are Mortgage releases recorded on the property from the Bank who held the mortgage in default. Hope I didn't confuse anyone, and maybe I interpreted something wrong..... but can someone who maybe has done this explain this to me?

Anyone have an operating agreement they would be willing to share for member managed llc?

So if I move to a new town buy a house... fix some things up. Find out I cant stand my car being broke into 3 times a month or terrorized by the meth head neighbors..... say screw this im moving.... 4 months later sell the house for more than I paid.... now I am a dealer and have to pay SE tax??

Based on his intent, which is not to be a real estate flipper, if he buys and sells one home is he going to be subject to SE tax?? considering they classify him as a dealer....

I have a friend who was recently laid off and was looking to buy an REO in an OK neighborhood. If he buys it, fixes it up and decides he doesnt like the neighborhood in say 3 months time, and decides to sell, can the IRS flag him as a dealer? I only find the word "intent" when I research this.

What did you do about an operating agreement?

Alright I think I just opened a can of worms here, but seriously, Id like to hear from the people who don't think you need an attorney when forming an LLC for example. I can see where the advice of an attorney would be very useful in complex situations say regarding multiple members, but in my case I would be setting this up strictly as a 1 member llc. I am not afraid to do the homework and put the time in to do it right. Does anyone care to share their experience??

Good stuff. This is exactly what I was aiming at. This happened to a colleague recently and thought Id spark the topic. Great responses! One question on the agreements, are these pretty boiler plate?