All Forum Posts by: Mike Flora

I hate this rule!! I would not wait, if your confident in your rehab and price it right you should not have a problem. Make sure you put in the notes that it’s not FHA eligible. You would think they would have a way to check for fraud now days with the advancements in technology and if it’s such a problem why don’t all the loans have this rule. It does nothing but hurt the buyer and seller this rule does. Anyways, we never wait to list and have yet to run into an issue, but not sure about your market out there. Every day you own that property you lose money and I believe they have a low money down conventional loan out there as well, but don’t quote me on that. I believe one of our homes sold to someone who used one.

Double check your area on the 150K for terms of succession. Out here in my area of California it’s 150K or less. Now you say it’s in a trust?? If its in a trust then you need to find the immediate heirs of the deceased because most likely they will be included in the trust as property should go to them. If so then you should be able to sign a purchase agreement with them and title will ask for the trust and death certificates and you will skip probate/terms of succession. FIND IMMEDIATE HEIRS and you might be able to get multiple deals on this. Kind of strange no one has come forward on these properties to cash in or do something with them. Repost once you find an heir or figure out the whole story with these.

There will always be some sort of next of kin out there somewhere in the line of succession. The liens will grow until title is transferred out of the deceased persons name and either paid off or property sold. If taxes go unpaid for five years the property will be auctioned off. I have paid a private investigator to find the first heir to properties before and had some great deals out of it. You will have to go through probate with an attorney to transfer title, unless property is in a trust, or if property is appraised under 150K, at the date of death, you can do a terms of succession, which is usually a few months instead of a whole probate process and if there are multiple heirs it gets tricky. Let alone you will have competition during the probate/succession process and contracts are not fully binding since property will not be in your sellers name yet. You can always start paying taxes and take care of property and try quiet title or adverse possession, but that’s a risky game to play. FIND THE HEIR AND CUT A DEAL THAT WAY! My best advice on this

Cosmo Iannopollo I wish there was a pot of gold! Once you start getting some volume on your rehabs the hard money will make you a lot more money than using all your own money on flips. Don’t forget that!!! Leverage is the key to accumulating more flips and rentals, especially if your starting out in this business with minimal amounts of cash.

Jim Shack there are different ways to loan people money on these real estate deals but never heard of the 100% financing and rehab financed as well. Not saying there are people doing this but as you said I would imagine even more profit to that lender on the closing cost fees and of course the interest only payments he will receive due to funding 100%.

And there will be closing costs on your end as well to pay to close the purchase, sorry I left that out. So it will be more than the 10K you initially put in.

Seller owns property free and clear and you guys sign a purchase agreement for 100K You put down 10% which is 10K to the seller(skin in the game) Your hard money lender put in 90K, which is the rest of the money due to seller, to get to that 100K owed. Then Escrow closes and your seller has the 100K owed to him and then you pay the lender who put in 90K monthly interest only payments till you resell/refinance the property paying off the 90K owed to him. The hard money/private lender will want to see that your buying the property at a discount to ensure safety on his end and the less the discount the more money he will want you to put down.

Your home can be a bank as well to invest in property. Don’t forget about HELOC. Bought my house for 237K out here and it’s worth 400K and I get 90% of my equity out of this with my HELOC at 5.7%. I use this for repair money and down payment money on deals that’s way cheaper than hard money. So my personal home is a big player in my fix and flip business as an investment. Money out for down payment/repairs and then paid off after sale. Can’t do that with a rental. Renting can be good for some people depending on there investment goals and it’s crossed my mind to do so but I actually enjoy working on my personal home and having the freedom to pick materials I want and have a pet if I want etc etc. Give and take with both but once you have the equity your personal residence can become a tool for more property investments.

Tom Gimer if I’m in Escrow and a mechanics lien pops up on the title report for the property I’m going to buy for say $1000. Is this as easy to rectify by a demand or affidavit signed by the Contractor who placed the lien on the property and he would be paid at close of escrow??? Or does it need further attention from a lawyer or more county recording? Please tell me it is that easy lol I would say yes, BUT...................

Been through this and about to close a deal in a couple days as well. Lots of factors involved. They will do an appraisal of the property when the owner of that property died and if the appraisal is under 150K you can do a terms of succession, which is much faster than probate and costs a lot less and you will have a lot less competition with people contacting the family members. Also is she the sole heir to this property of the previous Owner? Does she have a brother? That could become an issue as well. Like Tom Gimer said, you cannot have anything binding for the property if it is not in her name. You will not be able to open escrow at all till it’s in the heirs name. I would pull a title report prior to even paying for the lawyer to see if you can rectify problems on there as well. I did write up my own agreement that was pretty detailed about ensuring the sale of the property to myself after I pay lawyer fees and property goes into her name and she signed it and my lawyer filed it with the file but it’s not fully binding and further action would have to be done if she broke the contract. Sit down with heir and explain everything with her and feel her out and have her sign something and just go from there. Other people will contact her in probate process though, I can guarantee that.