All Forum Posts by: Account Closed

Quote from @Abram Hill:

What would you say is the most important thing to do for someone who is new to the business?

There are 3 things you need to start with.

1. Figure out what kind of investing you want to do.
2. Figure out how much capital you have to work with
3. Figure out where you want to invest.

If you are a self starter, dig into the archives of Bigger Pockets and other resources. If you need a little guidance and saving time is important to you, get a coach. Obviously you don’t know what you don’t know and the only way to find out is either by experience or by teaching.

Some people say they "would have saved the last year and a half" if they'd had someone to direct them". Others have said, they are “researchers” and they did it all on their own and are completely happy about it.

It’s probably useful to ask specific people what their experience has been and go from there.

Quote from @Noah Bussanich:

I'm looking to buy my first creative finance, owner occupy deal. My ideal place is a multifamily and I'd house hack. I've sent out a couple hundred letters to owners in the area. What are other ways I can find off market deals to owners to pitch creative financing to? Also, what should I be doing with my time to maximize my chances of finding off-market deals for creative financing in the multifamily space?

What market are you looking in? OR is going to be expensive and competitive. We've built a whole training about "off market, creative finance" and while it's very profitable, it takes more energy to find properties that qualify. In your case, you'd need to identify what a multi-family means to you. I've worked with folks to find 4 units and I’ve worked with folks to find 200 units. There is a huge difference in how to approach them.

Quote from @Zachary Petrak:

Quote from @Chris Seveney:

@Jody Ogden

How many deals have you done and how much have you made the past year?

This is what I want to know, because I am very skeptical of this program. 

He put out a video and says that the purpose of his community is not for him to train investors, but it's to bring in small lenders who train each other and use each other's money to do deals. The cost to join is to keep the "rif raff" out. (my phrase) His phrase was something like, "if they don't have money I don't want to bother with them" or something like that.  

Quote from @Isabella Mendes:

Hi,

I have $400k that my husband left me after the divorce. I never worked my whole life and I'm not finding jobs...seem to be procrastinating. Im also very irresponsible with money. I need to do something with this money so it's locked for me to dont spend everything and also I need to figure out a way to get some income every month so I can support myself. Can you please give me suggestions? I need to decide asap!

Hi "Isabella", there seems to be some confusion on how real you are, so here is a simple test, if your left hand has 6 fingers, how many toes are there on your right foot? If you take that number and invest in mutual funds for 12 months and sell, what is left over? Then we can help you.

Quote from @Joseph Hernandez:

@Mike Hern. Thanks for the great info. I really appreciate it. No, I won't waive my wholesaling fee. I don't work for free. Property is owner occupied. He already found an apartment and is ready to vacate prior to closing. He told me he does not need any money from the sale. How can the seller not accept the reinstatement? My attorney told me that a borrower has a right to pay off all arrears and the property will be in good standing as long as it's paid before the auction date. However, I didn't mention that it's a sub to transaction because the seller told me yesterday he'd accept a sub to. I already called the lender and this Monday they are emailing me the payoff demand. I already have a current mortgage statement, that's how I got the arrears amount.Lender is Penny Mac. Why do I need to tell them i'm doing a sub to? Do you think there's a good probability an investor will purchase the property? The amount of equity is less than what most investors prefer. However, roughly $750 monthly gross rental profit is not bad for a 54k investment.  

I'm unclear why you say it's a $54K investment. You have to add in the assignment fee. Anything the buyer has to pay, gets added into the investment amount. 

Pennymac is a big enough company that you should be okay. Personally I wouldn't discuss it with Pennymac past the reinstatement. There is no law that you have to tell them you are doing a Subject To. If you do discuss it with them, they are likely to call the loan due since it is a "troubled" loan already. They don't want more potential hassle.

Your comment: "My attorney told me that a borrower has a right to pay off all arrears and the property will be in good standing as long as it's paid before the auction date."

You should verify. It may be customary but if it isn't statute, you can't guatantee.

Reinstatements vary by state.  some states require that you pay the loan in full prior to the auction if you want to keep the house. 

https://www.nolo.com/legal-encyclopedia/summary-alabamas-for...

Reinstating the Loan

"Even though Alabama law doesn't provide a statutory right to reinstate the loan before the sale, many mortgages, like the uniform Fannie Mae/Freddie Mac mortgage, allow the borrower to complete a reinstatement.

Check your loan documents to determine if you get a reinstatement right and, if so, the deadline to complete one. Or your lender might agree to let you reinstate the loan."

Quote from @Ryan Tongue:

Quote from @Derek Brickley:

Hey Ryan!  It's awesome you're thinking about this now.  There are a few steps you can take (I did these steps before graduating and buying my first househack):

-

Back in the day when I was a loan officer, an "authorized user" on an account didn't carry as much weight, because there was no legal liability for them to pay the loan. It's better than nothing, but it meant that someone else had responsibility. What the lender is likely looking for are things that if the "co signer" isn't involved, will the payments still be paid.

Most of the lenders wanted 3 lines of credit that had been open at least 6 months and were used monthly and always paid on time.

Since I worked for a mortgage broker, we had access to over 300 lenders and there was a lot of variation on what lenders would accept. I'd try using a mortgage broker and see what their various lenders offer.

Quote from @Account Closed:

Quote from @Account Closed:

I made my first million buying pre-foreclosures using Subto. Yes, it can be done, yes it is a bit risky. Yes, you need money.

There is going to be a flood of foreclosures coming, "eventually". I've heard a couple of commentators talk about rentals in CA & NY & IL that have not paid in 4 years. The owners (landlords) have run out of money to make the mortgage payments and of course, that creates a problem for the owner. Then there are the "covid holdovers" who haven't been making their payments either. And they are everywhere from AZ to NV to FL and so on.

So, here's what to know:

With Subject To, you have to bring the loan “current”, out of pre-foreclosure to do a Subto.

I'm working on one right now. Are you saying not to waste my time?

They are worth doing, just know in advamce that there are a couple of extra steps. 
I provide the outline to buying pre-foreclosures safely using Subject To, to anyone who asks for it.

I made my first million buying pre-foreclosures using Subto. Yes, it can be done, yes it is a bit risky. Yes, you need money.

There is going to be a flood of foreclosures coming, "eventually". I've heard a couple of commentators talk about rentals in CA & NY & IL that have not paid in 4 years. The owners (landlords) have run out of money to make the mortgage payments and of course, that creates a problem for the owner. Then there are the "covid holdovers" who haven't been making their payments either. And they are everywhere from AZ to NV to FL and so on.

So, here's what to know:

With Subject To, you have to bring the loan “current”, out of pre-foreclosure to do a Subto.

If the payment is $2,000 a month and 12 missed months it's $24,000 plus late fees & legal fees called “arrears” 

You have to pay, up front, the "arrears" (reinstatement amount) plus legal fees to first get it out of foreclosure.

Once the loan has been “cured”, you have to wait a month or two for the lender to send the loan back into the regular pool of loans. If you transfer ownership during this time, the lender will notice and probably call the loan due. You lose your money.

You are making mortgage payments during this time before you own the property. You have additional costs of money to the seller so they can move, you have closing costs, and mortgage payments, property taxes, insurance and utilities plus any rehab.

In a Subject To deal, there is always the possibility of a Due on Sale call.

Since it is in preforeclosure you need to know when the sale date is and if the lender will accept the reinstatement. Have the seller contact the lender for a reinstatement amount. The reinstatement has to be paid before you can buy the property.

Once a lender has a property in pre-foreclosure, they monitor the property more closely, which leads to a higher probability of a DOS call. You also need to know who the lender is. Different lenders have different policies and it takes experience to know which ones will do certain things and in what time frames.

Some states like OR & WA legally punish investors for going after foreclosures. Know what the laws are for the states you chase foreclosures. Familiarize yourself with Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 the Consumer Financial Protection Bureau (CFPB).  They have lawyers who will educate you at your expense. (You don't want that!)

DO NOT RELY ON THE LATEST HYPE ABOUT HOW EASY AND LUCRATIVE CHASING PRE-FORECLOSURES IS - GET PROPERLY TRAINED. If the person training you doesn’t bring these up and how to deal with them, run, run, run away

Quote from @Joseph Hernandez:

Hey everyone. Newbie wholesaler. I have my first assignment. I'm not sure if it's good enough deal. Please let me know if you think it will sell. The exit strategy will be buy and hold. Below are the facts:

-address: 105 Meadow Ln, Deatsville, AL 36022

city population: 1,800; county population: 91,450. Two military bases nearby.

Value: $300,000

pre-foreclosure

Purch price: $250,000. (Loan balance: $190,000 + $50,000 arrears + $10,000 assignment fee = $250,000.)

Sub to deal. existing rate: 4.75%

Mortgage payment is $1,450 and rental comps are going for about $2,450.

• Single family
• 4 bed/3.5 bath
• excellent condition, built 2013
• sq ft: 2,420

Cash buyer only. Sale date is Feb 6

Bottom line: 50k investment for $1,000 month rental income. Pls let me know if you were in this market for a buy and hold, would it be a good enough deal?

Unless you are waving your fee, it's actually a $60,000 plus closing costs ($3500 + or -) investment. Is it vacant? Doesn't the seller need some money to move? I would add "only minutes to Montgomery" to give it context and list the military bases.

In a Subject To deal, there is always the possibility of a Due on Sale call. Since it is in preforeclosure you need to know when the sale date is and if the lender will accept the reinstatement. Have the seller contact the lender for a reinstatement amount. The reinstatement has to be paid before you can sell the property. Once a lender has a property in pre-foreclosure they monitor the property more closely, which leads to a higher probability of a DOS call. You also need to know who the lender is. Different lenders have different policies and it's takes experience to know which ones will do certain things and in what time frames. 

Quote from @Daniel Gutkey:

Hello all,

I purchased my primary residence about 5 years ago, and due to work (Military) I will be moving in September. I plan on buying at my next duty station (Boston, MA) and had been planning on keeping my current residence to rent with the possibility of moving back here in 3 years (Jacksonville, FL). But as I get closer I'm not sure if I should rent or sell. I purchased for 315,000 and have 285,000 remaining on the mortgage. The house would likely sell around 500,000 (3.5% APR) The rental rates in Jacksonville have fluctuated a bit the past few years, my total mortgage payment is 2600, similar homes are renting for about 2500-2750 in my area which has me thinking about it more as a liability than an income producing asset. I am also looking into buying investment properties on a smaller scale in some cheaper markets and I'm wondering if my equity would be better suited that way. Just looking for opinions and advice.

Remote rentals can be a drag. I would free up the cash and be ready for the upcoming opportunities. I'm a bit of a contrarian. I see that the economy will be propped up until the election, then a bit of chaos and then a decline for the economy for a year or so. In my world, that means distressed and foreclosed properties with a reduction in property prices.

The only thing I have to go on is experience, (been through a few down cycles) and a massive $34 trillion dollar federal debt. Gravity works. What goes up, must come down.

Also, ask a realtor in your next duty station how much a typical house costs, what the property taxes are, are they friendly to landlords or to tenants and how much the excise tax on selling a property is. Some states have an outlandish tax when you sell a property. You need to know that because you get moved around and you may want to rent out the house you end up buying in your next duty station at some point. You need to know all the numbers and all of the hassle.