All Forum Posts by: Mitch Messer

Quote from @Jacob Luong:

Thanks every one for your recommendations. 

Hey Jacob, I'm happy to share recommendations and contact info with you. You will need to reach out to me, though. (I can't DM here.)

My BP profile page explains how.

Quote from @Nathan Frost:

Hi all, curious on any advice or tips here.  Inspection was schedule for today but when the inspector / my realtor arrive the power is off.  They also noticed the furnace and hot water tank is missing / stolen.  Seller agreed to install a new hvac, hot water tank, and furnace before I can do the do the inspection now.  So the inspection is pushed back 10-25 days until those items get installed.  Sounds good since everything will be brand new but is there any other leverage I have.  This could take 2-3 weeks to get done since the seller is out of the country.  Can I get them to come down in price or get them to install motion lights / fake cameras?  What should I do?  Be nice to get them come down in price or give me seller credits.  Bonus is I am getting new HVAC, Furnace and hot water tank.  Just trying to see if I can use this to leverage my deal in any way.  Thanks.

If I'm you, the last thing I'd want is the seller installing an AC unit, water heater, and a furnace right before closing.

There's ZERO incentive for them to do the work with the same "love" that you would. Plus, you'd have no control over the brand, size, or capacity of any of these units.

First, I'd want to see quotes from reputable contractors. And then, whatever the seller was planning to spend, I'd have them pay that amount to me as an cash allowance at closing.

Quote from @Ilija Sladojevic:

Thanks for your feedback.

I will close those deals now, but where should I advertise these properties. I've started on Facebook groups and reddit. But besides that what would you recommend. Thanks.

For each deal you find, there are serious buyers nearby who are actively closing deals. These are the people you need.

You'll find them at the local real estate investor association (REIA) meetings, or the REIA FB groups.

You'll find them by talking to real estate agents who sell their houses once the rehab work is done.

You'll find them by checking sales data to see who's buying with cash in your target market.

They're out there. And, fortunately, you don't need many of them to be successful.

But, be very careful!

When you start "advertising" these properties publicly, you expose yourself to the accusation of brokering without a license. 'Cause you would be!

The idea that you need thousands of folks on your buyers list is a dangerous myth, promoted by gurus.

You would do just fine with a dozen serious local buyers.

And, they're already out there. You just have to find them and bring them the deals they want.

Quote from @Ilija Sladojevic:

I have a few possible deals lined up just awaiting the rights contract. But I want to build a buyers list first. Any tips?

Yes. Don't wait to get those deals signed up.

You build your buyers list by having great deals!

Serious buyers aren't going to get excited until you have something under agreement.

Quote from @Jonathan Greene:

Boom. The problem is that most wholesalers or off-market acquisition folks are being "trained" to follow a script, not solve a problem. If you just called someone up and asked how you could help them, you would be ten steps ahead of Bobby, who is stammering through the first line of a script from 1974 about a cash offer when the homeowner bought the house for 51k in 1978 and it's worth 804k (aka does not need cash, he needs a place to go).

Agree 💯!

Ours is a "people" business. We solve problems that happen to involve real estate. And, most times, we get to make money while we do!

I'm not a fan of any script or gimmick that gets in the way of an authentic conversation with a potential seller.

Warm 'em up with a joke, if it helps, but keep the focus on them and their problems. Then follow up relentlessly until their problem is solved.

That's the only training needed.

But, you can't sell that for $2997, so the gurus don't teach it. 😁

I'm hearing folks say: "I'll call sellers once I gain more CONFIDENCE!"

NO, you won't. That's not how "confidence" works. Trust me.

That's like me saying "I'll speak Spanish once I get more confidence speaking Spanish."

NOPE. You only GET confidence by DOING the thing. How ELSE could it work?

What you REALLY mean is this: "WAAA! I'm UNCOMFORTABLE talking to sellers!"

YES! TRUE!

So what? Who cares?

Not the seller. The seller has a PROBLEM. If they think you can help them, they're all EARS!

They don't care how YOU sound, how YOU look, or how YOU feel. They need HELP!

STOP making this about YOU!

Get OVER yourself.

SOLVE their PROBLEM!

Can I get an "amen?"

Quote from @Pat Arneson:

Quote from @Mitch Messer:

Quote from @Pat Arneson:

I've read a few old posts regarding this topic and have those documents in order, but I still have the following questions regarding a private loan (from family) --

Loan Documents for Purchase -

1. We have the promissory note, personal guaranty, and deed of trust(title/escrow to handle) ready to go. Does the promissory note and personal guaranty go to title or should I execute these outside of escrow?

2. Does my lender need to provide escrow instructions or anything along those lines? Can he just wire the funds to escrow, I sign the deed of trust, and that's that? Or, do he need to send some type of escrow instructions that outline 1st position, will fund after all docs signed, etc?

Loan Documents for Selling

1. What will this same lender need to provide title and escrow when I sell the property? Is it just a payoff demand and wiring instructions?

Thanks! This forum has been extremely helpful.

Hey Pat, regarding your docs for buying:

1. The promissory note and personal guaranty are private documents that don't get recorded. That said, I would still recommend you have them executed at closing by your closing agent, along with the other docs. I also recommend you provide two sets for signature, so that both borrower and lender get signed originals.

2. Your lender just needs to wire adequate funds to close. If there are other liens to be recorded, you should have already agreed as to the lien position this lender will be in, and the closing agent should know it.

3. Also at closing: You should provide your lender with a lender's title insurance policy, separate from your owner's title insurance policy. I recommend you as the borrower pay for this.

4. Also at closing: You should provide proof that the lender is named as such on a valid hazard insurance policy effective at least on the day of closing.

Regarding the closing to sell or refi, yes, your lender will just need to provide a payoff letter with wiring instructions to the closing agent. Post closing, they'll need to sign a cancellation of mortgage document or equivalent.

Thanks Mitch, this is great information! 

RE: Post Closing. How will the deed of reconveyance/cancellation of mortgage work? I figured that would need to be a part of the closing to remove that deed of trust prior to new ownership. Thanks again!

Technically, it's the responsibility of the lender to cancel the mortgage.

However, as private lenders we typically request that the closing agent draft the cancellation document and send it after the closing is completed.

The lender can then execute (sign, notarize & have witnessed) the cancellation doc and then return the original to the closing agent for recordation.

Quote from @Pat Arneson:

I've read a few old posts regarding this topic and have those documents in order, but I still have the following questions regarding a private loan (from family) --

Loan Documents for Purchase -

1. We have the promissory note, personal guaranty, and deed of trust(title/escrow to handle) ready to go. Does the promissory note and personal guaranty go to title or should I execute these outside of escrow?

2.  Does my lender need to provide escrow instructions or anything along those lines? Can he just wire the funds to escrow, I sign the deed of trust, and that's that? Or, do he need to send some type of escrow instructions that outline 1st position, will fund after all docs signed, etc?

Loan Documents for Selling

1. What will this same lender need to provide title and escrow when I sell the property? Is it just a payoff demand and wiring instructions?

Thanks! This forum has been extremely helpful.

Hey Pat, regarding your docs for buying: 

1. The promissory note and personal guaranty are private documents that don't get recorded. That said, I would still recommend you have them executed at closing by your closing agent, along with the other docs. I also recommend you provide two sets for signature, so that both borrower and lender get signed originals.

2. Your lender just needs to wire adequate funds to close. If there are other liens to be recorded, you should have already agreed as to the lien position this lender will be in, and the closing agent should know it.

3. Also at closing: You should provide your lender with a lender's title insurance policy, separate from your owner's title insurance policy. I recommend you as the borrower pay for this.

4. Also at closing: You should provide proof that the lender is named as such on a valid hazard insurance policy effective at least on the day of closing.

Regarding the closing to sell or refi, yes, your lender will just need to provide a payoff letter with wiring instructions to the closing agent. Post closing, they'll need to sign a cancellation of mortgage document or equivalent.

Quote from @Karl Acorda:

I'm looking for lenders who financing tiny homes for investment purposes. These will be multiple units at a time and built together on the same parcel of land. Land is already purchased. Just need a lender to finance the homes. DSCR or conventional loan is preferred unless you have other options.

In which U.S. state will the homes be located?

Also, will these be considered true real estate, or personal property (like some mobile homes).

Lastly, will each home be owned fee-simple, or will they be part of a collective ownership, like a condo or a co-op? 

Quote from @Laura Casner:

Quote from @Mitch Messer:

Quote from @Laura Casner:

Looking for advice on NDA's.  I have a deal and business plan that I need to source capital for. I need a large downpayment to close.  I'm concerned about a scenario where I show the property to a potential investor then that person with the cash to close circumnavigates me and approaches the seller with their own offer, swopping in and grabbing the property on their own.  Anyone have advice here? Does it make me look bad?  Does it turn off people from funding my deal?  Is it common?  Anyone have links to templates for something like this or a sample they would share?

If you already have the deal under contract, I'd recommend protecting yourself with an affidavit of agreement (AoA), rather than an NDA.

For one thing, the AoA gets recorded on public record and should therefore show up in a title search, preventing someone from swooping in and stealing your deal. The NDA is a private agreement and won't by itself stop a sale to another buyer.

I'm happy to share an example of our AoA. See my BP profile for the best way to reach me!

 I wasn't aware of an AoA - would love to check one out for the future. As @Arn Cenedella stated above - what concerns me most is that enforcing anything legal (in my experience) has not been worth the effort. If someone goes around my back and steals a deal, they still have the deal and now I have to go through the headache of enforcing the piece of paper I have. It feels like a false sense of security. Interested in your thoughts.  

Yes, signing an NDA is pretty easy; enforcing one is not.

An affidavit of agreement (AoA) is notarized and recorded, and also cross-references the deed, so it should pop up during a title exam and halt the sale.

We've used AoA documents for years (decades?) to protect ourselves. And yes, we've seen them work first-hand to ensure we are notified (and paid!) when someone tries to cut us out of our own deal!

FYI, here's an example of an AoA (NOT one of mine) on public record in Dauphin County, PA:

https://deeds.dauphinc.org/OnCoreweb/showdetails.aspx?id=350...