All Forum Posts by: Martin Kruger

so @Jerry S. how is the plan coming a long?

@Jessica Ely best advise is go to the auction an experience it 1st hand.  Meet and network with the people buying properties at the auction.  See what they are doing, get their card, take them out to lunch and pick their brain.  Lastly know what you are buying.  You don't want to by a $20k 2nd mortgage with a 100k 1st mortgage in front of you on a $80k property.  I always pull a lien search on a property I am targeting.  Sure I spend unnecessary money but it saves me from a disaster.

In simple terms....watch, network, learn and verify.  Then make it happen...

@Ray Agosto every auction is different.  The terms of the auction should be available for review.  I would suggest you attend the auction you are interested in.  Meet the players, introduce yourself, get to know them, ask for cards, take them out to lunch.  They can tell you more about the auction and anyone on the BP site can as they have direct knowledge.  As far as PMLs go there are plenty of PMLs out there but have you met one?   Have you introduced yourself to one?  Do you have a portfolio?  What is your track record? Who is on you team?  Who is apart of your network? Most PMLs are not gonna give money to some geek of the street.  If you are in the game doing deals that is how you are going to attract a PML.  Doing good business and treating people right will get your name out there. Attract is the right word as you want to court them.  You want them to want to do business with YOU!  Once you have attracted one you would typically have a business plan and agreement already set with the PML before going to and auction.  On a potential property you would run the numbers, if the numbers looked good you would provide the numbers to the PML. and if the PML liked what they saw they would give you the green light to purchase the house at auction with there money and you would have your house without any of your money.  Of course you would be paying the PML monthly interest or splitting the profits but that is apart of using someone else's money...

Cash is cheaper than credit. 

Do you and your wife want to buy a house?  Can you guys carry both mortgages? 

There is no right answer as @Kristopher Hanks stated above.

Since you do most of the work will you only have 1 project going at a time or do you want to have multiple projects going at once?  

If you do 3 houses a year 1 at a time by yourself and can afford it I would use cash.  If you want to scale and do more than 1 at a time you are going to have to most likely have to use leverage.  

Personally, if I can afford it I would use cash if not then leverage. 

Sorry you too Wayne Brooks :)

Update. I went to the sale. There was one other investor there. The sheriff sale did not take place on the target property. So...not much to take away. The one thing I did learn was regarding the sheriff sale is they post the notice at the property and she had no record of them posting the notice at the property I was interested in. Therefore when I drive a potential property to look to see if it is or was posted. If not the sale most likely is not gonna happen. Well at least I learned something. The other investor was not much interested exchanging information for mentoring however we talked a little about his investing strategies. So I have some take aways from our discussion. He buys HUD properties for the most part then BRRRRs them and sells 3-5 yr later. Well I have 2 more properties I am interested in purchasing at sheriff sale. Pretty sure the sale was posted on one and I'm gonna drive the other on now. My postings no longer apply to the posting topic so I might start to blog or post about my experiences moving forward. Not gonna give up. Not a favorable outcome, however I did learn a few things. Thanks again Chris T. and Dave Van Horn for your time and contributions!

Thanks everyone. I'm sure on the numbers per the owner & encumbrance report that I pulled. In 2nd position how do I protect myself from the 1st mortgage from foreclosing and wiping me out in 2nd since there is a 12 month redemption period? Has anyone been redeemed on after purchasing a foreclosure at sheriff sale? What is the rate of return? I'm going to the auction/sheriff sale for sure. If not to bid just to watch, talk, learn, and network. I have a few more places I am interested in bidding in the coming weeks that are not as complicated as this one so it will be nice to be familiar with the process. There just seems to be so much meat on this bone I wish I had the funds and wherewithal to confidently move on this deal....

Rates will go up in my mind without a doubt in 2017.  Not really related to Trump.  The Fed is controlled by Congress.  Banks are screaming for rates to go up.  They (The Fed) will consider doing it in December if not then likely in spring of 2017.  Not by much, just a little bump to test the waters like dipping your toe in the water.  From there it will be a wait and see.  The main reason will be to keep inflation under control IMHO.

Hi Wayne - The numbers are correct per the title company Owner and Encumbrances Report. Not sure if the 1st mortgage was closed but not recorded, it was subordinated, or open with a balance. Yes the situation is odd with the size of the second mortgage and the amount of the pay down. I'm going to go to the auction this upcoming Monday. I have the capital but not sure if I want tie it up for up to 12 months or get caught in a quagmire. Half of me just wants to pull the trigger as there is little risk and experience is the best teacher. I'm sure I would learn a lot during the process too. The other half just says to spend the time, money and energy on other RE deals. The amount of equity in the house makes it a winning deal but not sure if it's more work than it's worth for a newer investor!?!! This is where I need a seasoned mentor. I have a mentor but he only has a few deals under his belt and and no experience in Sheriff Sales or buying 2nd mortgages.

Thanks Chris! I was in a rush to get out the door. Please excuse the poor spelling :)