All Forum Posts by: Nathan C.

@Shawn Lowery Thank you for sharing Shawn! There was a lot for everyone to learn through your post. Learning about your relationship with your contractor was my favorite part!

@Jordan Santiago Congrats Jordan!

@Jack Clough Great work Jack and Francis! It appears to be a great property that your team worked quick to finish. Good luck on you next projects! Let's talk soon and catch up.

Nice finishes @Francis E. Bromwell JR.!

Thanks everyone for considering this one. I thought it was a bad one too. I actually called some of my contacts (remember? learning on this one is more important). One person said that if I can convince the bank to JV with me and essentially pay my holding costs, it may make more sense because ARV after ~$15k of work is $205k.

Another tool that I was reminded of is the heir's ability to deed in leau which the bank seems to be salivating to have signed. Maybe that's a tool? Do people buy the ownership in these situations (essentially to an underwater property that is non-recourse) and use the deed in leau as a negotiation tool to make these work? Just thinking out loud. Probably impossible.

One point to this story: no one lives in it. Heir is just needing to complete the estate sales and disburse proceeds. So no moving expenses.

@Tom Gimer Heir is owner now; probate is complete however now the loan is non-recourse. The heir is willing to deal with 1 buyer (me) or let the bank have it. That's why she doesn't want to put it on MLS. I think you're right though, this one is tough to find something in it.

@Nikia Johnson

Hi Nikia, 

I invest in JAX and was wondering if you have any people you'd recommend for septic and well work. Inspections, maintenance, etc... A bit about your experience with them would also be helpful!

Hi BP community,

I've been working with an heir to a house in Jacksonville FL (32225). I included a picture below for those who are curious.

She inherited it, it has a reverse mortgage that has the following characteristics:

• outstanding balance: ~$199k
• appraisal: $175k
• foreclosure extensions have already passed and the door is open for the company to file the first set of docs with the county when they want.

Being that it's an inherited property/mortgage, it's a non-recourse and therefore she doesn't see the use in marketing the property for sale, spending all that time(, lockbox, etc hassle) when she will not benefit from it in any way. We both think in its present state, the property could fetch approx $180-185k. From what we understand, since $185k is short of the amount outstanding, that would constitute a short sale and all proceeds would go to the bank.

I am wondering: is there an opportunity here?

• Appraisal is $175k
• Bank will accept $166,250 (95% of appraised value)
• Bank allows for 6% sales commissions

Although there might, at best, be a small opportunity and a small profit would not justify the time spent, I would place value on learning through this situation. Therefore a small financial gain + learning is worth any extra effort in calling people who can help, conversing through BP, more due diligence, more legwork etc.

I'm looking for advice from those who have experience with RM short sales on: possible ways forward, people to call to learn more, things to check up on, ... any advice, thoughts, or questions.

Some ideas I had so far:

• Find an investor who will buy it for approx $170k. Seller wants some $ for her time. I want to recoup some $ for my time and $ invested so far. Very unlikely to happen given thin margins.
• Find realtors who will represent both sides. This will release $9,975. Pay the agents for their time (thinking $1000 total) DISCLAIMER: I have never bought any property through agents. I always go direct to sellers and therefore I hope you can forgive my ignorance here if this is illegal or against certain rules (all agents might be laughing right now). Property now bought for ~$157k (I will disburse funds to the seller separately from this purchase). 
• Let the deal die. Tell the owner that they would be best to let it foreclose. She was ok with this from the start. Least exciting option for me because I don't find a way to proceed in these situations and the owner didn't gain much.

@Aaron Ford I'm dealing with a RM also. From what I'm learning (i'm still learning), it seems that RM with FHA guidelines only allows a short sale of 95% of appraised value. It looks like at least in my situation, I can offer no lower than that. If no one makes that offer, it goes to foreclosure.

When you say worth, do you mean the appraisal that was done in the last 60 days is 495k?

We get a lot of calls from owners who want to sell their properties directly to us. Here is a list of questions I like to ask:

1. How soon are you hoping to sell?
2. How much do you think your house is worth?
3. How much would you like for the house?
4. How much do you owe on the property?
5. Are you willing to sell the property for what you owe on it?
6. Are you willing to provide seller financing?

Note, these are very typical questions that are asked on these calls. I am not the original genius who came up with these effective questions.

@Jack Clough Thank you for the inspiration. 

How did you end up partnering with your contractor/construction company owner? 

Did you meet him with that intent or is he a friend? 

How do you split the costs, equity, etc when construction is that large a percentage of the total cost?

Hi Aaron,

I went through this before and have not yet figured out when to transition. A CPA & lawyer said that the LLC is not needed until you have something worth protecting. I have seen others do LLC early because their projections and plans for growth were very quick and it didn't make sense to switch everything within less than 1 year. They had a solid plan to finance everything through the LLCs (using 5 yr/ 30 y AMM loans).

Could you walk us through your perceived benefits of putting the homes in LLC's while you're still small?