All Forum Posts by: Nick Sabat

@Alex Calderon sorry to see you didn't get much of a welcoming here - I'd say welcome to the site - but looks like you been here longer than me.

How did everything fare for you? Have you gotten the answer you were looking for? How to apply your skills to something for yourself, rather than your boss? Were you looking to invest in Real Estate on your own?

Seems to me, you would have a good start, being in a larger company to do Real Estate work in. I would assume they keep a lid on things so employees can't spin off their own companies to compete with them. If so, that's a shame in many ways.

Doesn't give much upward mobility to the employee and they could be missing out a lot cause if the company isn't willing to give, neither would the employees, (be willing to give!) In any event, hope you have found a great deal here to help you in your quest.

@Michael DeFrancesco first welcome to BP. Secondly, sorry to hear of your loss of employment. 

Nice to know you were able to secure an education - finance can bring you into any area of Real Estate - I would imagine. Analysis, Brokerage, Appraising, in-house accounting.

I would imagine the question of what area you have been looking into, has been asked in a couple ways, already. I see you are interested in investing and I'm guessing that this is the route you wanna go - cool.

As with your oil and gas education, you learned the specifics of the field. As with this, there are many specifics to familiarize yourself with. You took the first step - you looked into it and found this site - you joined and asked questions - cool! Again, it all depends on the specific area you wanna get involved with - someone said Read, Read, Read - not a bad idea.

Now, here is the ticket - interest! As long as you are interested in whatever you do - you will get the most out of it - as an aside of your education, you already got a leg up on decision-making - keep the bad decision making to a minimal and I think you will do fine.

Building Assets comes as you move along - if you mean by building assets, keeping them rather than doing flips - then some suggest you start with multi-level dwellings and others suggest single family - others may suggest Commercial Properties - only you can decide where you really wanna start - in any event - Best of Luck To You!

@Crystal Smith HUD properties will indicate whether it is owner occupied or all bidders allowed. Tried my hand @ a couple HUD bids, but when you get beat out by a dollar - you start to wonder whether it's worth pursuing or not.

But, good luck to anyone who does this.

@Richard Balsam I just elaborated on something similar to what you are saying about the 2 attorneys you have contacted - I do not believe anything has changed - I just think that they or someone they know attempted a double close or even a single all in one close - where the potential buyer dealt specifically with the seller with the assignee (the person putting the two seller/buyer together) all in one room and the seller seen what went on - someone made out on them and they did not get the best deal for their property and they called foul.

Ever watch pawn stars - they bring in an appraiser and they appraise the item in front of the seller - the appraiser gives a high price on the item and immediately the seller wants that price for the item they are selling. And most often upon receiving news of the appraised item - the seller doesn't end up selling it to the would be buyer cause now they want the appraised price. Never could understand that one - to sit there and give up your Aces in the hole.

But the trick there is - they do not show you the conversation they have with the seller prior to appraisal - that is if we get this item appraised for you and you do not sell us that item - then you must pay us an appraiser fee of x amount of dollars for that appraisal to the appraiser not us.

Anyhow, with more and more people wanting to flip paper more and more people who are selling are becoming aware of the fact that someone is out there trying to take advantage of them - that is low balling the price so they can make money on the spread between what they are being paid and what the so called wholesaler is selling it for. Thusly, more and more complaints to the Real Estate Commissions and the tighter they apply the law.

As for your Grey Area of the law - yes you are selling the paper, not the property and wording as well as informing the seller of your intent makes the deal a little easier to get passed. Also, you may wanna look @ your states Real Estate Laws - where options are used - they may be included in the wording of that RE law somewhere. Just a word to the wise.

The best solution is to work closely with an attorney, so that you stay in full compliance of any law.

Nothing here is given as legal advice. It is for informational purposes only. Also, it is an expression of my opinion on the subject matter discussed.

I don't know, always wondered that myself - without a license you stand a chance of going to jail or paying a big fine. With a license, you stand the chance of doing the same, when wholesaling houses.

With a license, you by law, as far as I know, are required to get the seller the best possible price for their property. This is why you have to do "cost analysis", "comparative market analysis", etc. etc.

Telling a seller "you" will "buy" any house in any condition knowing that you are not the one to keep it but are immediately going to flip it - is well in my opinion, it's not only unprofessional but fraudulent. You have intentionally low balled the price so you can pick up any major difference in the market price and you are also collecting on the brokerage fee. Unless you are brokering on the buyer and seller side for just what you get out of the deal. The fraud comes in by manipulating the price and telling the seller "you" are buying the house.

Now, if you are buying houses, fixing them up, then selling them - totally different story - than just flipping paper. If the laws in your state permit making paper deals without a license, totally different story here, also. But I would believe in most states, if not all, they highly regard and protect the sellers interests in their property, so that namely they are not cheated out of what is just and fair, when selling their properties.

Now is there a workaround to any of this? I am sure there is, but you will have to familiarize yourself with your state's laws or hire an attorney. This to me is the best way to get the information you need.

Then there is taxation - which is better to do for you? In all manners of business we have to consider paying higher or lower taxes. Not to mention double closings - in some states they are illegal? I don't know if the double close is illegal or they are just frowned upon. But, again the best suggestion anyone could make is, if you are not familiar with your states laws, then the best thing is to get familiar with them, by reading or hiring an attorney.

Good luck - nothing here is legal advice or offered as such, It is for informational purposes only and to put forth my ideas on the subject matter discussed.

Another post that brings up a whole lot of other questions - my first question is did they leave on their own? Was their lease still valid, even though you bought the house they were living in? If they still had the keys, then presumptively, they still had legal access to the property, last known legal address - no trespassing.

Were they paying the previous owner on time all the time? Were they problem tenants? Etc., etc.

As far as moral aspect goes, once again, a number of questions have to be answered - I know me personally, would have known prior to packing all my stuff that the other house was still available - the person that rented that house to them needs to be held liable - not on your part but theirs. To me that is a pretty debasing situation to put someone in - let them believe they have a place to go, when they show up give them the boot. Not Cool!

I would say this to you - use your better judgment. Do not do what the other landlord did - put them out without careful consideration of all the ins and outs of this situation. Acting irrationally may get you jammed.

The biggest question is what legal rights did they have? Again, they were not thrown out, they were not evicted, they moved on their own, they had keys, this was their last known address, etc. etc. Woking things out with them may be best. Did they pay rent on time all the time? Were they good tenants? Did you look at the property? Was there damage that was a result of their living there?

Given as suggestions only - this is not advise.

No Friends or Relatives - they think they know your pocket more than you do. "Well you got the money, you can wait, my kids need new school shoes!" This may seem callous but do not learn the hard way.

2 years on current job is not unreasonable to ask - someone with a rocky job history will, well, go through times with no money and rent usually seems to be the first to get put on hold.

2 income earners is even better. And as for your question as to how often to inspect your property - generally, a lot of people I know do every 30 days first 6 months - after that you can go to 60 - after one year every 6 months.

Any key points in the lease, like "cut the grass", "inspections" you may wanna go over clearly and have them initial those clauses - this way if and when something occurs - they can't say "well you did not tell me this". You pull out the initialed clause and say - you initialed it. If an SFH (single family house) most people require the tenant to cut the grass or keep up with the landscaping - otherwise they get charged for servicing the property's landscaping.

If no animals or no waterbeds, make sure you are abundantly clear on this. Ever really read your insurance policy - there are so many exclusions that are clearly defined that it is hard to tell what you are insured for! I'm not talking this clear but make sure you get the initials on things that you really are firm about.

No subletting, no guests more than 2 weeks - if an additional person moves in, not on the lease, then, you want x-amount of dollars for this new arrival. Have them initial it! Late payments, etc.

Do not give the keys up til you have all your money you are asking for upfront.

These are suggestions you may use - nothing is given for advise. They are things I and others I know do. You may use this information to get an idea what to do yourself - you are bound by nothing here. Good Luck!

@Account Closed - one of the first things I see is that you are not familiar with bank processes - 25% down on an investment property is not bad - some will only lend as much as 65% of the property value.

The next thing I don't see is what each unit is bringing or what condition they are in. Then I see you think that everyone has to be making over $100,000 per year to invest. Not so and it is hard for anyone to give you a direct answer without knowing more.

As far as the bank requiring 6 months of mortgage payments saved - well, they are permitted to have their own guidelines. This is to me not unreasonable, to say the least. But there are ways around it.

Assuming the units are full - how long have the tenants been in there? If one or two have been there for two or more years, it is highly unlikely that they will be going anywhere soon. What are the rent payment histories? For instance, have the tenants been paying on time all the time or has the property owner carried arrears for a time or two?

What is your income? Banks on SFH (Single Family Homes) that you will live in, will generally give up to 2.5 times your income. Are you a veteran and do you have benefits?

There are a lot of unanswered questions here. As far as NO MONEY DOWN or no money out of your pocket methods there are plenty. I think someone mentioned owner financing, which brings up another question - does an individual or group of individuals own this property or is it an REO (Bank Owned) property?

You questioned private money or hard money and the shortness of those sorts of financing(s) and possibly the expense of those sorts of loans. BUT this would give you opportunity to build up equity in this property and build up your 6 months worth of mortgage payments and if this is your first deal and if this is what you really want - I do not think this sort of hurdle would be hard to overcome.

Good Luck and hope you get the property!

I'd go with the rainy day budget suggestions - savings or emergency funds. Years ago they used to suggest 3 months savings to cover all your expenses in a down market - then they suggested 6 months, now they suggest 1 year of savings to cover all your expenses. 

While dealing with multiple mortgages and multiple properties, this may seem a bit extreme but if you are doing what needs to be done rather than spending your rental and other income as soon as you get it - this suggestion is not impossible to live up too.

Multiple evictions may not seem unlikely in a downed market. No matter how many units there will probably be a percentage of vacancies. Even when times are good, vacancies occur.

But as far as serious risk - I've been through up and down markets and I lost my stocks, even lost a property or two - but all in all without my properties, I would probably be looking for a place to live myself. As for my stocks there was nothing to save them - as for my properties, money management was a real problem then. Had the money been managed better, I could have saved those properties.

Even though I knew what to do, I still had to go through the process of loss to realize how dumb it was to allow so much personal spending to go on and rely on rental incomes to come back and do it all over again - it was sort of living paycheck to paycheck. Now the rainy day fund sits quietly in a coffee can buried in the back yard < jokingly. Personal spending is under control.

To me, what it all boils down to is good decision making. Whether in stocks or real estate, good decision making is key to cutting losses and reducing risks.

Thx @Jack Butala Yes, I noticed this is a fairly good site. Informative and we have the ability to give input and receive input, interactivity - so to speak. Plus the other features like a Marketplace and Tools to use in our businesses - if we so desire to use these functions. Again, thx for the welcome.