All Forum Posts by: Rich O'Neill

Hey @Brandon Bellino, 

Welcome to the site and congrats on getting started! I was in your same shoes in college and my biggest regret was not actually doing any deals. I am just now getting started 3 years later and I kick myself all the time for not jumping in earlier. 

If you want to start direct mailing, list source is a good place to start. Look for high equity and possibly absentee and/or trustee owned. Once you have that list, you may to well to drive by as many of those properties as you can and see if there are any signs of vacancy or distress at any of them. Overgrown grass, junk in the yard, lack of maintenance, broken windows, etc. Then write letters to those properties. This will keep your mailing costs down and give you a more targeted list. The hope here is that these are high equity properties that people have either lost interest in, acquired in an estate, or some other scenario that makes them want to sell. 

In your letters, I would not start with anything about owner financing. Build the relationship then go into it. 

One good tool you could use if they are a bit hesitant is to suggest that they originate the note, then sell the note on an exchange like FCI Exchange or something similar. Just because they sign a 10 year note does not mean they are locked in for 10 years. Sell that note to another investor and cash out. This usually requires about 6 months of seasoning to work but position it as a way to sell their house today, earn some money on their money, then cash out in a few months. It really is a win win for everyone. 

I hope this is helpful! Let me know if you have any more questions. 

Hey @Abou C., 

Having a deal on the hook will definitely help sweeten the deal for a potential investor. Then your deals are less hypothetical. Legally it depends on how you are structuring the capital. Are they an equity or debt partner? With a debt partner you can simply write up a note and do the deal. With an equity partner you may want to talk to your lawyer about forming an LLP or something similar.

Other things to consider: ALWAYS be CRYSTAL clear on roles in the deal. If this line is blurry, you could cause struggle in your relationships and that is obviously no good. If everyone knows what they are doing and what their job is and what the expectations are then you are less likely to run into problems. Most importantly, make sure your investors remain whole in all of your deals. Losing them money is a quick way to run yourself out of business. Even if you have to take a loss to make them whole, it is worth the little money you lose to be able to continue to do business with them. 

Hope this is helpful! Good luck!  

of course! Good luck!

got it! Yes your lawyer will definitely be the best source for that info, but 60 days sounds appropriate. 

@Audrey C. what type of info are you looking for?  

@Peter Vekselman You don't think a bank would do it in a double close scenario? In that case there would not be an assignment fee on the HUD1. Or if the buyer paid the assignment fee out of pocket not to be considered in the transaction? I am sure that at that point you run into "are you a broker or not" issues, but I am curious your take. 

@John Rogers I agree with the subject to comment, however, you need to be VERY careful. You as the buyer need to have a system to make sure the mortgage is actually getting paid (pay the bank directly, etc.). You should also put a system in place for the seller to see you are paying their mortgage whenever they want, and a way to foreclose on the property if payments are not being made.  

Subject to is an excellent way to preserve the seller's credit in a low equity situation by avoiding a short sale or foreclosure, and it allows the buyer to purchase without credit. The problem is that some shady folks have used this method to do bad things like take ownership of the property, collect rent for a few months and not pay the mortgage, then leave the seller high and dry. 

Definitely use the strategy, just approach with caution. 

Great strategy @Tim Maciasz! Keep building up that equity in both properties and some day you will have one hell of a nest egg to let you do whatever you want! 

Happy investing! 

No Problem @Tony Roddenberry! Happy investing! 

@Alex J. I am pretty sure you do need a license to manage properties for others in Texas. Managing your own properties obviously does not require a license.