All Forum Posts by: Patrick Milia

@Joshua Martin Here's what I do. In google drive, I have a spreadsheet that I enter all new probate leads into, lets call it the master list. This list is synced up with a mail merge google doc, so I can quickly print letters after I add new leads. When I send the first letter, I type in the date the letter was sent into a column on the master list. Over the course of a month, I list homes from this list, people call and say remove me from your list, and houses are listed by other agents in the MLS.......as this happens, I remove these leads from the master list.

Every 4-6 weeks or so, I review the dates of the last time I sent the leads a letter, and if it's been 4-6 weeks since the last letter, I will send another one and type in the date the letter was sent into another column on the master list. Every time I send repeat mailings, the list is getting bigger and it takes me longer to print, stuff, stamp, etc. I think my next repeat mailing will be about 500 pieces. I started this the same as you, getting about 75 leads per month over 2 counties.

I'm thinking about putting an ad on craigslist and paying some $50/day once a month to come in and print, stuff and stamp these repeat mailings. If doing nothing else, they should be able to get that done in one day, and I think I am at that point where I can't do it all myself anymore.

@Mindy Jensen Thanks for your response, and I appreciate your concern. I used $60k to keep the numbers simple, but I would also cover all the costs that a seller would normally pay for, namely the real estate commission and the sellers side of the transfer tax. So that would get the fee down to approximately $42k......I know, still a big number :) Then I would pay any back taxes the seller had, which would further eat into the profit, and all this is assuming a $260k sales price. Maybe a better option would be to say my fee is $10k, and whatever amount the house sells for over $210k the seller and I split the proceeds 50/50?

@Lee S. Thank you. I have a commercial loan, hard money, transaction funding, and my own personal funds ready to go if I have to step in and purchase. The last thing I want is to ruin my reputation and not buy the house I say I'm going to buy.

@David Lichtenstadter I understand what you are saying, but let me clarify. This wouldn't be an issue on a double close, but it could be a problem if I tried to assign it and the buyer was getting a mortgage. What do you think of my idea above of signing an option to purchase with the owner, then recording something that would show up on title? The buyers title company would call me for a payoff, and then that fee would come from the sellers proceeds.

@Brent Hill thanks for your response. It would be so much easier if the end buyer would be a cash buyer, but I doubt that's going to be the case at this price point. I would have to check with the brokerage, but I did plan on paying a real estate commission to myself (as the listing agent) and whichever agent brings the buyers. Thanks for the head-ups on lender seasoning; I did reach out to my loan officer and he is looking into it with his underwriters, but the initial thinking on the double close is I would have to wait up to 90 days to sell it to an end buyer, and I might even have to wait until day 91 to sign the new contract with the end buyer.

Just thinking out loud here, but rather than sign a purchase agreement with the seller, I'm wondering if another option would be to sign an option to purchase with right to assign, then go to the courthouse and record a memorandum of agreement on the property. Of course I would let the owner I was doing this. Then I could list the house in the MLS, and the end buyer would have to sign a purchase agreement with the original owner. When the buyers title company checked title, the memorandum of agreement would come back and they would contact me for the payoff amount. Am I overthinking this?

@Jeff B. I appreciate your response. My MLS defines equitable owner as "A buyer who has signed an agreement of sale to purchase a property is considered the "equitable owner" of the property from the time the agreement of sale is fully executed by both buyer and seller until the settlement is completed. An equitable owner does not have legal title to a property, but does have an interest in the property that can be sold. As far as the MLS is concerned, if an equitable owner wants to list for sale or lease his equitable interest in a property with a MLS member, the listing may be entered in the MLS."

Hello, those with experience wholetailing please chime in, as I have not completed this type of deal before. I'm trying to wrap my mind around what the purchase contract and settlement sheet will look like on a wholetail deal with the end buyer getting a conventional mortgage. 

Here's the hypothetical scenario; house under contract with the owner for $200k. Once the purchase contract (with assignment clause) is signed between the seller and my investment company, I'm going to immediately list it in the MLS (I'm also a licensed agent) for $260k in it's current condition. The house needs a little updating, but nothing too crazy, and I have comps that would support a $280k to $285k ARV.

The end buyer is NOT going to be an investor, it will most likely be an owner occupant getting a conventional mortgage. Do I, now being the equitable owner, sign a new purchase agreement with the end buyer at the $260k sale price? Or am I just signing an assignment agreement with the end buyer that includes my approximate $60k fee?  What would that even look like on the settlement sheet? I feel like the buyers mortgage company would red flag that and not let the loan go through.

Alternatively, is a double close the only way to wholetail a deal to a buyer getting a conventional mortgage?

Your responses are greatly appreciated.

Thanks for your reply, Adrien. Because the township and county tax year just ended a few weeks ago (and they are the generally much lower amounts in the area I'm marketing to as opposed to the school tax amounts), I'm running into very small amounts......like $10-$50. I can't see someone agreeing to sell me their house if they are only a few dollars behind on taxes, but I agree with you that it could be an indication they are delinquent on other bills. I'm just going to send to everyone and track the results. Thanks again

For those that market to owners with delinquent tax bills, what is the lowest amount due that you would still market to? $500? $1,000? Some other amount?

Thanks in advance

Thanks Wayne. Would you personally only consider a sub2 deal if the house had equity?

Thanks Charlie, I wasn't aware about what you said regarding 12 months. It might not make sense for the buyers to refi; the loan balance is in the $130s but the house is worth less than $100k right now, with values continuing to fall.

The answer seems obvious to me, but I'll ask the question anyway. When a seller deeds their property to a buyer subject to the existing mortgage, that mortgage stays on the sellers credit report until the loan is paid in full, correct? I have a seller trying to decide what's worst; walking away from their house, losing it to foreclosure and having their credit hurt for 7 years, or selling the property subject to their existing mortgage (which still has 21 years left) and having that mortgage hurt their debt to income ratio for all other purchases for the next 21 years?

Welcome @Robert Kershaw!