All Forum Posts by: Peter Giardini

Jozef,

I am not sure what "short sale" CD you are listening to, but as you can see several other posters have indicated that HUD/VA and short sales are not compatible.

With that being said... there are methods that can be used to "assign" a HUD/VA contract to another investor.

These include forming a single property LLC and then selling your ownership rights in that LLC to the end buyer (they then purchase the property), doing a double close where you use transactional funding to purchase the property and then sell it to the investor buyer, and also substituting the end buyer onto the contract once the price is agreed upon and collecting your wholesale fee outside of closing.

Each of these approaches has their own pluses and minuses and having a title attorney who knows what they are doing in this regard is critical.

Pete

Shawn,

Great topic!

For me... I came from a family where neither parent worked. Yep... one of those rags to riches stories.

It wasn't until after I was out of the Navy and into the "real" world that I saw the possibilities of being an entrepreneur.

I spent 14 years helping someone else build their business which he ultimately sold for many millions. Even while I was helping him, I still didn't get it.

To be frank, it wasn't until I read Rich Dad, Poor Dad, that things started to click.

And... that is how I got into real estate.

Once there I quickly learned that as real estate investors we are out there on our own. I have since learned that every business owner is on their own... because it is lonely at the top.

That is one of the great things about Bigger Pockets and sites like it... we don't have to feel alone.

In addition, I would recommend joining your local REIA if you haven't already and also look for other networking opportunities in your area. Even if they are not real estate specific.

Every business owner experiences that same stuff everyday... it is just cloaked in different business models.

And lastly, I wrote an article a couple of weeks ago discussing who we asscoicate with, which I have reposted to the this Bigger Pockets link... http://www.biggerpockets.com/articles/1250.

Best of luck to you...

Pete

Michael,

Welcome aboard...

Tim,

Without writing a book... the only deals that any wholesaler worth their salt would be assigning are deals that came from very motivated sellers.

Every wholesaler knows that if the deal is marginal and they attempt to assign it to an experienced investor... they more then likely will end up buying the same crappy deal they were trying to sell.

Motivated sellers = great deals that can be assigned with significant paydays for all involved.

Pete

Jeffery,

I was drawn to the last paragraph of you last post... "having a lot of resources can be an obstacle to learning this business".

If you are speaking about financial resources you have learned a great lesson fairly early on in your investing career.

In my experience investors who are starting out and have a lot of money... usually make the least profits.

The reasons... they overpay because they can... and they keep throughing money at their renovations because they have it.

Good luck...

Pete

Ryan,

I must respond to you situation regarding being tapped out in the 'conventional" world of financing.

If you haven't already, I would recommend that you learn to deal with commerical loan officers at small local banks... once you create a relationship with these small banks you will be able to unlock funds and accelerate your business.

I have just started multi-part article on how to create these relationships with local banks. It has been posted in the Money & Finance section.

Hope this helps?

Pete

Lon,

Do you have existing relationships with one or more lenders at this time? If so, it would be easy to just call them up and ask them how they would need this deal structured.

If not... you should consider getting started on these relationships now so that you don't have to guess how to engineer this transaction.

With that said, and assuming that this is a deal (meaning is has a debt to coverage ratio of at least 1.25) at $1.6 Million then here are a few thoughts...

Most lenders will lend 70% to 75% of the appraised value. So you would have to come up with 25% to 30% in cash for the downpayment.

Also, most lenders will allow a 10% to 15% seller carryback (assuming that the debt service on the first and the second don't drive the debt cover ratio below 1.25. (if you find a lender who is comfortable with a higher carry back percentage that would be great).

So... the combination of your 5% and the sellers 15% would give the loan an 80% combined LTV. This gets you close.

Then, assuming you have equity in your other building... or not, I would try to cross collateralize that building to satisfy the remainder of the lenders requirements.

You will also need funds to conduct the actual closing... I would assume 5% to 7% for due diligence, attorneys and recording fees, etc.

Some of these funds could come from the security deposit credit that would accrue to you at closing... if you were so inclined.

With all that being said... I am only guessing at how to structure this deal and would recommend that you seek out one or more local SMALL banks, take the commerical loan officer to lunch and see what they recommend.

I am anxious to see what some of the bigger national players have to say about your request.

Pete

Jamie,

Everyone thinks that nothing moves during the fall timeframe. In reality, some of my best selling has happened in October - December... which surprised me.

This year I believe it is especially critical that you get your properties on the market as soon as possible... due the fact that we don't know if the $8K grant program is going to survive December 1st.

Pete

Everyone of these posts are fantastic.

I would add that more stringent screening at the begining of the tenant selection procress might have shown some light on who this tenant really is.

Also, I would recommend that the tenant be asked to do a formal walk-through to inspect the unit and have them record the results in their own writing as a record of the condition of the property when they moved in. This would have helped to address the oder, AC and basement issues... and it provides great baseline when it comes time for them to move... as it is hard for a tenant to claim the unit had a pre-existing condition when they didn't find and note it upon move in.

Pete

While I totally agree that the lending market has changed drastically in the past two years... if the subject of refinancing is approached correctly... there are many lenders who will do these deals.

The key is finding the right lenders and creating a relationship with them prior to needing their money.

Many investors have either tried to obtain funding using mortgage brokers or by approaching large institutions like BofA or Wells. This doesn't work. These banks are too big and in almost every case you will be speaking to residential loan officers who in my experience don't know what to do with investors.

The approach that has allowed me to obtain funds almost at will... yes even in todays market, is to create relationships with commerical loan officers of small local banks. These banks will have Savings and Loans or Community Bank in their name... and they keep their loans in their portfolio, allowing them more flexibility in their underwritting.

I will post an article on this subject later today outlining the steps every investor should take to create these critical lender relationships.

Pete