All Forum Posts by: Kevin Romines

Hi Kimberly, and welcome to BP.

You mentioned that the house is under water, so depending on how far under water will tell you if there is any salvagable deal here or not? You say the numbers look good, so I assume that your referring to the monthly payment compared to what the market will bring for that house on a lease option or some sort of contract?

If you can make some sort of spread on the monthly payment, then you would need to have this on some sort of long term lease option or contract to your end buyer, or you would need to buy it via a contract and hold it until your not under water? Its risky because your betting on appreciation at this point, however if you can cash flow enough to make it worthwhile then you might consider it.

I'm not sure if Illinois is a judicial foreclosure state or a non-judicial, my state is non-judicial, if yours is the same, then you can bring the arrearage current to stop the sale no later than 11 days before the sale, however I have done it 1 day before the sale by communicating with the trustee that handled the sale.

With the time that you have left, you could market for your end buyer and with their down payment or option funds, you could use that to bring the property current and stop the sale.

If the property goes to auction and reverts to the lender, they will then put the property into the REO dept. and it will come out some months later as a listing by a realtor typically close to full market value. So no chance of a contract at that point, you would need to get a loan to purchase the property.

Hopefully this helps a little?

You can still make a deal out of this. I would put it under contract for the best terms that you can negotiate. Add your fee on top of the price and market the new contract out. I would find out the requirements of the park, so any potential buyers can be screened to those requirements and then find your buyer and close the deal. If you dont find a buyer, use your out clauses in the contract and your out nothing more than your time and what money you may spend marketing the property.

This is a discussion that you should have with your lender. I would also consult with an attorney that deals with landlord tenant law to see what options you may have to get one of the tenants out? Although that is a moral issue as well?

You could also offer a tenant an incentive to move, its cheaper than buying via Fanny / Freddie with their down payment requirements?

All lenders that do non-owner occupied loans require reserves for each unit you own. As far as stocks go, most lenders will allow the use of stocks as reserve, however they will look at current market value of the stock and only count 60-75% of the value as reserves. This allows for some typical market fluctuations.

Have you considered buying the property using an FHA mortgage? Maybe an FHA 203k which allows you to buy the property as an owner occupied property and will also give you the money you need for the rehab costs. You can do this loan with 3.5% down and once the rehab is done, you can refi it into a conventional loan with better MI or no MI requirements.

Just some food for thought?

Hey Denny

Glad to see more local investors coming onboard. I somewhat regularly attend an investors meeting in Vancouver at the Gobi grill every Tuesday at 12:00 on Mill Plain Blvd. There are typically 12-25 people that show up to any meetings. Its a good place to discuss deals and network. The group is called the REVIN group.

Maybe I will see ya there one of these Tuesdays?

You can either market like a wholesaler or find a couple of good wholesalers and pick up a deal from them?

Wholesalers market to owners that dont have their properties on the market, they find motivated sellers and craft the deal from there. If it were me, I would spend some time looking over the techniques of wholesalers and decide if you want to go about it that way or just find a good wholesaler and pick properties up from them?

As an agent on the left coast I must say what we always think about concerning our clients welfare. Therefore I must put you in the claim.
OK, something happens and one of the kids get hurt and is pemanently damaged or has a life long injury because of the event. The parent will start by looking to your tenant and the business, but they will find no insurance. They then will look at you and your insurance. Your coverage may pay to the extent of your liability coverage, or they may deny the claim? The injured party will also look at the daycares assets as well as your assets. They will file suit against you and take your assets. You were fully aware of the situation and didnt demand coverage or evict the tenant.
Basically put, are you willing to lose everything you have worked hard for over the years, all because she didnt comply with your requests for coverage and you didnt enforce the requirements. Thats what your really saying here, she doesnt have adequate insurance coverage, so therefore I'm going to allow her to risk everything I have because she cant pay the additional costs. Personally I wouldnt take on that risk?
She has to realize that there are costs of doing business, and that if she intends on making her living in this way, she also needs to run it professionally and pay the costs to protect those kids, families and you from the liability that she has taken on.

Just my opinion.

Hi Bill

The policies would be written in the LLC's name and extend the liability off your primary so long as the LLC is a 1 or 2 member LLC that is soley used for holding real estate. If you have more than 2 members and they are not family, or if the LLC engages in other activity besides holding real estate, it would then be written as commercial.

Hi Bruce

Can I ask why you dont want the note to show? Why wouldnt you record the deed of trust and disclose it to the lender and plan on subordinating it? I was lender for 18 years, if you give us more details about what you are trying to accomplish, we might be able to advise you better?

Some company's mine is one, will extend the liability from your primary residence to all your rentals. So lets say you have 1 million liability on your primary residence, for 18.00 per year per property that you want to extend to, you can extend to all your properties, with no limit on the number of properties. This typically saves you 80-100 per year on each propety. You can even do this if your primary residence is located in another state from the rentals. Its all a matter of how the companys structure this part of their coverage's.