All Forum Posts by: Ray A Delfi

@Cristina Ortega hey Cristina, congrats on the deal. Are you an agent? You mentioned you had showings, was the home vacant? How did you advertise the showings? Were any agents or brokers involved with the deal?

@Christine Kankowski it's just that simple, get a lawyer, however if you have the cash flow or funds available to recover that loss and compare the cost of litigation with the funds needed to recapture that loss it may just be cheeper to report it as a loss. I've never had this issue with my property managers and I've transitioned between 3 in the last 13 years. But has me thinking if I should confirm the securities are in an escrow account and possibly have a trust manage that account providing a POA to my PM which I could terminate before the turnover.

@Don Konipol great advice here, thank you. But the 8k is not a down payment, it was an offer we gave the seller to give us title subject to the existing mortgage. We chose this strategy because we would be able to take control of the property and either BRRRR or Fix and flip with very little cash invested. Cash on cash ROI is my goal in the beginning as the numbers looked good and the equity in it with a little TLC would have paid for its self 5x over when sold or refinanced. But the numbers don't add up for us and is why we may let it go to a Investor with "BiggerPockets" that can turn it into an awesome shortTerm rental. again thank you, I did learn something from you post but I don't think it applies to this strategy, correct me if I'm wrong please.

$8k is the amount we agreed on from us to the seller and if closed that is when he would get the payment. He’s currently reviewing the contract with his attorney, and are only doing our due diligence before he actually signs. He’s been very transparent and providing us his mortgage statement tax bill and we have been reaching out to the local realestate agents to get a fair market value. But no, that is not the way it works, no one should ever hand over cash to anyone with out having an attorney and through an escrow.

@Steve K. Thank you those are great points and confirming what I figured the market was like in that area. The deal has been slipping away the more I’ve been digging in. The loan balance is way to high for me to be comfortable with. Even the rental market is to close to the mortgage payments. Another thing I discover is that he may be in a loan modification and that may increase down the line. And to add more to it, his veterans exclusion is 40k, if we loose it, it will increase the taxes by almost $400 a month. $8k to take control of a property is very tempting but not worth it in the long run. If he’s going to try anything with it would be to assign the subject to contract to another rehaber or Short term rental investor, but as you said they are dwindling. Thank you steve you gave me a exactly what I was looking for

@Adam Gollatz sorry had to read your message again. Jumped the gun on my response. So if we sell it as is on the MLS yes the value after a light rehab would be around 190-210k. But we hold the risk of the holding costs. We ran some comps with an agent today, but its so hard to trust them, and I'm the third party (funding partner) in this position, so the risk is all mine. If the roles were in reverse and I was the boots on ground then I would feel a bit more confident. However, there is so much that can be done to this property with the amount of land and the style of home that we wouldn't be able to fund ourselves but would be great for a rehab if we assign the Subject 2 to a reputable fix and flipper for 20-30k as they can bring the value up to $400+. We looked up A-Frame houses online and the designs that are out there is incredible. Our main focus is to help out the seller, get the property sold and get him out of this mortgage and make a few dollars and provide the end buyer the opportunity to make even more.

@Adam Gollatz no, $8k to seller to take title, and keep mortgage in place and light rehab for for sale on MLS or wholesale to an investor.

Hello all. I wanted to share a project that a fellow BP Member had brought to me and asked for some guidance. @Albertinny Colin asked for some advice for a lead he receive but I was able to tell this was probably his first. We dug into this property ran some numbers walked him through the analysis process and even exchanged some great brainstorming sessions over the phone. What we came up with is the following. I’m looking for a second set of eyes on this and appreciate everyone’s feedback in advance.

The seller has accepted $8K to walk away from this property subject to existing mortgage.

Location-Westford, VT

Current Mortgage $154k, mothly P&I $950 (holding cost approx $1,000 p/mo)

Structure: A-frame house/Cabin 711sqFt on 3acres, 1 Bed (could be two but it’s a shared loft) full unfinished basement with egress.

Pellet stove and propane.

Property is 45min outside of Burlington, VT, 20min outside the Major skii resorts and 1.5hrs from Montreal Canada.

The house is outdated but can be a cosmetic rehab for about $5-10k but a full renovation would be optimal by expanding the living space and adding windows/skylights to the Aframe walls/room.

He has about 2weeks of inspection and to close in 30. I have the cash for the payment and holding cost. Current spread if sold as is would be between $20-$30k after closing and holding cost.

Strategies we discussed:

-Wholesale for 20-30k to a Rehab/flipper

-Go all in get funding and rehab the property ourselves, but would need a ton of structural changes.

-Complete light cosmetic updates and sell for $185k-$199

Do outs:

Condition of mechanicals (heating and water)

Confirm septic or municipal

Interview realestate agents to confirm the market in the area and some comps and the ability to sell under what conditions. We would like the agent to provide us with the market in the area and the demographic of buyers in the area and who we would market to (I.e. commuters, families, single men/women, minimalist, etc)

Title Company/Realestate Attorney that will be able to review the contract, conduct a title search, and be able close a subject to deal and pay the holding cost(mortgage) through escrow.

In all, I was intrigued with this deal due to Albertinny’s determination, open minded and awesome personality but the ability to take control of a property for under $10k is what really sold me. Today is only Day 3 of this venture and wanted to get some feedback and suggestions if I missed anything. I’m really excited to work with Albertinny and he’s fully aware of my reservations, but this deal has so much potential.

@Wade Haldeman by any chance you checked to see in the public records that legal notice you mentioned with filed with the county? You may be able to backwards plan from the summons date if applicable or at least get more information on the judgement or legal action pending. Great research by the way, you may have been a Private Detective in your past life. Keep us posted this is a very interesting turn of events. Sounds like it may have good potential for a Lifetime Special.