All Forum Posts by: Richard Lincoln

Originally posted by @Dan Maciejewski:

Your pool of buyers will be extremely limited. I have yet to have a buyer want to negotiate directly with a FSBO.

I always let my buyers know when a FSBO doesn't want to pay me (or not pay me enough), and I give them the option of dealing directly without me. None want to go through that hassle.

People DO buy directly from FSBOs.  Fairly consistently, around 7-10% of sales are with no agent.  That means you are eliminating 90+% of buyers if you want to sell yourself.  Less competition means less demand which means lower prices.  If the math works out that the lower value still gives you more net, than go ahead.

You are super low volume at 2 houses a year, so you do have all the time in the world to find your own buyers.  Most sellers that do volume see a value in using a Realtor to sell, it gives them time to do more volume instead of trying to squeeze every nickel and dime out of every single sale.  

And what seller's concession for buyer's loan?  What market is that still common!?  There are markets right now where buyers are paying seller closing costs!  You may want to take a look at the market data for your market.  As a lender, you probably don't see at least half of the sales as they are cash.  At least in my market, we are still around 1/2 cash transactions.

I am curious, do you charge an origination fee, or do you just make money off interest?  I assume you are a direct lender and don't work for a bank or broker.

 Thanks. This is quite helpful. There is a sale coming up later this year and it's going to be a higher value property. I don't mind the fees as much as on the small transactions as I do the larger ones because they're percentages. I mean, if it's a 200k property the fee's gonna be 5k. If it's 700k then it's going to be like a 17k commission. It's a significant difference that makes no-agent buyers more attractive. I want one of those.

Some backdrop: I'm a note buyer/debt buyer. I don't originate the loans. Sometimes I foreclose. That's where the houses come from. Selling the houses is incidental. Since they're foreclosures I typically do some fix up to get them in lendable and marketable condition prior to listing them. It typically costs between 10k and 30k for me to do that.

I sell houses, maybe about 1 or 2 per year. I really hate buyer's agent commissions. It's so much money, especially on more valuable properties. I can avoid the seller's agent fee by doing FSBO, but I want to start selling FSBO only to non-agent buyers, but still have loan origination and escrow. So, I'd still do the seller concession to get the buyer's loan fees covered.

Anyway, does anyone have any experience doing this? Any tips? Things to avoid?

Probably intelius. I use them all the time

@Kim Hud

I see the 190k rehab cost and my jaw is dropping. When starting rehabbing a typical day for me starts out I get up in the morning and I start scoping out the Home Depot and Lowe’s parking lots for the laborers and if I find them I start haggling the hourly rates. Typically I pay $15 to them, but I’ve heard they go as low as $12. I also post ads for labor on Craigslist. The best labor is on weekends because then there are all the good people who work M-F looking for extra hours. Can get really skilled people who will work for $25 on the weekend just because they got nothing better to do. Then once you keep doing this you will sort out the good ones from the bad ones and eventually have good people coming in regularly until the jobs done. While the guys are working most of the time is spent shopping for tools and materials to keep the guys busy. Get a uhaul trailer for bulky pickups and dump runs to the county landfill. Once the rehabs done return all the tools to Home Depot for refunds. This is the cheapest way. Do stuff that can easily be seen from the street last so if the inspectors see it, well most everything is done already. Probably illegal but eh.

@Lesley Resnick

Lots of things are cash only. That certain donut shop or liquor store. Buying things on Craigslist, garage sales, lemonade stands, hot dog carts, private party used car sales, flea markets, gambling, and day laborers don’t take anything else.

Originally posted by @Steve Morris:

Originally posted by @Richard Lincoln:

Prolly just do nothing til April 1st IMO. Not a huge deal to hold off until then.

Sure especialy if you can't evict them if they haven't paid rent since 1 Apr 20.

You don't own property here do you?

Off topic and ad hominem.

Originally posted by @Joe S.:

It was a private money lender that I have personally developed. With that being said if you can get loans I don’t know why you couldn’t pay it off with a new loan. If you’re self-employed like a lot of real estate investors and don’t have the standard tax return then maybe you could find a stated income lender.

That I can sign a good mortgage with title insurance benefiting the mortgagee hasn't been the issue. The issue has been the lenders' internal underwriting guidelines.

Originally posted by @Joe S.:

If your on title then I would think you would simply refinance like you would any other house that you own. I refinanced a house we had bought Sub2 just recently.

 Who was the lender?

Zelle because it's lazy and free.

Originally posted by @Joe S.:

Originally posted by @Richard Lincoln:

I buy lots of second mortgages and occasionally foreclose on the properties. I end up getting title to the properties subject-to the 1st mortgages. Well, then I get in to a pickle because sometimes I'd like to keep the properties but the 1st can call the loan even if I reinstate it and, often, the situation is troublesome with escrowed insurance premiums because I have to pay insurance premiums for which I'm not receiving any real benefit. The 1st mortgage is typically non-assumable.

So, I look to "refinancing" them, but the answer is usually that they won't refinance the mortgage if I'm not the borrower. (the former homeowner is the borrower) Hard money is possible, but it's so damn expensive that I may as well just sell the house and 1031 the sales proceeds in to a new property. Even refinancing a loan has thousands in closing costs. Selling the house has buyer agent fee.

Anyone have this problem before?

 How are you getting the loan information on the first? I foreclosed on a second lien a number years back and the first lienholder which was a bank refused to give me the loan information. They would not tell me how much was delinquent, the payment amount, or anything. 

 Depends on the situation. Sometimes they have to put it in foreclosure notices. Other times they are required to produce the information to certain parties per state code. There are also bankruptcy records, credit reports, probate records, mortgage assignments, etc. If they file for summary judgment in a judicial foreclosure state a lot of info will be attached to the motion. Sometimes the people I bought it from already had the info. Sometimes to reinstate a 1st I just keep inching up the tender alount until they accept the payment rather than sending it back.