All Forum Posts by: David Weiss

@J Scott , @Ned Carey , @Elizabeth C. and everyone else, thank you so much for sharing your experiences and insights. I'm going to bookmark this thread for referral whenever contemplating a situation where a short sale might be useful.

PS: J Scott, your eBooks are fantastic--thank you so much for creating them and thank you BP for distributing them!

@Joshua Dorkin , while there are a few people who think it's not worth the effort, there's an enthusiastic majority who thinks "Joshua Dorkin's List" would be a real value-add. I know you said you had a notebook full of ideas for BP--do you think you could bump this idea up to the short list?

Angie's List and Yelp both skew their results in favor of those who pay and free public review sites are also subject to the paid reviewer effect @Dawn Anastasi mentioned. Yours would also have advantages over asking local investors--speed, ease and the potential to get multiple perspectives, for example.

It'd be a great Christmas present to your members <hint><hint>. :)

Thank you everyone who has shared your insights so far.

@Ned Carey , thank you for pointing out that there are a lot of factors that play into how much you can save with a short sale. Would you please take a moment to list the top factors that in your experience really lead to deep write-downs on the loan settlement?

Have you closed one or more short sales in the last couple years?

If so, how many have you closed and what's the typical write-down you are able to get banks to accept nowadays? 15%? 50%?

I'm hearing conflicting accounts about what's realistic so thought I'd ask the pros who do them. :)

Thanks in advance for your time.

Russ, thank you for the compliments.

I agree with @Ann Bellamy, your edit doesn't significantly change the impact of your post. I and others have focused on "50+" because that implies that you are expecting someone else to hand you such a large sum of cash, and you have done (in our opinions) so little to demonstrate why that would be a good idea. But like Ann said, just taking that away doesn't change the fundamental issue here--what you are or are not bringing to the table.

• You say that my assumption is incorrect about you having capital to invest in this venture. Fair enough. How much are you willing and able to contribute to the purchase of an investment property?
• You say that my assumption is incorrect about how much rental property experience you have. Fair enough. What is the largest number of rent checks you've collected in a given month?

If the answers to the above are compelling, I think it was a significant mistake on your part to not have mentioned them in your initial post and should clearly have been mentioned in your initial response to @Chris Martin.

If the answers to the above would disincline an investor to partner with you, then you should have known better than to think someone with millions of dollars at their disposal would give them to you simply because you have "due diligence, management experience, budget expertise and honesty".

If you have serious credentials, IMHO your original post should have been written something like this:

• Serious investor with 8 years of rental property experience looking to transition into 50+ unit investment. Equity partner needed. At one point I had 32 rental properties under my control but have liquidated about half to prepare for this transition. My equity share will be the lesser of $1.6 million or 50%. The property is a 61 unit facility in down town.... What I am looking for in a partner is....

By the way, I greatly admire your ability to remain unfailingly polite in the wake of a fair amount of public criticism. It's a commendable trait and I want to say "thank you" for leveraging it in this conversation. The feedback you are getting is doubtless uncomfortable, but what we are trying to do is help support your future success.

Russ, I admire your ambition. However....

They do not make the valedictorian from West Point an army general upon graduation. It does not matter if he was the captain of the football team as well as graduating with perfect grades. It is not sufficient to be smart, well-studied in the ways of war, and a proven leader of men. These things don't come anywhere close to being sufficient grounds for being entrusted with the most significant responsibilities in the military.

What else does he need? He needs lots of experience, because there's no substitute for it, and the football team doesn't count because it's not anywhere near the same thing. Moreso, he must be able to demonstrate how his experiences have distinguished him from his peers and proven his mettle before he's entrusted with so much responsibility.

The exact same thing applies here. In the world of real estate, you're the valedictorian football captain asking to run a war. You're a bird-dogger asking someone else to buy you an expensive apartment complex because you've read about it. But your real estate experience doesn't seem to even include such basic things as having ever collected a rent check or signed a contract for an investment property.

I admire your self-confidence and desire to provide for your family. I want you to reach your goal. I think your goal is achievable. I don't think it's achievable today. My recommendation:

1. Transition from bird-dogging to wholesaling so you get better with contracts, negotiating, closing sales, marketing and also see an increase your profits.
2. Flip a few houses to build up your working capital.
3. Get a few rental properties going. Roll the cash flow into your business.
4. Flip a house or two if funds get low so you can keep buying.
5. Buy a duplex, triplex or quad. Then buy another.
6. Then buy a small apartment complex, 5-49 units. Run that successfully for a couple years.

Then transition into 50+ unit ventures. At that point your experiences combined with your intelligence and your ability to put some of your own financial skin into the game will make you a much more viable candidate for the financing.

Good luck!

I agree with the others, I'd look for another deal with long term benefits like this one but with positive cash flow instead of negative. This one has too much risk, there are too many ways for you to lose your investment. For example, if you lose your job, a positive cash flow property maintains itself, but you could end up losing your investment while hunting for a new job.

Fortunately, this is not the only seller in America willing to OF with $0 down. :)

Several reasons come to mind. Top of the list would be lack of funds to carry the house, which could cause Lashinda to lose the house and the seller to get hit with a foreclosure on their record. And then if they were so inclined the seller could sue Lashinda.

The same thing of course could happen even if payments are made, due to Due on Sale.

I'm a big fan of Sub2's. But I think there's a time and a place for them. To your point, if Lashinda is fully versed on managing Sub2 risks, has easy access to cash to deal with vacancies and (if renting) repairs and is interested in buy-and-hold strategies, this might be a deal for her.

Otherwise, I think it would be rather ill-advised for her to take this on her own.

Grand Prairie, @Jon Klaus.

I've got a motivated seller in a $130k ARV house who is 18 years into a 30 year 7% mortgage. Still owes $64k, owner insists on $10k in his pocket at time of sale, house needs $30k rehab. PITI is $903/mo. Seller is willing to sell via Sub2 and is fully aware of and unconcerned about Due on Sale risk.

Numbers don't work (for me) for a traditional flip as total investment would exceed 70% ARV.

I can't work this deal as I don't have $40k in pocket and I don't know of a HML who will accept a 2nd position lien.

If you are interested in more details and are willing to pay $2k finder's fee, please let me know.