All Forum Posts by: Robert Reineri

I have a couple questions regarding subject to purchasing. With interest rates rising it seems like a good time to look into this option.

Does a deed actually change hands when purchasing this way? Is the seller going to give me a warranty deed? Is the bank going to accelerate on the note, and if so how would they know in the first place?

 Now what if the seller offers to wrap the existing mortgage and finance me that way. Am I completely reliant upon the seller to make the loan payments on the original note? What recourse do I have, if any?

Finally this seems like a good strategy if the seller is in pre-foreclosure. I can give them some cash and possibly get below market finance rates. I'm aware that the loan would have to be brought current and that might be quite expensive. Just have to do the diligence.

Cash for Keys can be a good option. It gets them out and gives an otherwise cash-poor tenant some money to get another place so they aren't living on the street. I always operate with compassion - and it comes back to me 10x when I least expect it!

Hello!

I'll be starting my full time investment business (mainly fix/flips) in mid-August. I will have a solid amount of working capital, and I'm looking to put my team together. I've flipped before, and will be an active investor who is not afraid to "pull the trigger". Wonder if anyone has recommendations for the following:

1. A good real estate agent who works exclusively (or almost exclusively) with investors and is not squeamish about presenting "investor" offers, which may range from all cash to very creative :-)

2. A good CPA experienced in real estate investment.

3. A good closing attorney, or title company that specializes in, or has considerable experience working with investors.

4. A good source for a virtual assistant.

5. Last but certainly not least, a private lender who is ready to work with an experienced, well-capitalized startup.

*** Please Note: The company website in my signature is NOT YET UP. I have a developer working on it now. ***

The IRS doesn't take kindly to being fooled, especially when it comes to tax advantaged accounts. They can declare the entire retirement entity taxable, and impose a hefty fine as well. I wouldn't chance it. Better to just take a disbursement and pay the taxes.

If you're at a point in your life where you're eligible to take a disbursement, that is.

Thank you for all the responses.  They are about as varied as the answers I got from the lenders I contacted:-)

I see a recommendation for Peak which I haven't checked out yet. Any other recommendations?

I'm aware that there are restrictions/limitations with this type of setup. I'm only figuring on a 50% LTV. If I can get 70% even better but I'm not counting on it. Also aware that I can't do any work on the property, can't live in it, relatives cant either, etc. The IRS rules allow me to manage it, but I have always used a property manager and will continue to do so. Also, the three companies I contacted all make these loans for far less than "millions". The highest lowest limit I found was 100k, and the lowest was 40k. Definitely not a million.

One thing I didn't realize is that they would base the LTV on the purchase price, not the ARV. What is the logic behind this? I don't see why it wouldn't be based on the appraised value/ARV especially since the work would have already been completed.

Thanks!

I've asked this question directly to several non-recourse lenders, and I can't seem to get a straight answer. It seems pretty straighforward and a sensible question.

I'll be investing starting in August when I have access to my employee 401k, which I will roll into the Solo 401K I have set up. I want to buy a couple properties with cash via the Solo 401k, and then want to "cash out" refinance with a non-recourse lender. My logic is I want the advantages of being a cash buyer, but I certainly want to take some of the equity back out of the property to invest in another.

Any recommendations on a lender who does this? Or at least one who can answer my question "yes" or "no".

Invest on!

Natilie Kolodij is right on here. I investigated both of these options at length. While I'm not a tax accountant, I decided to start with an LLC, and move to a corporate structure when things got going well. I figured why complicate things in the beginning? I want to be investing, not holding "shareholder" meetings with myself (with a C Corp anyhow).

Thanks for the reply Amy.  My employer is closing shop and moving. I'd have to move to Silicon Valley to keep my job, so I took the early retirement option they offered. There is no way I could afford to live in the Bay area even if I wanted to.

I actually do have enough cash outside my 401k to fund the first flip, but in my current market, it may well take months to find a deal. In the meantime I also have to use some of  that money to live on. If I get lucky and find a deal right off the bat, I could make it work. I'm a very conservative planner though. I plan for the worst, but expect the best ;-) I'm already doing a dedicated search for something to buy.

Thank you Chris, good to know.