All Forum Posts by: Rob Green

I agree with @Joe Cantanzriti

 in that you can find a way to do this. The first lender will want to make sure that you have sufficient equity in the property at the very beginning to hedge their risk of lending you the money to buy it. This can occur by buying the property significantly below current market value so you have immediate equity. Or, you could borrow the remaining money needed from a private lender. However, the first lender may feel uncomfortable with you not having any personal money in the deal or "skin in the game".

Another option that may be even more plausible is to partner with a private lender. You could offer to split the profits from any sale with the lender in exchange for them putting in the down payment on the property. You may even want them to be the partner that takes out the loan if they have better credit or financials than you do. You would get less of the potential profit if you chose any of these options, but you would get some of the profit that you might not get otherwise. You'd also get a valuable education; and a potential recurring partner for future deals. If you can show the private lender that you can do this deal, they may be favorably inclined to do future deals with you as well.

I also agree that you need both the promissory note and the deed of trust. As @Tim Watcke

 pointed out, the deed of trust is the legal instrument that gives you the right to foreclose on the property if necessary. The Deed of Trust should be recorded with the county to ensure your interests in the property show up in the chain of title. If you fail to do this, the Deed of Trust may still be valid, but you'll possibly have a harder time foreclosing. The promissory note (depending on your state/county) does not usually need to be recorded. 

In any event, having both a written promissory note and a recorded deed of trust help clearly define expectations and responsibilities between all parties. It's often worth the fee to have a tile company (or real estate attorney depending on your state) handle the paperwork and make sure everything is done properly.

You may have already considered this, but you might want to keep the water/sewer bill in your name. In many cities, if the tenant does not pay that bill, the city can lien your property.

Those maintenance issues don't sound too bad. Best of luck on your new acquisition. :-)

 One thing that you might find useful is focusing on "long-tail keywords" relative to your local area. You can find out what these terms are for your area by using the Google Keyword tool https://support.google.com/adwords/answer/2999770. Long-tail keywords are longer phrases that people may be using to find info about real estate in your area. So, for example, if "single family homes" is a common search term relative to your target market, you you might start creating content or "Curating" content that talks about issues regarding "four bedroom single family homes in Sandy Utah". The longer terms will cause you to rank more favorably in searches that fall outside of the standard search of "single family homes". Does that make sense?

The process is not quick as Google has changed its algorithms to filter out "content-spinning". So, you could thing of this as "digital farming"; a process that will take time, but will eventually establish you as a key ranking site.

Good luck!

Though not always effective, if the seller will let you, I've found it helpful to visit with the tenants prior to the close of the deal. I would offer them something called "Cash for Keys".

Usually, I would offer them $500 to $1000  to peacefully turn the property over to me upon closing. The money was conditioned on a checklist that I gave them prior to the close that detailed what the exact conditions of each of the requirements were, "broom-clean, free of debris, all seller-owned appliances left in good working order" etc.

Many of the tenants, knowing that the bank would likely evict them in a few months anyway, were cooperative enough to leave the property in "not-horrible" condition. One time though, I did have the tenant leave everything clean, but the took the garbage disposal with them. :-)

Congrats on closing your first deal! I'm curious about any deferred maintenance issues. My experience with section 8 tenants has usually been with properties that were maintained just enough to still qualify for section 8 folks. What sort of deferred maintenance issues will you be dealing with on these 2 duplexes?

One thing to consider about using the funds from your 401k: You usually have to pay back that money within a relatively short period of time. The penalties for failing to do so are significant: https://ttlc.intuit.com/questions/1899463-tax-cons...

I think it would be safer for you to start out by doing direct mailings to a targeted list as you continue to build your personal savings. While you're doing that, build relationships with other investors in your area, maybe by contacting them here on BiggerPockets. When you do get a credible response to your marketing, reach out to one of your contacts for help in analyzing and/or helping fund the deal. Even if you get only 50% of that first deal, you'll be getting 50% of something vs. 100% of nothing and you won't have the IRS potentially coming after you (I've negotiated with them for clients and it's not as fun as it sounds).

Of course, these are just my thoughts and others may have differing opinions.

Best of luck!

I believe that Jeremy is correct. Another issue to consider is if you have any bedrooms that are below grade (most of the room is located below ground). If the windows do not have proper egress (meaning a child could escape out of the in the event of a fire), you may have difficulty with government agencies approving that room as a bedroom.

I'm a complete newbie to this and not even sure where to start. I have a regularly updating database of every vacant residential and commercial property in the U.S. but I'm not sure what I should do first.

I have a very busy family so my time to actually go out and visit properties is very limited. And, of course, I can't possibly visit the vacant homes that are outside of my area. But, I don't want to spend a ton of money sending out mailers to all the vacant homes in the database.

Does anyone have any suggestions on what I can do to get started with wholesaling using this database?

Any suggestions are appreciated.

Thanks!