All Forum Posts by: Robert Hytha

Hello BP!

I'm coming to you all for help, but first - let me introduce myself.

My name is Rob, I'm a marketing grad born, raised and now investing in the suburbs of Philadelphia.

In my Junior year at Eastern University I met an entrepreneur name Joe, a guest speaker in a business course. Along with his partner Tom, they started a mortgage company buying and working out resolutions for distressed mortgage borrowers. I began an internship as soon as I could and now manage the firm's trading desk as the national director of sales.

2014 has been awesome! I started a consulting company in the beginning of the year. Although I still live with my parents, I bought my first house shortly before my 24th birthday! I have a few other ventures and projects in the works - the following of which I need your advice.

My first house is a 1750 sq foot, 4 bedroom twin in a small former steel town not too far from the city. It was occupied when I purchased for $130k with $150k appraisal. Tenants are paying $1200. $1030 p&i on my 15 year at 3.75%. The lease expired this month and they've signed a renewal for 2 years at $1250 then $1300.

Here's where it gets good!! The other half of this twin is a beautiful property and much better than my side. In the early 1900s two brothers owned the property and divided the parcels unevenly and the other side has a 5 car garage and 8,000+ sq ft lot which sports fruit trees and an old grape vine.

I got in touch with the owner of this fine piece of RE in June and worked out a sweet deal - $190k lease option (sublet allowable), $2500 down and $1400 per month with $400 deducted from the price.

Within 24 hrs of signing this lease I had a couple of tenants on a 1-year at $1600. Their agreement includes 1 of the garages and I'm working on renting the other 4... unless!

Here's the dream - in order to move out of my parents house, I want to rip the roof off this garage and build a home for myself. I'm imagining a 1000 sq ft second story loft apartment (balcony, spiral stair to the garage, etc).

Now, how do I do it?

The issue here is not the construction of the property (although I would love some input on the design and features to include!) - I'm looking for some guidance on financing this project in the best way.

I don't have to execute on my option to buy until next year (when the lease will renew anyway) and it's doubtful I will pass underwriting for a second loan this year (W9 and LLC income have less than a year of history).

Here's one option - build the loft in the next 9 months with borrowed cash from my parents HELOC. Move in and get an owner-occupied 30 year to buy the improved house. Mortgage rates might increase and I suppose there's a minor risk of something happening with my lease (although I trust my counter party) but since I don't hold title yet it's a factor.

Another plan would be to find a lender who can underwrite this deal ASAP and refi next year. My financials are solid but the inconsistency in the source of income may be a hurdle. Also, I will definitely be short on the downpayment (tenant occupied - 25%) so I would have to tap my parents HELOC anyway.

I plan on continuing to invest in real estate in my town so a final option might be to secure a business line of credit to buy this home first and continue to look for other deals in my area. 

How should I proceed? What else should I consider? If I missed anything let me know and I will try and clarify!

thanks for reading!! and please forgive me if this post belong in another forum, admins - please advise!

Hey Steve thanks for the response! You are correct about Dave training Tom and Joe, the principals of USMR. I have met him a few times at CAMA Academy, where Tom and Joe are now training others to be successful note investors.

What a great show, I first saw it in my entrepreneurial business class last semester at school.

Another similar show is hosted by the founder of Chipotle, Steve Ells, Bobby Flay, and a few others called America's Next Great Resturant. They look for great entrepreneurs with awesome restaurant ideas. I haven't seen it yet but am very excited to check it out.

I'm on it! Happy to help support BP!

Great man! I think that having a mentor is the single most important thing for a young professional to have success.

I would be really interested to see where your at today and if you are achieving your goals!

Hey everyone, I'm very excited to be a part of this thriving community of real estate professionals and investors! So far I've been very impressed by the networking possibilities and marketing potential of the forums, blogs and other features of the site let alone the vast amount of knowledge that is available on everything related to real estate!

I'm a senior marketing and communications student at Eastern University on the main line in the suburbs of Philly and work at the Radnor Financial Center with a real estate mortgage note investment company called US Mortgage Resolution. I'm very fortunate to have this position and I'm super excited for my future with this company. :D

Just to give you a brief synopsis of our niche in the note business, we purchase primarily non-performing second mortgage notes in large pools (large for individual investors but fairly small in the broad scheme of things) at a discount then contact homeowners frustrated by inefficient bank collection agencies to help them get on track and begin paying again. Because of our significant purchase discount we can offer the homeowners a significant discount on their payments encouraging them to begin paying again. We exit these notes through discounted payoffs, the sale of re-performing notes (email me if your interested), or various other methods. We rarely exit through foreclosure and if the homeowner wants to stay in their current house, we help make that happen for them. I'm happy to have found a company with a business model that I feel is consistent with my ethics and at the same time very lucrative. :mrgreen:

In order to be as transparent as possible I feel it's important to express my goals for joining this forum. I want to help other note investors and potential note investors learn the business by answering their questions about things I'm familiar with, I want to build relationships with note investors to potentially work together in purchasing large pools, and I want to make friends and be engaged in interesting conversations!

I also wanted to thank the moderators for doing such an amazing job keeping the community free of spam and irrelevant info. I started my networking and marketing on the internet with LinkedIn but quickly found it was overrun with scammers and spam. Here at Bigger Pockets I can't complain about any of that! (Unfortunetly the same moderation I'm raving about actually cost me some influence points when I posted in the wrong forum!:cry:)

My brother who is somewhat of a geek when it comes to the internet and technology is very excited about Google + and sent me an invite yesterday. I have to say, it looks like it has a whole lot of potential. Its pretty useless right now though as none of my friends have joined yet but I'm really excited to see how Facebook retaliates and their users respond.

Hold off on creating business pages! They are going to add lots of business page features after the Beta version is updated. http://searchengineland.com/google-hold-off-on-creating-business-profiles-on-google-non-user-profiles-will-be-shut-down-84607

I haven't done much research on Oomba yet but I was interested to see this thread because I just heard about it for the first time this morning in an article my boss put on my desk. How does the features and audio quality compare to Skype?

Likewise Allen, it's always nice to meet like-minded investors to share information with and learn from. I'm very impressed with the networking possibilities of this forum and I'm excited to see the business that comes out of it.

I'm happy to hear you joined the meetup group, to share with the rest of the thread, through our meetup group you can receive free educational content on the note business. So far we have 2 Coffee Talk Radio programs archived on Blog Talk Radio with new episodes weekly on Thursday mornings. RSVP for the radio program here: http://www.meetup.com/US-Mortgage-Note-Group/

If you're in the Philly area and want to meet other note investors, join http://www.meetup.com/Philadelphia-Note-Investors-Group/ and come out to our monthly meetup to trade notes, learn from experts and share your own knowledge.

I know this was kind of off topic from the main point of talking to banks but I just wanted to make sure anyone who was looking for free education on how to get into the note business could be made aware of it. Email me if you have any questions! [email protected]

This thread has been very informative and a lot of great info has been shared. Investing in RE notes has been mentioned a few times and I have to agree that secured residential mortgage notes are one of the better ways an individual can invest in real estate passively with good returns. If you purchase a note with a 5% interest rate at a discount, the worst case scenario is the borrower continues to pay and you collect over 5% on your investment. If the borrower doesn't pay you can take the property (if you did your DD correctly there will be equity in the home).

But like Dustin Gott said, investing in notes isn't fully passive. Unlike what he said though, servicing and collecting on performing notes is about as passive as it gets when you hire a servicing company to collect for you. Having notes serviced normally costs a flat fee of less than $20 a month.
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