All Forum Posts by: Account Closed

@

Michael Randle your comment speaks volumes about where your at in business and social skills.  Good luck to you.

Using hard money at 10% interest and 3 points... As I run multiple scenarios on a house with an ARV of $200k and say 40K of rehab (thats what one GC blindly told me.) I'd have to offer as little as $89000 to the seller. There seems no way I can find a deal like that in this market. Thats like just 44% of current market value. I think cash is only way to get into this. I dont want to hold a property and do all this for a $10K profit over 6 months... or even a $20K profit over 6 months. That is only worth while if you can have like 5 or 6 going at the same time.

Is making profits of $25-30K in a 5-6 month period difficult on one property?

How do I scale this if it takes me 2 months to find a deal (if ever) and then tie up all my cash in one flip?

People do this mostly as a side job for some extra income or what?

@Chris Martin thanks. So in your opinion "intent to defraud" is not even part of the equation.  If the flipper defaults on the loan regardless of intent... that is ground for 3rd-degree felony which is 30 years to life in prison.  I am going to email some criminal attorneys for their opinion... It just sounds so harsh but maybe they truly want to make an example of FL sub2 flippers now.

@Jay Hinrichs thanks for the advice.

https://www.flsenate.gov/Laws/Statutes/2012/697.08 - The first line I think is key: "with intent to defraud the owner of real property" -One must show intent to defraud.

So I think a screw up here or there would permissible over a one's career... **** happens.  But if there were a consistent pattern of complaints/defaults and proof of omitting verbiage such as: due on sale clause or saying "I will take over payments" for you etc. that would be grounds for a felony.  So this tactic requires strong self-policing and I would only trust myself to negotiate these deals... no employees or subcontractors.

Takes some balls for sure... I'm guessing this is probably still safe as long as I don't consistently default on the mortgages or lie or actually trigger a DOSC (then I'm really screwed).   Plus I need to get some good contracts and have my Seller initial all this... Due on Sale clause and other things showing I've made every effort to not to defraud.  If anyone successful at this is willing to share contracts they use, especially in FL I would be greatly appreciative.  I will pay you 1 million... "thank yous."

@Ryan Ridgley yeah... I need to make sure I understand that statute right. 

Statute says: "that are subject to a loan that is in default at the time of purchase or within 1 year after the time of purchase, which loan is secured by a mortgage or deed of trust" 

I think that line is saying I must definitely not default on a payment during first 12 months no matter what acquiring any property via Sub2 or I can face criminal prosecution.

@Rick Pozos thanks... okay so if I'm reading you right... you are typically using this as a vehicle to flip houses to avoid too much in hard money... not a long-term residual play. I was thinking the same idea. That would be less risky for sure assuming no Due on sale clause comes through in the meantime. Would you mind sharing all the contracts you use for your Sub2 Wrap deals or point me in the right direction? (don't know if that's appropriate to ask but never hurts I suppose) Many thanks.

@Jay Hinrichs thanks... why did 10 out of 40 properties go TU so quickly?  

 Geez... so maybe I just focus on hard money loans and flipping.  Flipping seems so hard to make a living at due to finding deals.  I thought these Sub2s would be a nice fast way to get some cash flow and deal with low equity leads.  I can see how easy it would be to sell this.  This is killing my plan. Is this kind of default rate common of sub2s?  Would love to hear good experiences about sub2s... I had thought about these defaults as being a problem... like robbing Peter to pay Paul.

@Mike M. thanks.  Hmmm... So my concern is I am tied to these properties for 15-20 years+... It is a high volume play to get residual income... I am wondering how likely or hard it is to keep buyers in these homes and keep up with the payments?  When you get a lot of properties you are making payments to all the different banks via online banking autopay?

Hey BP,

I'm in FL and am fascinated by sub2 deals with wrap mortgages.  I am wanting to utilize this as a way to invest and add to my portfolio.  So I was talking with an attorney and he mentioned equity skimming laws in FL for folks in default.  Here is statute: https://www.flsenate.gov/Laws/Statutes/2012/697.08

QUESTION:  Can I legally due these sub2 wrap deals on folks that have not yet gone to auction without criminal prosecution?

QUESTION: Statute mentions payment must be made for 12 months after purchase too.  So if I do make one of these deals I must ensure 12 months of payments or face the possibility of criminal prosecution?

I understand this is not a legal forum... but any FL investors hip on this Sub2/wrap deals please advise. I thought this would be an AWESOME way to handle leads that have little equity.