All Forum Posts by: Scott McMahan

Lake Orion is a great town and it sounds like this will definitely work out for you in the end. I'd like to echo the importance of spending as little as possible while making sure the fundamentals are not causing problems that will cost you more $$ down the road. With the foundation, it is very likely you can either do nothing or do something different that won't cost you 10 grand. Get more bids and opinions from both licensed and unlicensed contractors.

With the roof, I have a roofer that is reasonable and a good guy who will repair rather than replace and be reasonable with you. I don't have his permission to share his cell phone number online so I will PM you his number. I'd be interested to know how he compares to the bid you got. 

I get at least 3-4 bids from licensed and unlicensed guys for every major project unless I have the kind of a relationship with a guy and understanding of the work needed that I know he's being reasonable. 

If you can get a suitable solution to those major issues for $4K instead of $14K your investment looks much more attractive. Not having seen it, I don't know if it can be done for $4K but I see homeowners paying ridiculous prices for work all the time. I had my mom stop a check she wrote to a company with a great salesman that had sold her a new shower for $6K. I would have paid my crew a little over $1000 for the same result in time and materials. 

I just got something under contract in Birch Run that meets those criteria. I'll PM you details. 

Hi Luke. What areas, types of property, and price range are you looking for?

@Frank R Martinez What did you decide? Did you go with Investor Carrot? If so are you still at it? What is your experience? If not, what other direction did you go? Thank you. 

I was contacted by Kevin Harrison on BP, who said he is a "financial agent" who works with several private lenders. He referred me to a private lender in Texas named Lazard Kisel with Joinville Finance, Inc. He offered a loan of 7.5% with 3 points, which is very reasonable. Then he sent me a contract that said I would need to send a wire to his title company, JM Investor Title Agency in NY, for the 3 points, that they require the 3 points prior to closing. In this case that was $5700.

I marked up his agreement and indicated I would send the funds to my title company who would verify the legitimacy of his title company and the existence of the closing funds then wire the points to him at closing. He sent an angry-toned email back saying I shouldn't have "canceled the agreement by writing on it" and that I should look for another lender. Look out for this guy! 

I own two properties outright and I need private mortgages on them in order to buy another property that will be my primary. Must close on or before 5/20/16.

This must be a private mortgage or hard money loan. The property we are buying is not financeable and we've got credit issues that prevent us from getting a conventional or FHA mortgage right now. We are also unable to get a HELOC so that's not an option right now.

Mortgage Amount: $175,000

Collateral: 

4122 Independence Dr. Genesee Twp, MI 48507. 1500sf 3/2 ranch with garage and basement. Fully rehabbed, will be on the market by 5/6/16 for $109,900. Seeking a mortgage of $70,000.

1321 Woodlawn Park Dr. Flint, MI 48503. Beautiful remodeled 3200sf Tudor on the nicest street of one of the best neighborhoods of Flint. Water treatment system in house and we can provide a 0ppb lead test. Will be on the market by 6/1/16 for $159,900. Seeking a mortgage of $105,000.

I'm willing to add the new house as additional collateral, although I will be occupying the property. It is a 4000sf updated farmhouse on 10 acres in Lapeer MI. Worth $240-260K after the $15K light repairs we will make. 

Alternate Structure:

Another idea is you can buy the new house and give us a lease option on it for one year. We can give you a mortgage on the houses on Independence and Woodlawn Park as additional collateral. In this scenario, the LTV goes down to 35%.

Thank you Reggie. I send you an email.

that would be a lower cost option but we are having DTI issues with the income on our tax returns. I'll try another bank.

I am buying a new primary residence. We have the property under contract and the seller requires cash. Must close by 5/16/16.

Loan Amount: $175,000

Collateral: Three properties, including our current primary residence to be on the market for $159,900 by 6/1/16, a flip house that will be on the market by 5/5/16 for $99,900, and the new house, ARV $240,000+. All are owned free and clear except for a $10K private mortgage on the flip house that will be subordinated.

Exit Strategy: Loan to be repaid in full with interest from the sale of the two houses to be sold this Spring/Summer. 

Loan must close by 5/16/16. 

Interest/points: Negotiable.

I've done cash for keys 4 times now and one eviction. I love all of my tenants, and it's bittersweet when they stop paying and it comes to getting them out. Obviously it's frustrating to have someone take money out of my pocket but that's not really their goal. In every case, the tenant was self-consumed and deeply troubled and suffering enough without me having to add to their suffering. I just started giving a Bible along with the cash for keys and it makes me feel much better while also giving them something much more valuable than money. 

I like the argument that's being presented here, that we need to act for the greater good of the next landlord, but the truth is I haven't seen a tenant stop paying rent and move out without having other significant credit and collection issues that would show up if the next landlord does their due diligence.

If we're going to start talking about greater good we must take that all the way to the Greatest Good, which ultimately will bring all of us to our knees - and make us more better and more successful landlords.

Oh, and I want to share the strangest thing that's happened with my last two cash for keys. They both referred other tenants. Both of those tenants moved in less than a week after the previous tenant moved out, cleaned up after their friend (so I had no extra turnover cost), and both are still with me and are great tenants. One pays a bit late but she includes a late fee so it's like getting higher rent. Do I care if they know that when they move out I'll give them $300 and a Bible? Would you, really?