All Forum Posts by: Scott Johnson

Investment Info:

Townhouse buy & hold investment.

Purchase price: $84,500
Cash invested: $16,000

A personal friend of ours reached out and needed to sell this townhome. Their father had recently passed away and it was going through the probate process. Two things added a layer of complexity to this deal: 1) The property was still in the father's deceased wife's name (she'd left it to him but it never fully went through probate) and 2) It was going to be foreclosed on March 24th, 2021. We successfully closed on the property, changed the plumbing, and immediately rented it out.

What made you interested in investing in this type of deal?

It's located in a very good neighborhood and was in great shape from the beginning.

How did you find this deal and how did you negotiate it?

A personal friend reached out to me. They'd seen my videos on Social Media.

How did you finance this deal?

Kiavi Lending

How did you add value to the deal?

We were able to stop the foreclosure and navigate the difficult "double probate" process. We also drove 2.5 hours in one day to get all of the documents signed by the family members.

What was the outcome?

The foreclosure stopped and we have a great rental property!

Lessons learned? Challenges?

LET THE ATTORNEYS DO THE WORK. With this deal, the best thing we did was get the probate and closing attorney talking and on the same page. In ALL emails, I CCed both of them so they kept up to date on what was going on. This helped tremendously.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Gregory K James Attorney At Law is a fantastic closing attorney in Greenville NC. Highly recommended.

Investment Info:

Single-family residence wholesale investment.

Purchase price: $154,500
Sale price: $168,000

A client reached out to us because they needed to move to Kentucky because they'd gotten a new job. After discussing their options, they opted for a cash purchase. We sold that contract to an investor on our list who will be rehabbing and selling it on the MLS.

What made you interested in investing in this type of deal?

The school system this house is located in is the best in Pitt County.

How did you find this deal and how did you negotiate it?

Our client reached out to us on our website after their friend saw us on Facebook and recommended that they reach out.

How did you finance this deal?

The buyer provided all of their own financing.

How did you add value to the deal?

We were able to close quickly so our client could move and start their new career. We also provided a great rehab for one of our consistent buyers.

What was the outcome?

A win-win-win situation.

Lessons learned? Challenges?

Unfortunately, there were very few challenges with this deal. I had jury duty the next Monday, so that's as challenging as it got.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not on this deal.

Make sure to include any restrictions like that in the lease. Always a good idea to consult your attorney prior to execution of a newly altered lease.

As a Home Buyer in Greenville, NC, my biggest accomplishment for 2021 was getting my broker license. Cash offers aren't for everyone and we found that we were losing deals because we didn't have that capability. Now we're primed and ready to move into 2022 full steam!

Awesome! Glad to hear it! Yea, I like to post "weed out" material in my posts. Like how much total they'll need for a deposit and first month's rent and the highest rent possible for that market (which can be negotiated of course). Also restrictions on the number of cars and actively towing cars that don't have tags or don't operate.

I've used SmartMove twice before and they're fantastic. Even able to add my property manager on to the account so she can see the screening. 

Now I just have my manager do all of the work using her systems, but I highly recommend SmartMove.

@Rob Gillespie, here are my thoughts based on your response:

• Property Value: $16,000
• Sale Price: $19,000
• Down Payment: $3,000
• PV: $16,000
• Rate: 10.0%
• Duration: 120 Periods

Season for 19 periods (PV: $14,399) and put note up for sale.

What are your thoughts on that? There are still 19 periods where the interest is higher than the principle if that matters. Like I said, still a N00b to notes :P

That makes TOOOOOOOTAL sense! Thanks so much for all of that information! It's golden! For whatever reason, I didn't even think about LTV and its implications. So a secure note would look more like this:

• Lot Value: $25,000
• PV: $16,250 (65% LTV)
• Rate: 8%
• All documents correct
• High borrower worthiness
• Seasoning (1 to 2 years maybe?)

I'm going to have to learn about RESPA and loan originator requirements here in North Carolina. I don't even know what those are yet!

How long do note buyers like loans to season prior to their buying them?

I'm also looking at a "Rent to own" play with this one, which may work out a bit better than seller financing. NORMALLY I buy properties at below market value, but in this case you are correct. I'm purchasing it AT market value.

"...sell for yields in the 20 to 30% apr range." is a bit foreign to me. So I'm putting the 30% into the interest spot on my financial calculator along with the other same origination terms and having it calculate the PV?

To clarify, this land has all hookups required for a mobile home, including septic. 

Thanks for that quick response! Much appreciated!

Hey, Everyone!

I found a mobile home lot in a good neighborhood that has everything ready for another mobile home to be moved on and hooked up. I'm going to purchase it cash ($16,000) and originate a loan at $25,000 at 8% for $209.11 per month (which is the cost of renting a lot in the area).

My goal is to hold this note, but I also want to keep my options open by making sure it's a quality note that I CAN sell if I deem it necessary. I'm planning to use this education for all of my future seller finance deals as well.

If you are a note buyer and know what you like, please post it below. If you know of any educational materials I can review or paid programs that you've found valuable, please let me know!

Two of my guiding questions are:

• What do you look for in a quality note?
• What percent of face value do you normally buy your note (if that's even the measure that you look for)

Thanks in advance!