All Forum Posts by: Serge S.

@Account Closed I highly doubt that he had it appraised. It appraised in the low $200s a year ago and he has not made it worth more.

@Don Konipol really great idea! To make matters worse there is a deed restriction on the property from the USDA saying the property cannot be leased until it has been inspected by a licensed contractor and the report submitted to lift the restriction.

My initial take was to sit back and wait for it to come to me as I've done in the past with other similar situations. I'm going to stick to my guns and not budge for a while and most likely wait for it to come back to me.

He has no liens on the property but borrowed $150k unsecured from someone. He bought it on a whim using 1031 money on an inherited property. Never owned multifamily and doesn't have a clue. His comment to me was that he could just hold and with the $9k monthly income the property would pay for itself in X amount of years which I found very amusing. Where do you even begin addressing such a comment.

Thanks @Mark Ainley I will PM and try to connect. Any other feedback is appreciated!

I have a 16 unit complex that I have been working to obtain for over a year now. It was a USDA foreclosure in late 2012 with a live local auction and I was bidding against one guy. It reached my price and cash limit at the time and sold to him for the mid $200s. I've been watching it since. Last month I drove by and spoke to the handyman doing the work and found out a lot of info. The buyer turned out to be a very inexperienced investor and is way over his head. He has done everything wrong from using interior grade paint on the outside (hot pink) to inappropriate plumbing, flooring and other repairs. He has no money to finish the job or infrastructure to rent to that class of tenant. He has 3 units rented (to terrible tenants) and has put some cash into appliances, plumbing, etc.

I reached the owner and told him that I'm interested and he said he is definitely interested in selling. He said he has no idea what its worth but "wants" $480k because thats what he has into it plus a small profit as "he can't lose money."

Hard to say what its worth as its a very unique property. I'm very interested as it has a great unit mix (4, 3 and 2 bd) and all separate utilities including water which is really rare out here. So ... back of the envelope average rent will be $600 for a $9,600 gross scheduled. 50% rule it should net close to $5k but still needs around $80k in work. Thus, I offered him $400k which I think is still too high and he has been unresponsive. Every time we talk it goes nowhere as he somehow thinks he can hold and pull off renting the units. I'm positive he will fail and has no such chance. I've offered him cash and a combo of cash and other cash flowing property.

How would you approach such a situation to get this kind of seller to realize its in his best interest to move on??

I'm an experienced RE investor in AZ and have only invested in my region thus far. I've been approached by an asset manager I've used to get incredible 50% ARV deals for the past few years with a small Chicago package. I've been researching and the deal looks good but I'm really weary about the murder capital and getting stuck in a potential war zone. Any feedback would be greatly appreciated.

1. Duplex in Englewood (May St) neighborhood looks to be in great condition built early 1900s.

2. Triplex with 2 2bd upstairs flat and 4bd downstairs (Escanaba Ave) brick early 1900s needs work.

3. Duplex (69th st) brick early 1900s needs work.

I don't have much info yet and I don't know the exact level of rehab until I have someone on the ground inspect. Looking for general info on the areas and renting in such neighborhoods. Looks like definitely section 8 but with a decent property manager may be doable. Not looking for war zone nightmares but the returns look too good to be true. Total package would cost under $60k. Any referrals on an experience person on the ground would also be very helpful. These are all off market REOs held by a mid size bank.

Thanks BP nation, your help is really needed and appreciated!

Dion - fabulous and very helpful post. So helpful in my education. My goal was to get my feet wet understanding the offering and partnering w a seasoned note buyer. I have legal team on standby and will have access to the DD material today. I will review some of the actual contracts using your skepticism as my guide and post the details shortly. Would love the opportunity to continue this discussion and perhaps chat w you privately.

they are performing contract for deed. What is the difference? They are in many states and I'm just getting access to the DD. @bill gulley can you tell me more about the servicing aspect. Who are major services that would take a package like this and what are those costs? Would 25-40% of BPo price be considered a deal?

these are reforming notes mostly modified average rate is 9%.

Thanks. They are 96 contracts for deed and note modifications. Its a sale by an appointed receiver. The problem is they allow very little time for DD (less than 10 days) and one day to close but there is little competition.

They are all single family homes mainly midwest and Florida. Buyer is contractually required to record all quitclaim deeds.

I've been offered a note portfolio but have not had much experience here. Looking for guidance and what you would pay for this deal.

96 Contracts for deed and note modifications.

Total BPO value $3.29

Total unpaid principle balance $2.58M

Monthly principal and interest $21k

Also - who would you use to service the loan and what would that cost??