All Forum Posts by: David Alyea

I gave my tenant a 10 day demand for rent letter, which she acknowledged. After a few days, she agreed to move out. By the 15th day, after the demand letter timeframe had passed, I still didn't have the rent in hand - but, she did in fact move out. The house was in good shape - no damage, and pretty well clean except for the carpet.

At this point, I'm out over $3,000 in rent due, not to mention that although I'm trying to find a new renter and likely have one now, I'm out for the vacant time. Her lease is set to expire in June 2012, so she is responsible.

I picked up the paperwork at the county courthouse to file for small claims court. My problem now is that although we still email back and forth, so I know her email is active, and although I've tried to get her new address (to forward 6 pieces of mail that have arrived), she's not biting, and she's not giving me her new address. She's moved out of state, to NY. I have her mother's name, and I think I have her address, and she is on one of the bills that came to my house, since she paid the electric bill. I know I have to send my complaint via certified mail with return receipt (requires signature). Does anyone have a suggestion on how to find her address and to properly serve her?

I also have the form to release the complaint. My goal is to settle with her for 60% of what is owed so that I can save myself the time and hassle. But, I know that if I emailed her about this, it'd go nowhere. So I have to take this step to formally pursue the rent due, and then if she doesn't comply, I'll go to court and win a judgment against her. Any advice about how I'm proceeding in this regard?

Thanks for the replies. Everything said makes sense. I'll be setting up the LLC in North Carolina, so I'll have to check into the applicable laws there.

Ideally, the investors in the LLC would need do nothing more than contribute money. But it sounds like that might not be possible in order to get financing.

David

I want to form an LLC solely under my name, and I've got 3 partners who wish to invest in buying real estate. We will get 4 houses, so each of us effectively owns 1 house. Each house will be held in title under the name of the LLC. I will conduct all finding, buying, accounting, property management, etc. for the houses. Collectively, the 4 partners will come up with the 20% down + closing costs to get each house and then split all expenses equally.

My concern is, how do I get financing for houses under this setup? The LLC can't really apply since it doesn't have a job (!) or assets per se. I could have each partner be responsible for getting financing, but that seems messy and defeats the purpose of just having investors contribute to the LLC. Any ideas how to handle this scenario?

Thanks!

I have a house that I'm renting out and I'd like to sell it to the current renter.
I hold a 1st mortgage only and the title of the house is in my name. I don't think the renter could get financing. So, what are my options for selling her the house?

I would carry the note, except of course I would still have a mortgage, so that doesn't make sense. I could do a lease option, but I'm really looking to have the renter have home ownership immediately. Any other ideas for this situation?

Thanks!

Thanks for the reply. I should have clarified options (2) and (3) to indicate that there is a legal document - this obviously wouldn't be a handshake sort of thing! But regardless of that, your point is absolutely taken and understood about how things could (and might verywell) go down given that he already isn't paying the bills.

The best thing is the 30% less than lower end of comps suggestion for
a ballpark figure. I see now - and in consideration of all the things that could go wrong even though the house is pretty prime right now - that I ought to help solve his problem, put a little $$$ in his pocket, but make it a deal for me since I'm the one stepping in. Assuming clean title and no other positions and no back taxes and no pending lawsuits tying up the property in any way (lotta research...), his $144K first might be worthy of a $160K buyout tops, with him covering legal fees. Then 70% of $210K (lower end estimate) is $147K and is ballpark, given all the other variables in play.

David

Thanks - those are all excellent points. I've thought about it more, and even though I'm trying to be fair, maybe my first thought was too fair really. The area has average DOM of 27 and is generally well received. I would buy and hold, so no worries on capital gains. Tomorrow, I'll go talk to my new "friend" (!) again and see what transpires. Thanks again for your response.

David

Hi all,

This is my first attempt at buying a pre-foreclosure house. The first step went amazing well, but now I'm not sure how to proceed. I thnk it's a deal, but please help me to decide.

I saw the notice of default and drove to the neighborhood and talked to the owner who happened to be in the front yard getting his paper. The conversation went great, and I was clearly the first one to talk to him. I know from the notice that the first mortgage is $144K and that the house would sell for about $215K so there is lots of room. He knows, as he said in the conversation, that his house appraised for $179K 3 years ago and that there are other houses in the area in the $210K+ range. But he's in default, so... I think a fair price for both of us is about $185K. He gets out of trouble and pockets $40K (I don't know if there is a 2nd or 3rd position or back taxes at this point) and I get a house with $30K in equity. Now that I just typed that, I suppose $180K is a more fair price!

How do I proceed to get this property? I figure there are three options:

(1) get an agreement from him, get it inspected, buy it for cash - that would be ultra-fast and get him out of trouble - only of course I don't have $180K lying around

(2) help him get paid up for all his debts in exchange for him selling the house to me, and then I get traditional financing - what are the exact steps here, though?

(3) I get him paid up, and then we have a legal agreement that we "co-own" the house and he has to keep making payments, and if he doesn't, I can buy the house for a pre-determined price if he gets behind again - I read about this somewhere, but it's not clear how this would work to me

I'm leaning toward (2), to draw up a legal document saying that he is selling the house to me, and at the same time, pay off the bank for him and get everything level so that the sale can go through and I have time to get conventional financing.

Any ideas? And does this look like a good deal?

Thanks-
David

(I posted this first in the deals forum but then found this forum, which is much more appropriate for my question.)

Hi all,

This is my first attempt at buying a pre-foreclosure house. The first step went amazing well, but now I'm not sure how to proceed. I thnk it's a deal, but please help me to decide.

I saw the notice of default and drove to the neighborhood and talked to the owner who happened to be in the front yard getting his paper. The conversation went great, and I was clearly the first one to talk to him. I know from the notice that the first mortgage is $144K and that the house would sell for about $215K so there is lots of room. He knows, as he said in the conversation, that his house appraised for $179K 3 years ago and that there are other houses in the area in the $210K+ range. But he's in default, so... I think a fair price for both of us is about $185K. He gets out of trouble and pockets $40K (I don't know if there is a 2nd or 3rd position or back taxes at this point) and I get a house with $30K in equity. Now that I just typed that, I suppose $180K is a more fair price!

How do I proceed to get this property? I figure there are three options:

(1) get an agreement from him, get it inspected, buy it for cash - that would be ultra-fast and get him out of trouble - only of course I don't have $180K lying around

(2) help him get paid up for all his debts in exchange for him selling the house to me, and then I get traditional financing - what are the exact steps here, though?

(3) I get him paid up, and then we have a legal agreement that we "co-own" the house and he has to keep making payments, and if he doesn't, I can buy the house for a pre-determined price if he gets behind again - I read about this somewhere, but it's not clear how this would work to me

I'm leaning toward (2), to draw up a legal document saying that he is selling the house to me, and at the same time, pay off the bank for him and get everything level so that the sale can go through and I have time to get conventional financing.

Any ideas? And does this look like a good deal?

Thanks-
David

Hey JZanello,

I'd like to learn more about properties you have in those areas.
I just started looking in the Boston market. Send me an email
offline.

David