All Forum Posts by: Simon Ghandil

@Rodney Sums Ha! I'm actually closing on property #2 today. We'll see what happens. :)

@Patti Robertson Wow I did not know about the Cradock crawl, and I did not know Ptown was so strict on things like that. I only knew that they were extremely expensive when it comes to taxes. Thanks for the invite, I'll try to stop by your lunch. I'll bring both of my documents if I come, both created by Caplan. 

@Rodney Sums 

1. A lot of our buyers are self employed. Usually contractors or someone with a trade. Most of the time it isn't even bad credit that doesn't qualify them to get a mortgage from a bank. They can't prove their income, they have a high debt to income ratio (because they can't prove their income).

2. If you have bad credit, that doesn't mean you have no money. We sold a house to a contractor in Hampton who was a retired contractor who worked for NASA, but his credit was shot down due to a divorce. He looked at the house, and brought $5k down the very next day and the first months payment no problem. Have not had any issues since he moved in. 

3. They own the house. We use a land contract, so they are owner via contract not by deed. They have the same home owner capabilities regardless.

4. A lot of our houses we purchase aren't worth $30k when we purchase them, we only purchase good deals. This house I purchased in this thread is easily worth $55k, then when its all fixed up cosmetically will be worth even more. What kind of an investor purchases homes that aren't discounted!

5. Weather it passes inspection is not up to me. If they want to refinance, they have to be good home owners and take care of the home. To this day, I have not heard of any buyers have any issues refinancing due to inspections. 

6. Again, we are not selling the property for $30k when we sell it to a buyer. They are also not uninformed. We have paperwork that go into great detail what they are getting themselves into, then we have one more page that repeats EVERYTHING that they are getting into, but broken down into 5 sentences. They have to initial by that. Again, we have not had any issues with being completely open with people. Its easier when everyone is on the same page. 

7. There are not many people doing this in my area. We fill our houses within 1-2 weeks, and as I mentioned I helped my mentor put buyers in his homes for 8 months so I first hand learned how this business works. It works as long as your ethical and don't hide anything. If we had a high eviction rate, I could see the issue, but we don't.

@Account Closed The sales price isn't $30,000. The sales price of the home is below retail, but not that far below retail. Depending on the comps, I price it so whenever the house is all fixed up, there is still a reasonable gap between the sales price and the ARV. A lot of our tenants have bad credit (or else they'd get a traditional mortgage) and the second they can qualify to refinance, they can refinance and obtain a conventional loan with a bank. The fastest someone has refinanced within my group of investors I speak to, was 1 year and that was because hospital bills were holding her back. Once that was paid off, she went and refinanced and everyone was happy.

I'd also like to clarify, our eviction rate is pretty low. We don't collect a non refundable option consideration from a desperate tenant, evict him or her 3 months later and collect another non refundable option from someone else. If I was looking for desperate tenants, I would not have any qualifications. 

@Linda S. you seem to be under the impression that my tenants make $1k a month and I'm moving anybody in my homes. I have my qualifications that have to be met so I know that payments will be made every month, and that they can be reliable.

You are also under the impression that I'm moving people into homes that need $15k in repairs. I won't buy a house if it needs a new roof, or if the foundation needs to be worked on. This house is a perfect example. There are no major repairs needed, the bathroom is the biggest expense. Other than that, it has great bones, a fairly new unit and roof and very sturdy wood floors. 

All of my tenants have to make 3x the monthly payment and have to have great references before they move in. 

If you want to call me out, make sure I'm doing something incorrect first. Thank you.

@William Walker if they choose to stay for 30 years then yes. They have the option to refinance with a bank whenever they are qualified to do so, so they can have much better terms. Most people don't stay for the full 30 years, so either they refinance, or we evict them then get another down payment from someone else and owner finance it to them. We use the same amortization schedules as the banks. 

@Osazee Edebiri This house was purchased with my own cash, so I have no borrowed money in this deal. When I borrow money from a private lender, it's for a 5 year term, at a 12% annualized interest rate so my payments to my lender will always be $667 a month. 

@Jeb Brilliant feel free to send me a message, but make sure you know the laws in your area specifically first.

@Jon B. My mentor has close to 100 homes using this system, and all of our paperwork is written by the top real estate attorneys in my area. I have no worries about getting this filled, my mentor has almost 100 properties using this system and he only has 2 vacancies, and whenever I have helped him find tenant buyers, it takes us 1-2 weeks to get them filled. If I decided to strictly rent them out (which I would never do) I would spend thousands to rehab the interior, moving someone in and then worry about my phone ringing in the middle of the night because the pipes burst. I would rather buy them cheap, then sell them owner financed right back to tenant buyers. 

@Brian Garrett Not a fan of refinancing, I want to maximize cash flow. Getting new properties isn't an issue either since the houses I purchase are typically $30k or lower. There will always be private money for that, and my own cash from time to time. 

@Nick Robinson I operate just like a bank. 30 year terms usually, and the interest rates vary with the sales price of the property. 

If I'm not paying cash for the house, I'm borrowing the money from a private lender and having the house paid off in 5 years. There are no rules to when you can start doing lease options.