All Forum Posts by: Steve Londeau

I'm working on this deal with Mark.

I just did a quick title search on this and only found the one mortgage recorded against the property. The original amount was the 1.580M that Mark stated above. There are no other liens appearing on record currently. The taxes are paid and the bulk of them are due in the summer. ($35K of that total bill is due on the Summer Tax)

using the 50% rule, and a $550/month for each apartment, we come up with about $13000 for expenses. This leaves $13000 for PITI, which, according to the seller's old pro forma we were given, was approx. $10,500/mo.

I can't think of what else to add right now, but if I think of it again, I will. Appreciate any and all feedback regarding this, and especially looking for feedback from MikeOH.

Thanks BP Community!!

Steve

Originally posted by Chris A:

Mike please don't skewer me for this but I believe I have seen the "50% rule" in other books although it might not have that exact wording. I was reading "The Complete Guide to Buying and Selling Apartment Buildings" by Steve Berges last night and he used that as his way of initially screening buildings.

Now that I have said that, my experience has been that expense ratios typically fall around 65% (plus or minus 5) excluding vacancy rates. I've been using 50% as a conservative estimate in my calculations though and if a building is break-even based on those numbers then I explore further.

Chris

Let me just say that I know Steve Berges personally, and I would NOT listen to much he has to say as far as investing goes. I own some of his books, and I actually dug out the book you mention just to get a feel for apartment buying, as I don't know a lot about it. That said, I am taking much of what he says with a grain of salt, and using other sources. (I just happened to have his book) His business here is in shambles, and had he run it properly, it would NOT be. He had a good idea, but his greed got in the way. Anyway, just be careful what you listen to, that's all. Sorry I know that's a bit off topic, but I saw that book, and name, and had to comment. IMO, Mike is a MUCH MUCH more credible source for REI than Berges would ever be.

My unasked for .02. :)

Originally posted by Jeff Fairchild:

You work for a title company? You can't go asking who for that info, your boss? I can't tell if you are saying you are working"with" the title company that you are working for.
Why don't you ask your boss how you could get this info to provide for investors?

I work FOR a title company right now. At this current company, no, I could NOT do that. At a past company I probably could. Any real estate buying is off limits for me here, as it's seen as a conflict of interest. (but I can work and my partner can buy all we want. :P) I have to tread very lightly with real estate related stuff here. We are a huge title company under teh largest foreclosure attorney firm in the state, and likely the company. We handle all Fannie and Freddie files for Michigan, with many other banks as well. So, I need to mind my P's and Q's if you will on things like that.

What is your success rate at collecting Negotiation Fees, Loss Mitigation Fees, Admin Fees, whatever you call it (please include that as well, if you would) are you having with banks these days? I've never charged these fees, but I've only done short sales where I either bought, or walked... until recently. My current program allows for more options, and one of them is simply negotiating the deal and collecting a fee.

Are there banks that are better or worse for allowing fees? What % are you having success getting through?

I have a fee disclosure form that I am going to be faxing with every offer package. Do you have something similar (or an invoice, etc) and has it or has it not helped in getting your fees approved?

Thanks guys!

Yes, you need to fund the first deal and double close. There are many 1 day funding sources out there these days. (I'm not sure if I can post them or not, I'm not affiliated with any of them. PM me for some links, if you wish)

You can NOT assign a short sale. 99% of short sale approval letters I've gotten state that specifically, and you can not assign the option contract either.

If this is your strategy, yes, you should definitely build a QUALITY buyers list, that you trust, that can and will close quickly.

Typical short sale approvals are good for 30 days. You can get extensions, but its not always easy, and some banks will give you a very hard time about it, even so much as making you pay for an extension.

Hope that helps.

Steve

Ingrid is indeed correct. Many times proper Assignments of the Mortages are not recorded, or errors in legal descriptions of properties, or even no mortgage at all being of public record occur. When any of these items happen, it slows the process down. (Basically stops it) It doesn't go away, however, as the lender and/or their attorney takes corrective action. Such as getting the required Assignments, correcting legal descriptions, putting the mortgages on record, if possible, or filing suit to do so if necessary.

I see it all the time, actually. The point is, it will delay the action, but it will not stop it. It usually arises from lender or a previous title company error.

Hope this helps.


Steve

Originally posted by Joshua Dorkin:

Your title company can provide you with absentee owner lists and a TON of other different data, and they'll do it for free, but they want to know that you're going to use them when the time comes to close the deal.

I've heard this from just about every "guru" out there, and so on. I've worked at title companies for 10+ years, and I never ever recall anyone ever asking for that info, nor how we would get it, nevermind gettng it for free. Any other advice on this or tips? I WORK for a title company, granted, one I can't go asking for this kind of info from, but I work WITH a title company on deals that probably would, but I need to know how to present that to them properly. I do already take all of our deals to them.

Wow SAY is trading today again. Its at a whopping $1.17/share right now! I've got a --86.72% Gain. I freaking RULE at this stock thing! Errrr.... uh.... yeah.

Not necessarily true ^^

The hardship IS the fact that their job relocated. Make it seem as if YOUR job went away, and you HAD to make the move, not CHOSE to. That's the key, IMO. If the market won't support a sale, you have a case. Whether or not they accept it is another story. Have you ever listed the house? Chase is probably going to insist you try that before they accept a loss. Send them a package.

Offer
60 days bank statements
30 days pay stubs
2 years tax returns
hardship letter

Would you also use the 50% rule when evalutating Apartment Buildings??