All Forum Posts by: Clay Smith

Try Mark J Kohler at http://kohlereyrecpas.com/

 We will be there December 15th at 6pm.

Anyone know where I can get cash for old appliances? Need them to pick them up.

I do not have anyone. I would try yellow pages , landscaping company referrals, angie's list, or craigslist. I find Facebook works well also.

#commercialpropertyproblems

In my experience the attorneys I use could walk you through a probate with ease. It does not sound like a flip. So few sqft makes this unattractive to me as a flip. Does sound like a rental. Has to be a 1 or 2 bedroom at 750sqft.

Just get it under contract. You can always renegotiate afterwards as you discover more things wrong with the property. Someone will buy it cough* cough*

Familiarize yourself with this law before going.

426.530 Right of redemption -- Manner of redeeming -- Purchaser to receive writ

of possession and deed.

(1) If real property sold in pursuance of a judgment or order of a court, other than an

execution, does not bring two-thirds (2/3) of its appraised value, the defendant and

his or her representatives may redeem it within six (6) months from the day of sale,

by paying the original purchase money and ten percent (10%) per annum interest

thereon, and any reasonable costs incurred by the purchaser after the sale for

maintenance or repair of the property, including but not limited to utility expenses,

insurance, association fees, taxes, and the costs to conform the property to the

minimum standards of:

(a) The local nuisance code as defined in KRS 82.700; and

(b) Local ordinances as defined in KRS 65.8805.

(2) The defendant shall pay the redemption money to the clerk of the court in which the

judgment was rendered or the order of sale was made. Upon payment by the

defendant, the master commissioner shall convey the real property to the defendant.

(3) When the right of redemption exists, the purchaser shall receive an immediate writ

of possession and a deed containing a lien in favor of the defendant, reflecting the

defendant's right to redeem during the statutory period.

Effective: July 15, 2014

History: Amended 2014 Ky. Acts ch. 107, sec. 1, effective July 15, 2014. -- Amended

1982 Ky. Acts ch. 216, sec. 1, effective July 15, 1982. -- Recodified 1942 Ky. Acts

ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 2364.

 This can meet a fee things. 

• Wholesale deals
• Network deals
• MLS day 1 or 2 offer accepted, then negotiate through inspection
• Off market sales.

I have been a couple of times. It is an interesting experience to go once and see the action. As a part time investor I don't care to research a property and then enter a bidding war. Feel like you have to spend a lot of time and have enough money to be flexible. 

I prefer my deals monopolized to help save me time. IF I had more time I would go.

I have done a lease option where I sublet to a renter. I later converted it into a second lease option with the tenant. I have never done a sub2 but I have a clear understanding of how. 

The reason a "subject to" existing financing is attractive is the no/low money down. However, that puts risk on the seller; making a sales pitch more difficult. It also means you should be targeting houses that need very little work, to avoid putting money in the deal.

I do not like this method of investing as a primary business strategy. It is hard to find a lot of well maintained houses with distressed owners. You may spend a lot of time looking for them. 

You may be thinking, when would I do one as a low/no money down strategy? What is a possible scenario?

SCENARIO 1: flip, then finance/sale

There are times when it makes since to purchase as a sub 2, renovate and then cash out. You can then add value through a rehab. This will help you avoid putting 20% down because you own the deed and can finance the subject to lender out. Great way to get around a 20% down purchase; and avoid the carrying cost associated with a purchase.

SCENARIO 2: buy & hold

Expired listing or 365 days or more of DOM.

• When sellers have listed a property for a long time, wants to move, no one has bought it yet. Maybe 1yr+. These people probably listed too high to start.
• They are atleast a few thousand below break even on the market price. 
• The monthly debt service is atleast $250 less than I can rent house for.

How would I structure it?

• I look to see when they purchased and at what price (try Zillow). I would plug info in a calculater. Look at an amortization scale. 
• Next, decide when the remaining principal balance will be at 80% of projetted appraised value. 
• I then set the sub to loan length equal to that value. I set sales price equal to the future principal balance. 
• When the time is up I will cash out finance at 80/20 and walk away with no money down. All the while having profited monthly and still getting the benefit of a principal payment.

You will need conteacts/forms. I have 7 forms I plan to use for a sub 2. It involves setting up trusts, poa, the right to contact lender, sale, etc. After I get a contract I would due dilligence with lender, pull title, do inspection, and renegotiate as things come up.

What else do you want to know?