All Forum Posts by: Josh Sterling

I had one property where my guys tiled the floor first then put the cabinets down. Sure enough... we had to drill a couple holes through the bottom of the cabinet for water lines which was a real pain due to the porcelin tile underneath.

I think you are on the right path here. I would try to use leverage as much as possible getting into the game because its harder than you think to use a free & clear property for leverage later.
I did a property that was pretty much turn key for my first rental,
Benefits:
-You start seeing income right away.
-You don't have to worry about going over budget on the rehab.
-It lets you focus on the business side(finding tenants, listing the property, collecting applications etc) with a clear head because you're not trying to do all this at the same time as trying to tie up a rehab.

The biggest downsides are that you are going to have to pay a small premium for a property needing very little work and even if it has been remodeled by someone else, you will probably find that you end up doing a nicer job for less money when you manage your own rehabs.

You seem like you have strong goals and are very logical. I would bet you will be successful in real estate. Good luck with whatever you do.

I have a judgement from a former tenant for $1700. I didn't think I would ever see any of it so I tried to work out a deal that if he paid me $100/month for 10 months I would accept $1,000 as payment in full.
Well believe it or not, he actually paid for 8 months in a row, then he just stopped. I can't believe someone would put all that money into a settlement and then just stop without paying the last $200.
Anyways, our written agreement said that if he didn't complete payments on the settlement as agreed, then the settlement would become void and we would seek the full judgement minus the amount paid.

So, since he will not be paying the last $200, at least I want to get the satisfaction of making this show up on his credit report.
How do I go about getting this to happen? Is it automatic when a judgement is awarded or do I have to notify the credit bureaus?

Looked at the zip code, I personally wouldn't buy there. I'm not saying it's a war zone, but it is in very close proximity to some of the worst areas.

Jeff- you are right on the taxes, I usually pay 2500/yr on properties I buy for 30k

I'm also in the Detroit metro area, if it is in the actual city of Detroit it will most likely be a rough area. When he says west of Detroit, if he means a west suburb, then it could potentially be ok.
Find out what city it is in and let us know.

I would make sure not to have ANY additional hard inquiries. Also agree with Jon on trying to pay down at least a couple of the cards to less than 50%(If the balance is on multiple cards)

What bank are you working with on the line of credit? I'm in the Detroit metro area also and have been looking for similar financing.

Thanks for the replies.
I have been looking into this and it appers that the MERS issue was more of a paperwork issue involving improper procedures used during the foreclosure process. Therefore the foreclosure process will have to be repeated, but it will come out to the same result (same bank will own the property in the end).

Its not like they are going to go back to these people who stopped paying their mortgage 2 years ago and have long since moved and say "here is your house back because we screwed up the paperwork on the foreclosure."

Has anyone else out there experienced this?

Thanks

We have a REO property under contract that is supposed to close in less than 2 weeks. Last week we got a title commitment from the title company stating that the title was clear. Today we found out that there is a problem regarding MERS (Mortgage Electronis Registration System) and that the forclosure is invalid. They said that they would have to complete the forclosure again which could take 2-6 months.

Shouldn't the seller have known about this ahead of time? We now have quite a bit of money commited to this property due to inspections and the cost of transfering funds.

Even if the new re-forclosure process takes 2-6 months, can we get a long term contract extension so we can still purchase this property when it eventually comes back on the market, without having to re-submit offers and compete with other buyers?

Just doesn't seem right to me that we can have a property where they tell us we have a title commitment, we spend a bunch of money on due diligence, and then they can't go through with the deal and we are stuck with the loss.

Thanks in advance for any responses.
SR

Hi Chris,
It might be possible but I wouldn't hold my breath. I just spent the last 2 weeks calling every bank I could find the number to, looking for cash out refis or lines of credit on about 200k worth of free & clear property. Most banks had no interest at all. I got 3 of about 30 to at least set up an appointment with me. Of the three appointments they were either portfolio lenders or on the commercial side. They all wanted alot of documentation including tax returns.

JScott,
Exactly what I was looking for. Thank you. I know you said you have a "team" of handymen/general laborers- how many do you feel is the right amount of people to be going on a property at the same time and still keep things efficient?

Also, did you hire each of these guys independantly or hire a crew that was already working together?

Did you have them bid the job or do you offer a price you are willing to pay and have them accept or decline?