All Forum Posts by: Ed W.

@Ashley N Tauriac You've received a lot of good ideas.  I'm not telling you what to do, just offering a point of view.  As many have suggested, selling now - assuming there are no significant facts you haven't shared (or even know are necessary to share), is the way to go. It's hard to manage from afar and, even worse, you don't even have a depth of landlording experience to help you.  Again, sell. To get better advice, contact 2 agents in different offices and have them give you the price they believe they will actually sell for - not what they intend to list them for.  Don't tell them about your stress.  Just give them the facts about the deferred maintenance, the rental rate, whether the tenants are paying or not and that should allow a knowledgeable and honest agent to get in the ballpark about what they should sell for and how long it will take to actually close.  After you have that information AND the mortgage balance and monthly payments (including taxes and insurance), post it here and you should get better-informed opinions.  Like I said, I'm in the "sell" camp for numerous reasons but the information I'm requesting could have me (and, perhaps others) alter it in some way.

@Joe S. "

"Really depends on the judge. We stopped doing them in ohio and just did note and mortgage but 20% down as with cfd’s Toledo Akron and Cleveland will target out of state owners and fine them and make you complete rental agreements..."

An accomplished real estate attorney, friend and legal advisor of many years handled some foreclosures in Cleveland and was frustrated as heck with the activist judges there. He felt they often ignored the law. Since Cleveland, Akron, and Toledo are all in northern Ohio, it's not inconceivable they learned some bad practices from each other. That said and with the caveat that I'm retired and I'm not quite on top of things as I once was, I've not heard of those problems anywhere else in the state. I'd check the REIA's and COREE's in central and southern Ohio to determine if they are still unaffected by judicial over-reach.

@Marc Rice  It's certainly a valid point to make, Marc, but you don't suggest why you are making that point.  Are you saying that what was achieved in the deal that is the subject of this thread was good enough because it's better than most commercial debt? It's a valid point but so is offering what might make the deal better/safer if the circumstances allow which was my point.  The core reason to try for seller financing is to achieve one or more loan terms that are better than you can get with an institutional lender - faster closing, lower interest, faster qualifying, lower down payment, longer balloons, longer term, some discount for early payment, less cumbersome qualifying standards - the list goes on.  Each of those is helpful and some are extremely helpful.

@Jay Hinrichs  Thanks for the clarification.  We're on the same page.  

@Jay Hinrichs  I'm on BP very little but you are clearly one of the most prolific, experienced, accomplished and knowledgeable posters.  That said, I'm not understanding your post (most likely due to something on my end, not yours).  I've done many seller-financed deals - both short and long-term, wholesaling and holding for rentals.  A truly good agent can, no doubt, help in a variety of ways but there are typically not many good ones to choose from and I've done all of my seller-financed deals without agents.  

@Jimmy Lieu A tip of the hat for a good use of creative financing.  However, with all due respect, a 5-year balloon sounds like a good deal but that 5 years will go by in a flash and there is nothing set in stone that says the interest rates will be lower.  I don't even remotely expect it, but peak Fannie/Freddie interest rates went to 14% in the early 1980's (prime was over 20% for a short while), I think they were 8ish in the early 1990's and, with relatively minor fluctuations, ended up 3ish and even lower in our recent history.  It's easy to find graphs that are more accurate than my memory that give a more comprehensive "look" than my feeble memory can provide.  

I grant you that over the next 5 years Columbus is far more likely to show appreciation than stagnant or lower prices but that is a likelihood, not a certainty. Who predicted Covid in 2015, 5 years before it turned a lot of the economy upside down?  Is that likely to happen again?  I doubt it but if China or Russia or North Korea become more bellicose or some significant blunder happens in another country that has great effect on us - it can hit the wall again.   I told a group of investors - guys like me - on a conference call in 2020 that while (in my belief) it was important to print dollars to keep the country afloat and help people trapped in their homes to have a way to eat, heat their homes, etc., the end result would be inflation.  Was I right?  I don't know, our inflation today may or may not be entirely the result of that needed cash or even related at all. 

The point is, none of this stuff is easy for the Fed to figure out and the average person on BP - especially me - is far less equipped to figure it out. I believe a better circumstance for the buyer would be to have an option to "buy" another 5 or 7 or 10 years of balloon extension for some enticing payment of principal (say, 5% or 10% of the outstanding principal or of the original purchase price) or, and far less ideal but that may prove to save your client's butt, some hopefully lesser amount of a payment that doesn't get applied to principal but that buys a good extension.

@Mike Hasson

I agree with those who have said there are no "FHA Police", don't believe there are, but I fully agree with Mike Hasson and some others. You've already declared that your room is designed as a subterfuge - re-read what you wrote. When authorities are trying to determine whether a crime has been committed, incriminating statements on the internet is low hanging fruit. Those words may also be seen by a future employer. Not good. And, worse, there are so many legitimate ways to accomplish various goals in real estate, to get in the habit of breaking the law (or potentially breaking the law) is, frankly, stupid and unnecessary. Time and money are both better spent learning better ways of accomplishing your goals legally and they are available to learn right here on BP (at least by way of introduction to them) and Mike Hasson gave you some specific ideas.

Listen, I'm now retired, rarely post on BP, and I don't give a darn if you take my advice or not, but hopefully some newbie will be deterred from being UNNECESSARILY stupid.  I personally know of one guy who went to jail for totally unnecessary real estate practices (btw, he had about 400 properties but he was a lazy s_b and took every shortcut you can imagine as a regular practice on repairs, loan apps, docs - the works) - was 400 being a success at the price of going to jail?  I also knew another who literally blew his brains out as a result of getting caught by the feds.  Learn the business, put honesty and integrity and knowledge and ethics high on your list and you will be miles ahead and sleep well.  Or not - it's your choice.

@Ben Layman

Mark your calendar, Ben, and after the triennial reassessments re-check the taxes on the higher-priced properties to see if they are more in line with yours.  My guess is that they likely will make more sense.  That being said, I wouldn't wager 25 cents that will actually happen.  It should, but I've seen enough properties (including some of my own) that significantly defied any logic known to man.

(I appreciate your request but I'm retired now, rarely do deals, and I rarely spend any time on BP.  I've always enjoyed the business and enjoy keeping up with what's going on to a minor degree but I would not be a good fit relative to your request.  I responded to your post because I thought I had an insight that I've rarely seen.)

@Ben Layman

By way of clarification, everything I told you earlier about estimating Franklin County real estate taxes has worked well for me for many years.  It's not meant to get you to the exact number, just to get you in the ballpark.  However, the county sometimes does weird things for reasons totally unknown to me and values properties too low or too high (more often too high than too low - no surprise) and then my estimate goes out the window.  Most of the people I know never get around to mentioning to the county that they think their taxes are too low :).  If the taxes appear to be high relative to truly comparable properties, you have recourse to the Board of Revision if you file on time (not even 1 day late) and can make a very good case (usually need an attorney and an appraisal by a licensed appraiser) and, even then, I hope you are a devout person because you'll probably need the Good Lord sitting at the table negotiating for you.  Columbus City Schools (and maybe others) has a full-time attorney working these cases to protect their interests (tax money) and the attorneys are very knowledgeable, capable, and aggressive.

@Ben Layman  I re-read my comment related to your post and I can see how it could easily be construed as a negative comment. If that is how you read it, I apologize, I assure you that was not my intent, just a product of writing too quickly and thinking too slowly. Your remarks were exactly on target, I just added the "frosting".