All Forum Posts by: George Ramsay

whew oh boy just when you thought things would be easy....

So borrower is not comfortable with certain language in the draw agreement I've got. 

To place into context he has signed

-Promissory note

-Deed to secure debt

-Personal Guarantee

He feels that the language in the draw agreement is unnecessary as we have already secured the loan. 

I'm not comfortable removing language in a contract so I'm doing what i can to address concerns as Id like to find some common ground. I've offered to re-word the clause but he's asking to have the clauses removed. Open to all constructive ideas/feedback

TIA

3.Should Borrower fail to complete all of the improvements by the maturity date of the promissory note from Borrower to Lender, then Lender may, at Lender’s option disburse any remaining undisbursed funds to an independent contractor or subcontractor for the purpose of making any of the improvements win the above property which Borrower has agreed to make but failed to make.

5.Should Borrower become in default pursuant to the promissory note or deed to secure debt pertaining to the loan described herein, so that Lender declares such loan to default, then any undisbursed funds may, at Lender’s option, be paid to independent contractors or subcontractors to perform any improvements on the property described above prior to Lender bringing legal or foreclosure action to collect such note, in order to protect Lender’s collateral.

Thanks guys, 

For a number of reasons I wont get into, we didn't execute a draw agreement. Fortunately I've known the borrower for years through our investment group so should be easy to write one up. Simple answer. :)

Thanks again for the response and your help. 

Hey everyone

I have a noobie question I was hoping the group could help out with. I'm doing my first construction loan for a rehab project and gave the first draw to the borrower. Draw was based on invoices and receipts. Borrower asked if I would do the draw more in line with hard money lender policy and allow draws based on his scope of work estimates. So for instance, if he gets the kitchen and bathrooms done for $18,500 but his scope of work estimate is $20,000 he would get a draw for $20,000. Right now im giving him draws based on paid out invoices. 

Appreciate any feedback

Hi Chris, 

Ive done some basic private lending over the years. Ive always had borrowers make their payments directly to my LLC. Why are you looking for a servicing company?

Just wondering...

Hello everyone, 

I have a Tenant that has decided not to renew the lease and asked for 60 days to move. Which im fine with. I've been managing my investment properties for about 10 years and this is the first time ive had someone decide to move out.  Just a little background on this property. I bought the house a few years ago but stopped doing cosmetic rehab to the house due to the behavior of the tenant. I made some structural changes to the house to provide clean water and electricity and raised the rent to market value. I decided that further cosmetic work on the property with the current tenant would be a waste of money. Point being that im not too concerned about an inspection or keeping the security deposit unless there is major damage to the property. Once the tenant moves out ill be going in to redo the kitchen, bathrooms, painting etc. 

I'm more concerned about drafting a proper move out letter that specifies move out date, and anything else that needs to be officially stated. Also there is specific language in the lease that gives instructions for the surrender of premises and security deposit, So not sure if i need to restate that or not. 

Any thoughts on best procedures would be appreciated 

TIA

Thanks to everyone for their input, sounds like the best idea is to get a lawyer who can negotiate for a flat fee if thats even possible. But at least thats a good place to start...

@ MattG-The lots are in Midland Texas, and a little under an acre from what the wife tells me. 

@ Rita- LOL....As a residential flipper i thought the same thing...I just wouldn't even know what would be a reasonable counter offer

@Joel Owens- Hard to say as we are about 5 states away( I count Texas twice) Were certainly not in a position to build on them. Property apparsial has the lots listed at $4000 a piece

Thanks everyone

Apologies if this should have been posted elsewhere but seemed to fit here....Out of the blue my wife has been approached by an energy firm looking to lease 2 lots that she owns For the express purpose of paying royalties on the mineral rights. The offer is $600 lease for 3 years with the option to renew the lease for another 3 years an $600. Although that seems a little lowball to me there is an 18.75% royalties on top of that. I frankly don't know the first thing about mineral rights and was hoping someone could help point me in the right direction and offer some constructive feedback. Thanks!

Interesting thread....

For whatever its worth Eddie was at one of the Atlanta REIA's tonight and pitched his note school with 2 different 3 day classes, scheduled at different locations throughout the country. One class was for NPN and another one for PN. I was interested in both classes but as i have a full time job and young kids i wanted to see if there was any flexibility in when i could take the 2nd class, which was NOT offered in the Atlanta area. Specifically i wanted to know if the NPN class would be offered in the Atlanta area within the next 9-12 months. The conversation went as follows

ME: Hi I was wondering if there is any flexibility in taking the class that is not being offered in the Atlanta area.

EDDIE: Oh Sure you can go to anyone of the other locations.

ME: Im sorry, i ment will there be an opportunity to take the other class at a later date in the Atlanta area, say within the next year.

EDDIE: Son if your not prepared to take advantage of this amazing opportunity in note buying then you just dont have the entrepreneur spirit to be successful. Im just telling you that as a tough coach, and i don't think you should waste your money.

ME: uh huh....Well thanks i appreciate your honesty.... So your not scheduling anything else after March?

EDDIE: No No (laughs) absolutely not. Son let me tell you what i'm doing tomorrow. Im seizing the moment to be an entrepreneur. Im going to take advantage of this opportunity to fly to Dallas tomorrow to teach a five day seminar....

ME: Yea got it, thank you, Appreciate your time and good luck.

So to sum up, i wont be learning about note buying with Mr Speed. Because although he doesn't know my name or investing background he does think im a sucky entrepreneur. 

HI, 

Recently acquired a rental unit with a long term tenant. After a 60 day trial period of improvements and a rental increase i've agreed to allow the tenant to stay. The Tenant would like to replace the carpet which is perfectly fine with me. However I'd like to get something in writing that specifies the work, states that no credits will be given towards the security depots or rent, tenant is liable for any damages that occur, etc. I've been searching for a letter that would cover all the legal things like 'tenant improvements' but haven't come up with anything. So if anyone has one or can suggest where to get one i would appreciate at.

Thanks

George

Whenever we refinance our rental property we just quitclaim it into one of our personal names, once the loan is processed we quit claim it back.

If we went the commercial route the terms wouldn't be as good, and it increases the way the insurance gets written up. However considering you have a 3 unit rental property that might be a better option.