All Forum Posts by: Curt Smith

I see I didn't mention in  my original post I give out a training pdf with all docs as examples of how to edit and explainations, free, as a help.  Connect with me, and PM I'll send this training.

@Bill B. tnx Bill, True the installment sale, irs form 6252, has line 11, costs of the sale.  Where I'll report my legal (etc) expenses through the foreclosure (and a BK) process.

I have other notes (6252s) but none have sold or FC'ed.

tnx

@Bill B.  The FC attorneys are the source of FANNIE guidelines for legal fees AND lender fees being "recoverable".  A lender is different then a buy and hold investor re the regs that apply.   Hiring an attorney to file FC is equivelant to putting in an alarm system to protect your flip, its an expense.  The lender is allowed to charge fees to manage a delinquent loan.  But I agree this info is 2nd hand via the  attorney and not 1st hand from reading statute. 

@Jay Hinrichs you are an uber expert in this area. Whats my cost basis in this FC gotten back the house? Can I pick the cost that is favorible. The FMV is not in my favor since its low. My true costs seems to me to be both a reasonable basis and financially the actual costs; balance+expenses.

Just pondering taxes;  the installment sale receives interest and return of principal.  the notes basis is what I paid to buy it.   I'm guessing for the purpose of ending the instalment sale there's a sale as of the auction of the "balance" as the sale price.

Converting to a rental is a Sched E with the basis being the credit bid;  $bal + $expenses + $rehab till "inservice date".  blabla re expenses vs increase of basis there after.

tnx, curt

I did search BP on this topic. Apologies if I missed a thread! I am almost an expert in RE taxes and self file. Just currious re any unforeseen issues with foreclosing the note AND getting the property back with FMV (fair market value) below my credit bid (the price I gave the auctionier as the min price I'd take).

FWIW's

- FANNIE and my note allows me to protect my note by spending funds on legal etc to cover Notice Of Default,  Legal services,  Foreclosure service.  So I spend $$ on legal etc through the life of this note.

- FANNIE and foreclosure statue in my state (GA) allows me to "recover" my expenses through servicing, protecting, managing this note.  I added my hours x $NN hourly rate to manage this performing --> gone non-performing --> foreclosed.  For a fee of $YYY added to my balance due plus $Legal fees paid to others.

- Interest income is just that

- Expenses in the tax year are prescribed as above. Any feed back?

- The Balance was say $50k,  total expenses $25k, credit bid at auction = $75k.    In fact my total costs is the credit bid since I paid out of pocket legal costs and my hours.

- Post auction;   paid for a BPO (broker price opinion) and the value is far lower then my total costs (the credit bid),

== Tax filing Questions start here.

- How do I treat the loss in value between the new lower FMV vs my costs (the credit bid)??

== Converting to an investment property by me rehabing?   If I sell as a flip?   if I keep as a rental?  Cost basis?

- Is my costs basis my $creditbid total costs? Since this is to my advantage (the higher number vs FMV) when converting to an investment property.

Tnx to all,  curt 

Hi Donnie, Creative's added feature is it pulls in FSBO and Expired leads from a 50mi radius from any number of zips you give them. I'm not certain of costs... I think $75/mo per zip. Plus what ever the current base mo charge is.

What ever deal scenario you have expertise in for FSBO or Expireds. This platform markets a canned message script (you could edit it but creative is sold as a business in a box and I've never edited the script).

The creative platform does what it says it does! The reality I can report is that even though more MLS listings are expiring or being withdrawn those sellers aren't particularily motivated so far. The rumored financial stress from forebearance rolling off never arrived (last year) and I'm not seeing anyone selling who's behind on payments. Least that I've turned up. I'm letting you know that deals will have to be worked for. They won't jump into your lap.

I have zero complaints with the tool or the lead flow.  I know of no other SMS tool like creativereireply that pulls these leads AND automatically starts a SMS message flow looking for the seller to reply.   Once they reply its up to you to dialogue or call them.  You can call through the system..  Too many features to go through.

Good luck!,  Curt

Quote from @Logan M.:

The biggest issue you typically run into on "Due on Sale" clauses is when the seller cancels their insurance. My suggestion would be to pay a little more to cover both insurance payments, don't make it an option for the seller to cancel.

I only buy sub to to keep as rentals.  When you buy from the owner their insurance is "occupant" insurance.  Post closing, using the doc style I help training on (Connect then PM me) I CANCEL the owners policy and replace with my renters policy,  adding the borrower(s) interested party, my trust as named insured.  I get many POAs, a trust etc at closing to allow me to manage the insurance agent/policy which I will cancel and the bank which I will change the mailing address then setup auto pay.   The goal is to auto pay everything.
Best to all.  curt

Quote from @Susan Patino:

How do you start the process of renting to insurance companies?   We have several properties in FL and these would make great temporary housing during hurricane season.   I have spoken with several insurance companies, and no one seems to know how to start this process, get on the available rental list, etc.   

Any guidance would be greatly appreciated.

@Susan P   Insurance cos outsource the housing to housing brokers who scan zillow etc.  Its these housing brokers that need to be contacted AND if the ins cos don;t know who they call when there is a family placement situation then I have no idea how to find them.

Each of my 2 times taking an insurance stay, they found me from my normal zillow vacancy ad.

Good luck, curt

@Chavel Diaz Jr

>>

You have to use your actual phone number from your phone or secondary phone. You get blocked by carriers then expect your personal phones to be shut down.

The anti spam things the networks are doing are pretty difficult to get around I can see why that SMS platform threw in the towel and has you using your real phone number.  

Its confusing all the steps to me. All I can say is that creativereireply.com walked me through setting up a squeeze page off their site with the needed opt out, I did have to register my LLC/EIN and the rented phone numbers with some org/site. My SMS and my replying go through on rented local phone numbers (today).

Re another poster above;   a seller calling me on my rented phone number does show on the platform who it is/was.  It bridges to my phone and all I get on my real phone is the sellers real phhone number so you are flat footed talking.  But on the system it shows which lead called AND it recorded the conversation to replay!!  Handy if you are using VAs to cold call off this system.  It has a power dialer feature if you want to do out bound cold calling as well as the SMS marketing.

And re another poster above re reireply you can add any number of tags, I have a dozen or so on many leads.  But I agree tracking leads through a multi touch situation for me is tough as well.  I just toss on another tag to track where they are at.

Creativereireply scraps local FSBO and expired leads and adds them daily to new outbound SMS for me. Yes you have to pay $75/mo (might be higher) for each area you get creative leads from.

== SMS marketing success: I can share that the rumored motivated sellers stuck in a recent mortgage and not being able to sell and their MLS listings expire then they put their house on FSBO are NOT that motivated. Oddly!!! I see crazy situations on FSBO (via this platforms scrapped leadsd). Vacant new fixed houses on FSBO and the sellers are unwilling to take a seller financed offer. LOL they are willing to hold on and wait. Very odd that folks are still financially strong enough to hold on. It seems we all wait till late spring and their trying to re-list sells / fails and they are more open to creative offers. I'm stuck working these leads daily in the hopes that this is a case of "last man standing" re us investors marketing to these folks that I have to out-last everyone re my SMS and offers to buy.

Just sharing to you that if you are not seeing motivation in your leads;; I'm not eaither and I have the highest quality leads today (IMHO) expireds and FSBOs. You can market to the older idea of absentee or high equity, I just don't see those being motivated. If they don't have mortgage payments killing them why would they dump now, in April? Why not re list and try to sell in spring to early summer? Anyway; I'm very surprised that leads that listed, expired, re put on FSBO aren't that motivated. If I was a cash or financed buyer I could pickup deals at lower offers I suspect but I refuse to go that route. I have enough mortgages I'm 100% focued on creative deals. BTW study up on what type of houses you end up getting creatively; 100% need some amount of fixing and that is all personal cash. So creative is not LOW cash. Its low/no new debt.

Good luck to all, curt

I advocate never selling good property. I agree thats easy for me to say. I rent property and once I have a lease showing the mortgage is covered the difference between rent and debt payments is INCOME. It HELPS your DTI vs hurts it.

Ok you need some cash back. You can rent to own, and the option fee part of the rent before you buy is that amount of cash. Rarely mentioned (very sadly) is the advocation to always rent for 12+ mo prior to allowing a RTO buyer get a new loan so as to turn y9our gain into long term cap gains vs ordinary income. Plus renting before certainly if you offer seller financing is like "dating before marriage" if you plan on offering financing. I have lent to many RTO buyers who fall behind or I have to foreclose. I have about 35% failure rate and this is actually very very good in the RTO seller fiannce exit strategy. I would NOT do seller finance in a judicial state!!!! Maybe a contract for deed, but if judicial I would advertise and screen for bank finance exit only. OR just figure out your cash needs somewhere else and just long term rent.

RTO is more complicated then seems and often mentioned. I reco you get edicated from a RTO/WLO (wholesale lease option) trainer likee Joe McCall. You find these teachers on youtube. I bought them all, all have good docs and training. Joe Crump, John Jackson too.

Call the building/zoning dept of that county.  Give the lot number/plot ID.  That plot of land may be vacant due to zoning.  IE new zoning needs 2x, 3x more land to build thus its orphaned.  Most state/counties guarrantee access to land so the easement is a given but has to be granted through some county action.  IE neighbors (in most areas) can't block access.   The county is where youll learn what is possible and why its still vacant.