All Forum Posts by: Tamara Deering

@Mitchell Litam

If it really is just a couple of pieces you can fill and sand with either bondo or plastic wood.  Also, it is not that difficult to splice in a piece of wood, you can cut out the offending piece with an oribital saw and splice in a new section.  The tricky bit with siding is that it is installed from the bottom up and needs to be removed from the top down so if the damaged section is in the middle or worse the bottom you will have to remove a lot of laps to get to the piece that needs replacing for a true fix, not a repair.  If you can pull off one of the two fixes I mentioned above I would probably do that, installing new siding for a rental probably won't pay off.  

@Saul Lopez

I'm not sure what you are asking.  Usually the contracts with the buyers are the typical real estate sales contract in your area.  The contract with the person who buys the contract for you is usually handled with an addendum to the purchase contract for assigning the contract to a new purchaser.

@Ashley Cast

What has happened with the offers you put in?  Were they below asking price or were you too late?  What's going on with your realtors?  Are you very specific in what you are looking for or did you just tell them to find you a deal?  What is their experience working with investors?  If you can fill in a few details I might be able to give you suggestions of areas to tweak.

My understanding of the code is that you are permitted/encouraged to develop the property into something mixed use.  If you do not you are limited to the amount of floor area you can build/use as a duplex on the property.  I would recommend talking with an Architect who is familiar with the zoning requirements to help you prepare your permit package.  Typically, if you are not doing anything that triggers a permit your structure is grandfathered and the new zoning regulations don't apply, however going by your description of the property that is unlikely.

With $100,000 in this market I would invest in the lending side of the business.  Buy notes, invest in a syndicate, REITS or possibly a turn-key rental out of state.  You already have a fair bit of capital tied up in rental property so you may want to diversify.  

Personally, I'd want a fairly liquid investment with OK returns because if we experience a correction in the next year or two it will represent a buying opportunity that you won't want to miss.

@Tre Tipton

If you are new to wholesaling buying off the MLS is going to be tricky because there is typically not enough meat on the bone to make money for you and your end buyer. You will need to be able to make aggressive offers that you can back up and if you don't have the cash or an established reputation writing the offer with an and/or assigns line will be a hard sell.

To answer your specific question you can work with hard money lenders, establish yourself and get proof of funds letters from them.  You can also develop relationships with investors with cash who are willing to provide you with proof of funds as well.

Also, a word of caution in some markets if you are not a Realtor or Attorney you are not allowed to sell properties.  Wholesalers must sell an option to purchase or 100% interest in a contract, to protect yourself make sure you are well versed in the rules of your state before you write your first offer.

@Mike Harris

If you want REO properties before they hit the market you need to work directly with the bank. Realtors are assigned REOs once the bank has decided to list the property. If there is an agent in your market that seems to list a lot of REOs then start working with them, once they have been given the property they can sell it to you before listing it on MLS although they may not. The reason they might not is because their client is the bank so their job is to get the highest price possible for the property and the best way to ensure they do that is to list in on the open market.

HUD properties and other government backed foreclosures (VA, USDA, Fannie Mae and Freddie MAC) often have a period when the properties are only offered to owner occupants before they allow investors to make a bid on the property.

@Thomas Slocumb

There are plenty of good ideas that have already been posted.  I agree that you should get a better return than 2.3%, there are plenty of options, REITS, notes, index funds, rental properties, etc. all would work.  What you need to ask yourself is what are your goals?  Are you planning on staying in CA long term or are you thinking about relocating? How quickly are you going to need the money?  If you are planning on staying in CA, and you've owned your current home longer than a year, you can look into purchasing a second house with owner occupant financing and hack that one as well while earning more income from the house you currently own.  You are in an enviable position with lots of paths to get where you want to go.  Look at your options and pick the one that works the best for you.

@John Bell

A commercial loan is just how we differentiate ourselves from owner-occupant loans which require a different license to underwrite. Any property you don't live in is a commercial loan for our purposes. For a first time investor we offer loans at 70% of value, both as is and ARV. Let me give you a scenario. You find a property that is being offered for $150,000, it's current market value (As Is value) is $165,000 and it needs $25,000 in repairs. The ARV is $240,000. This is how that deal would pencil out:

We would offer a maximum loan of $168,000 however, we only offer 70% of value so we would offer you $115,500 of the purchase price and we would put your $25,000 of repair costs in a construction escrow account that you could draw on as you complete the repairs. Your loan amount would be $140,500, you would need to bring your origination fee of $4,917.50, our fees of $750, and $34,500 down payment to the table (the difference between the purchase price and our max LTV loan of 70%) plus title insurance and title fees, this equates to approximately $45,000. You would take the $45,000 from you self-directed IRA then refinance and use the money you pull out to either replenish your Self-Directed IRA or redirect the proceeds to another investment depending on the rules of your IRA. Leveraging the loan allows you more flexibility than paying cash up front but it is more expensive.

@Kyriek Daniels

I agree with @Barry Pekin, except that some buyers calculate the 70% rule as (ARV - Repairs) x 70% which would be $291,200 less your 20K leaves $271,200 which is about $38,000 for Grandma. If that will get her where she needs to go then yes it's a good deal. You can start your marketing at $326,150 and see if you get any bites, but the goal is to get this out and sold before Grandma loses more money to fees in the foreclosure process. Make sure you ask for a deposit, preferably one large enough to clear up some of the arrears and buy some time if the first buyer under contract doesn't perform.

Good Luck