All Forum Posts by: Account Closed

The primary difference between ALL of those people you cite and Robert Allen is none of them, except Allen claimed to know the super secrets to making phenomenal wealth and offered to sell that knowledge to others WHILE failing financially. Presumably, Robert Allen failed using the techniques and super secret knowledge he sells to others. :roll:

No red herring.

The Chrysler "voluntary reorganization" shows the pattern and Obama's willingness to push aside any aspect of contract law in his way. As an unsecured lender the UAW was made more than whole while the secured lenders were totally wiped out.

These are indeed some interesting times we are living in. :wink:

Thankfully, absolutely none of that applies if you are using commercial funding or even better, private money.

BTW, there is no "law" governing this. As best I can tell, FHA/VA proposed it and Fannie/Freddie decided to use it too. If you are working with a portfolio lender they are not required to follow these guidelines.

Of course, with the ever increasing fascist control of our financial institutions the current administration is doing, all of that could change tomorrow.

Apparently, the change Obama meant was changing the rules as he and his administration sees fit, contract law be damned.

It's not an overnight process no matter what the gurus say. The key is to network, network, network. You never know who that person standing next to you at your kids baseball or hockey game knows who could help you. Talk to everyone, shy and access to private money are seldom characteristics of the same person.

Yes, private money is readily available but you have to develop your network of lenders. Just about anyone advertising as a "private" lender is the hard money type.

What you want is your own really private source of funds who know you, trust you and will move quickly when you find a great deal.

Unless we are assuming existing financing, 100% of the deals we are doing now, large and small, all use our private money sources for funding.

Originally posted by Hugh Hill:

Nick,

No need to enlighten now. Taz has cracked the code. I expect now since he has the paperwork and closing documents he will be posting some sub3 deals pretty soon. So we call all follow his process.

Dude, you should go back and actually read what I wrote. I don't see anywhere where I said I had any interest in doing this type of deal. We are moving away from SFH and this so called "sub3" deal does not work in the commercial environments.

Originally posted by Jesse R:

Taz no disrespect, but I just don't see how this could work legally. You created a note on the spread between the sellers price and your price. The thing is you assigned your interest in the property so how in the world could you hold a second note and lien on the property.

You aren't being disrespectful, if someone says or explains something and the explanation doesn't make sense to you then you absolutely should seek clarification.

Who holds title and the creation of liens are separate.The contract signed with the ultimate buyer details the fee for the assignment. It further makes the assignment contingent on the creation of the note and security lien from the buyer to the speculator at the time of closing. It becomes a closing contingency the closing agent handles.

In a "normal" closing with conventional financing, the technical sequence is title is passed and then the note and security interest are created on the property to guarantee the note. The title is filed before the mortgage or trust deed securing the financing.

This transaction is no different.

However, to your question about "holding up in court", our research team is trying to find a case where this type of transaction was challenged in court. At this point, I have nothing to say definitively one way or the other. I do have an opinion from a lawyer on the paper work we obtained and their "opinion" is it would probably pass muster.

Well, their exit strategy is not to sell the note to an investor. The strategy is to collect payments and get the ultimate buyer to refinance and cash them out in a few years. They "encourage" this with escalating interest rates and payments and a balloon a few years out. In the paper work we have, the balloon is 5 years out.

Each state has rules covering where deposits can be held and whether you can earn interest on them or not and whether you must pay the tenant interest. So, check and comply with the requirements in your state.

However, in most areas a landlord with one or two properties is exempt from those requirements.

The thing is even if you can co-mingle, I wouldn't do it. Most banks will open an account without a monthly fee. Just tuck it away from all of your other funds and leave it there until the tenant moves out.

Originally posted by nationwidepi:

I don't see how but perhaps our resident due diligence king Taz can think of something.

LEXIS has all published cases and summaries of many non-published cases but not all. On the non-published ones they try to get the ones that advance or substantially reinforce some legal principle or create new case law.

The most frequent ways these veils are pierced are due to fraud, not running it properly (including under capitalization and under insuring) and not filing the annual paper work and paying the annual fees.

Either way, what does it matter, I say. The key is what YOU do and how YOU operate YOUR biz, not how many times others had their corporate veil pierced.

Run your business according to the specs and recommendations Mr. Greg Boots laid out and you should be fine. Also carry adequate insurance and even an umbrella policy for added protection.

That is the only way to do it. Any entity will protect you only if you exercise good judgment in running your business. Fall outside those bounds and your protection is easily stripped away.

You do not have to take title for the note to be created. You can assign the contract and still create the note in second position for the spread.

Example:
I find someone will to sell their home sub2. I execute a contract with them to buy it sub2. I then execute another contract with my buyer and assign my contract with the seller to them. It details my fee for the assignment to be paid in the form of a note secured by a second position lien. Then at closing the following happens. The Deed is executed from my seller to my buyer. Now, my buyer has title. The closing agent also executes a note secured by a second (or lower) position lien from the buyer to me.

You never take title to the property. Title passes directly from the seller to the buyer.

Hugh,

As to the claims about whether the process David markets as "sub3" is completely different or not is kind of silly don't you think? I'll give you a hint, most of this ends up in the public record and what doesn't can be obtained from the principles for a few $.

I have the paperwork in front of me from a "sub3" deal in TX. I have PERSONALLY talked to the seller and the buyer. I have a copy of the contract the speculator signed with the seller to buy sub 2. I have a copy of the contract to assign the deal to the buyer. I have copies of the closing paperwork. There is no real need to talk to the speculator in-between.