All Forum Posts by: Paul Jamgotch

@J Scott Thanks, again, J.

Hi All,

I am negotiated PMF with an experienced rehabber that is from a different state. We would be financing one project at a time. I'm looking for advice on what I should be getting to complete my due diligence. I've asked for references from past PMFs. What else should I be asking for or obtaining? Thank you.

@J Scott

Thanks for the feedback and the points you made. Looking like putting our cash to work in RE is going to be harder than I initially thought.

@Jon Holdman

Thank you, Jon. That all makes sense. I would hope that a sale would take place closer to three months than six, of course. I wouldn't want to take something on for potential less than $5k/3 months. Can I build that minimum into the agreement?

H All,

If I fund the purchase, close, & carry of a property ($40K-80K) is it reasonable to expect 40% of net proceeds? I want to be mostly hands off other than approving the project and am easy to work with. I am assuming the rehabber's time and material costs are coming off the top-line.

Example:

$60K purchase, $4K carry and closings, $20K rehab time and material, $99K sale... I would expect 25% of net, or $6,000. The rehabber would fund material costs and delay moderate fees for labor.

I hope to understand if I am high or low with my 40%. What have others done? Is there a thread someone can't point me to that better lays out what I am hoping to achieve by becoming a PML? I understand the experience of the rehabber will have a lot to do with the percentage split.

Thanks for reading

Dell, who was on title? You, investor, or both? If you, was their an immediate lien from investor put on the home? Thank you.

One shameless bump.

Hi all. I'm hoping that someone can give me some creative ideas to solve an issue which I have created for my wife and I.

In early 2010 we became 'investors' with a family organization in our area who were buying REOs with investor money, renting them out, and promising 10%/year return to investors. I was smart enough (I think I was smart) to structure our three homes as lease-options. We had 25% down financing on two of them and paid $37,500 for each. The company did not perform as promised. One unit got sold when trouble started and we became landlords on our other two SFHs when this company quit performing and we had to take them back. I did not have time to properly manage and we ran into an early, long eviction. I became an eager seller. One sold on LC with great terms for us and it will be totally paid off in 24 more months.

I made a mistake on the remaining property which was in a tough neighborhood and needed 5K in rehab. Having a 5.5%, $25K mortgage, I sold to a young man in Feb. 2012 on a LC for $36K net after $2K Home Depot card kick-back. The note was for $34K @ 7.5% with 5-year balloon. He lives in the home by himself. Everything is going OK and he pays like clock-work. However, based on a 30-year amortization he basically has cheap monthly rent ($385) if he chooses to walk away after five years. We have the risk of mortgage being called early (due-on-sale clause), market selling off, and/or dis-repair. We net only about $70/month for all of this time. In hind-sight, I should have done this on a 10 to 15-year amortization to get him more quickly vested in purchasing after the five-years. I've offered to pay his closing costs to get his own fresh mortgage but he says he is fine with what we have in place. I believe it would appraise for $42K now. Its a no-brainer to me as 4% money is much better than 7.5% and he has interest-rate risk. Given his lack of interest to improve his financing, I am suspicious that this will be a problem for us in 2017 when the balloon is due. Any ideas on how I could convince him to re-finance? I don't think the risks warrant discounting 30% to a contract buyer. However, I am facing a career change at 46 and don't want to pony up $24K cash to pay off mortgage should it get called (it's with a local CU so its possible they find out).

Thoughts and ideas appreciated. I am curious if others have input on what my risk of 'due-on-sale' trigger is? We have that much cash with this CU so they know we could afford to pay it off. Admittedly, I can be quite a worrier. Thanks for reading.

Jon Holdman Thank you for the detailed info. 36% is a tough number to swallow but I'm sure you are correct :)

@Stephanie Dupuis Thanks for sharing your situation. I looked up a pre-licensing class today. I actually took one about 20 years ago for college credit. I'm guessing some things have changed since then.

I'm sure I have the @ thing wrong. Again, I really appreciate all that contributed to and read this thread.

PJ

Thank you for the feedback, everyone. FWIW, I was thinking of something like this: http://www.grar.com/property/mls/12044036 My guess is that it needs tons of updating when each unit recycles??

I'm leaving a job that made >$75K but can live on much less as our only debt is $117K for house.

I've thought about becoming an agent and think that I could do well. We live in an area where the median home price is <$120K (Grand Rapids metro) with no shortage of agents in the area. Is it realistic to net $30k-40K as a first-year agent if I hustle and do what others won't?

Thanks again!