All Forum Posts by: Paul Jamgotch

I like the words "only" and "just" in both of Joe's posts.

@Patrick T. No doubt you have a lot to offer. Definitely negotiate the best deal for you of course. If a lender will finance 100% and take a HML-type deal than that is fantastic for you (3-5 pts and 10-12%) and good for the lender if everything goes as planned.

On a 50/50 split I do think you should keep any commissions you can on the purchase. When you sell, I guess it is debatable...perhaps you consider 3% to buyers agent (no selling commission) and keep your cut of that if you happen to be the buyer's agent on that transaction. Not all transactions are commissionable so I did not make that assumption in my initial response.

Make no mistake about it, there IS risk to the lender . I spoke to a PML this past week who got his money tied up for three years in a lawsuit. The contractor he funded got into a beef with someone else who, in turn, decided to sue everyone connected to that contractor... this is not a risk-free venture.

Also, if you want to talk about time spent on the project you should also consider the time it took for that PML to make & save the money available to lend. Most have made tremendous sacrifices in life-style and time to acquire those assets.

Good luck however you and partners decide to move ahead.

I believe I read somewhere that a "lessee" cannot be made responsible via lease to pay for repairs in some states. I realize that the buyer is fine agreeing to this now; however, watch out that you do not put yourself in a position to be sued by the buyer (claiming that you were taking advantage of him). What if he gets injured working on YOUR house? Will your LL insurance cover that? Also, make sure that you can legally finance the sale after two years (Dodd-Frank and all). Hopefully someone more experienced than me will come along and give a more concrete response.

I would definitely sit down with an attorney who is familiar with Safe Act and private lending. That money might save you tens of thousands.

What is the place worth as it sits? How much do you owe? How much would it cost to pay someone to rehab to his liking? Perhaps you can HIRE him to do the rehab and SELL to him for more? Good luck.

@Patrick T.

I'm trying to get on the other end of this type of deal. It sounds like you bring a lot to the table but aren't bringing any cash to the deal (100% of risk on the person that is "only the cash partner"). For the first deal I would consider funding purchase, close, carry, and rehab costs (subs and materials) to split net profits 50/50 with a GC if I had a 1st lien on property; however, I would not pay you for personal bills or your labor if that's what you meant.

I would only consider as propose if you were planning on keeping the place for over six years. Just eye-balling it I think your break-even is six years ($500 +/- per year less the small tax write off loss). Outside of that, keep the cash.

For those that due PM lending, could you please share length of note if you are splitting net profit instead of rate and/or points? I have a six-month balloon on current loan but realize this might not be adequate for some rehabbers should the home not sell for various reasons. Thanks in advance.

I chuckled when I saw your comment about not being able to tell 55+ people anything. I've run across young people in this business who have nothing but a car lease and live with their mother who revel in the opportunity to tell me 'how it is'. I guess it takes all sorts, lol.

@Charles McPherson can you share time on market for those homes where they have stuck to 80%? Thank you.

@Account Closed

I'm sorry to hear about your father and GB him for thinking of you with this home.

1. Find out for sure that the property is upside-down (mortgage company for pay-off and realtor for CMA). The value may surprise you.

2. Since your dad used an attorney I would seek his/her advice on how to hand the keys over to your father's lender without ever taking ownership yourself.

The last thing you want is a short-sale on YOUR credit report.

To clear up previous post, you CAN benefit from sale of the home if there are proceeds left after closing costs and mortgage payoff; Robert was saying you CANNOT benefit if its a SHORT sale (selling for less than what is owed).

I am the trustee on my deceased mom's estate and working through the sale of her home; however, there is enough equity in the property to make it worth my while. Otherwise, Bank of America would own yet another home :)

Go see father's attorney this coming week. There may be paperwork that he can get your father to sign to make this easier. Of course, your dad does not have to know that you may not be accepting this gift. Best of luck to you and your family.

Not professional advice.

@Jeff S. IRA Services looks great for SDIRA. Can you help me understand why they require an IRA LLC for checkbook control? Thank you.