All Forum Posts by: Andy J.

Advertise Rent to Own. Even if you don't want to give that option to someone it stirs up a lot more potential buyers. When I do a Rent to Own advertisement probably 30% of the people who call don't think they can qualify for a loan, but I see they actually can once I run their applications!

The listing agenst in Colorado have informed me it is non-refundable (at least for investors, owner occ has different rules), I haven't looked into this in a while so perhaps it has changed. Below is from HUD's broker's handbook.

Disposition of Earnest Money Deposits

The failure by a purchaser to close on the sale of property within the allowable
time period, including any granted extensions, will result in the forfeiture of the
entire earnest money deposit, except where the purchaser presents
documentation to HUD that one of the special circumstances described in
paragraph (B) below this section has occurred.

A. Investor Purchasers:
1. The failure by an investor to close on an uninsured (not involving FHA)
sale will result in forfeiture of the entire earnest money deposit.
2. Fifty percent of the earnest money deposit on an FHA-insured sale will be
returned to an Investor Purchaser where HUD (or a Direct Endorsement
Lender using HUD guidelines) determines that the Purchaser is not an
acceptable borrower.

B. Owner Occupant Purchasers:
1. The entire earnest money deposit will be returned to an Owner-Occupant
Purchaser who fails to close after the sales contract was signed due to:
• There has been a death in the immediate family (contract holder,
spouse, or children living in the same household).
• There has been a recent serious illness in the immediate family that
has resulted in significant medical expenses or substantial loss of
income, thus adversely affecting the purchaser’s financial ability to
close the sale.
• There has been a loss of employment by one of the primary
breadwinners, or substantial loss of income through no fault of the
purchaser.
• In the case of an FHA-insured sale HUD (or a direct endorsement
lender using HUD guidelines) determines that the purchaser is not an
acceptable borrower.
• For other good cause, to be determined by MCB.
2. In the case of an uninsured (not involving FHA) loan where, despite good
faith efforts by the purchaser, there is an inability to obtain a mortgage
loan from a recognized mortgage lender, 50 percent of the earnest money
deposit will be returned.
3. On either type of sale, forfeit 100 percent of the deposit on those
instances where no documentation is submitted, where the documentation
fails to provide an acceptable cause for the purchaser’s failure to close, or
where the documentation is not provided within a reasonable time frame
following contract cancellation. (e.g., 90 days).

Usually my next best option after a sub-2 is a lease option. Sub-2 is best for the motivated sellers, you may be just dealing with un-motivated prospects.

However, they may not be happy about handing over title NOT because of the transaction, but because of your approach. It can be a difficult pill to swallow for a potential seller, it is absolutely imperative that you focus on their needs and make them feel comfortable with YOU first.

I typically make them multiple offers when I want a Sub-2. Make them a cash offer, let's say for example 70% ARV-repairs, and then make them a Sub-2 offer, let's say 85% ARV - repairs. Now you're giving them options, and which option do they want?.......usually the one with the larger price (Sub-2).

Here in Colorado that interest on your purchase price is the DEFAULT loan rate, meaning it could be upwards of 20% interest if they redeem. Not sure if that's the same in MN but worth checking into.

Was that from a pre-foreclosure list? Here in Colorado Springs that will get you 15+ mailers

Try to keep your revolving credit balance under 35% of the available balance. If you don't want to pay for a credit repair program (some are costly and still make late payments), I would reccommend meeting with a mortgage broker who works with less than ideal home buyers. They'll be a good source information since they have an interest in seeing results (so they can provide a loan and get a commission).

The problem with HUD homes is that your earnest money is non-refundable, even if it doesn't pass your inspection.

I have a property with a Wells Fargo mortgage. Their website allows me to schedule automatic payments from either an account they hold or another financial institution. If I recall there was a one time setup fee of $10, free thereafter. I realize this is only a partial solution, but something as important as a mortgage may be better left to the ones actually holding the note.

Another vote for the UPS box, it's what I use. Put your website on the postcard too if it's appropriate.

I will say one thing about having the suite # with the UPS store vs. PO box:

I had one person actually show up to the UPS store once thinking that was my office address, coincidentally I was arriving at the same time to pick up the mail. He seemed very confused and it took a few minutes to explain what was going on. His english was poor so the language barrier made things difficult. I'm just glad that I was there, I'm sure the folks working at the UPS store would have enjoyed that conversation.

Check your local city ordinances to determine when/where you are legally allowed to put them out (if at all). Some areas are very strict on this and will prosecute, others don't seem to care. I always put them out friday early afternoon but I find most calls come mid-week. Response can be erratic, some weeks nothing, other weeks 15 calls, keep this in mind if the first time doesn't perform like you expected.