All Forum Posts by: Ellis San Jose

Notes, convertible notes, shared appreciation notes, options I like.

Just think twice about actually owning property

The title wouldn't be clean to flip to most buyers or get traditional financing until that is handled.

If you don't mind holding it, consider Adverse Possession or Master Leasing.

Recording an option or deed for partial interest is a good idea. However, the estate will probably have to go through probate to get insurable title.

Booting the 3rd person out would require a partition action.

Tie up what you can for as little out of pocket. It's not like the heirs have a lot of choices without clear title.

You are looking for a blanket loan. Not easy, talk to a variety of bankers in your area and tell them you are looking at moving your entire banking relationship. Try smaller banks first then approach larger banks & ask to speak with a private banker. Relationships are everything in this type of situation because this isn't typically an off the shelf product.

It may take a while, you will need full-docs & strong financials to get it done.

is it vacant or occupied?

The 1st doesn't get extinguished in a trustee sale on a jr. lien. To clear title it needs to be either reconveyed or as James stated, find a title company that is willing to insure around it.

I had to pay for a bond for a lost note once because we couldn't find the lender to record a reconveyance on an old loan.

You are getting some great guidance in this post.

IRR is a good calculation to run. But be careful about projecting appreciation too optimistically on resale. It can cloud your decision making.

Put more weight on current cash flow not resale

50% expense ratio is good rule of thumb

Don't forget depreciation on your after tax income.

If I can achieve 12%-15% note investment without the joys & pleasures of property management, plus the associated risk of owning property, I usually opt for notes.

If owning a property has a superior return then I considered going that route.

I have a tough time using mutual fund returns as a comparison because they can be incredibly variable & I have no influence over the value or income. Plus, stock market crashes are no fun.

1099-int if they are a lender

I'm not crazy about a General Partnership structure.

What is the current financing on the property, can you do a sub-2, master lease or seller finance?