All Forum Posts by: Ellis San Jose

If you don't ask the answer is automatically "No".

Partnerships happen when :

1) You have the amount of money and/or expertise that an operator needs at the right time.

2) The terms are superior to the operators alternative sources of capital.

It's all about the collateral

Whether it is performing or not doesn't really matter to me initially.

If you are looking to buy a note secured by a first Trust Deed on a property.

Look at the as is net liquidation value of the property first minus any superior liens (property taxes etc.) and liquidation costs etc.

I buy underwater mortgages all the time but at the appropriate discount.

Lots of possibilities as far as structure.

Think about wrapping the existing 1st TD with an AITD. You could also pair the note with an option to purchase at an agreed upon price & terms that discounts your cash or have a Shared Appreciation Note to capture the upside. This takes care of any possible issues with the current financing.

Yes, I have done a few JV's over years with Multifamily projects & have experienced the good, the bad & the ugly.

Is this a prudent way to do your first MF? It will depend on how well you can operate the building to profitability. Apartments & apartment management is a whole different game an it looks like you are jumping into the deepwater with 70 doors as your first one.

Bear traps: A few things come to mind:

1) Control-Who will have final decision making power.

2) Ownership (title)-Keep it clean. One party has title, avoid mixing up title with a TIC, LLC or Corp Structure with "shared" ownership or decision making power. They are messier to unwind.

3) Operations (transparency)-If the owner is still going to be involved in the day to day, keeping an eye on operations & determining profitability & perhaps differing goals. ex. Raising Current Cash Flow to maximize current split by deferring maintenance but harming the long term value of the building.

4) Multiple Exit Strategy- If you can't buy your JV partner out in 3 years, what's your plan B & C.

5) Buy Sell agreements- If something happens to either of you (illness, incapacity, divorce, death) make sure there are provisions to buy out each others interest ahead of time.

Look for tough to finance properties & acquire with Seller Financing.

It technically isn't cash but "earned" equity that affects the balance sheet (net worth) not the income statement.

You may want to get some education using title holding trusts & using them in conjunction with your LLC's

I have been investing in paper since 2001 & would like to connect with other experienced investors. If you would like to put together a mastermind group that meets in person on an ongoing basis, I have a great location in Southern California.

Ellis San Jose

I would be interested. I specialize in buying non-performing notes. I am a full-time investor. Started investing in 1989 & bought my first note in 2001.

I look forward to hearing from you.

Ellis San Jose
[REMOVED]

I received a call from a seller in St Pete that needs to sell their mobile home before June 1st. I don't buy in that area so I wanted to pass the lead on to any Lonnie Deal investors.

They owe 4k on a db; wide in above avg condition. Lot rent is $450