All Forum Posts by: Ellis San Jose

Amy,

You are smart to ask A LOT of questions about the borrower.  Make sure the down payment is high enough to make sure the buyer/operator think's twice maybe 3 times about walking away.  

I'm not an attorney so please consult one in your state to make your decisions.

You could propose they master lease the property as a trial period BEFORE you agree to purchase terms which would transfer title. 

If there is an existing mortgage in your name it should be disclosed that your name will stay on the loan for possibly a very long time.  You could negotiated a limited term where they MUST refinance & pay off the loan.  Just weigh all the possible exit strategies.  A ethical investor who discloses the pro's & con's of subject to transaction could be a win win for both. Just go in with both eyes open.

1) Rehab money can come from 2nd Mtg/heloc if you have enough equity. Private lender or JV partner. How you pay it back is with your income so make sure it's within your means. You can possibly refinance with a new 1st mtg & payoff the existing 1st & 2nd IF you have created enough equity with the rehab.

2) Yes, get a home inspection.

3) Title company & escrow should be able to handle a seller finance. Sub-to not as easy to find. I believe there are Transaction Coordinators Pace's group uses that can provide a recommendation in your area.

Living & investing in Southern California forced me to learn creative strategies in both marketing & acquisition to competitive. I only buy off-market now.

Here are just a few: properties with title issues, court settlement claims, master leasing, lien & mortgage acquisition, seller carry back, options as well as traditional buy & holds, flips.

Your attorney had no suggestions on what to include in disclosures? Get a different attorney.

All are in California. I will meet in person with a potential seller if they show interest. It usually takes multiple interactions to build rapport before meeting in person 

Cash flow in California has to be “created” vs found. Hunting on the mls along with the other millions of buyers will not have deals that jump up and bite you with cash flow. My last few California cash flow deals were off market 1) abandoned hoarder house 2) litigation with heirs 3) relative/tenant not paying rent . 4) relative/tenant not paying rent property in foreclosure . Majority involved creative financing 

My favorite is to implement a direct mail drip combined with phone call and personal visit follow up.

It's rare to find a realtor are skilled with seller financing. However, any realtor can look up those keywords in the MLS to find listings where they are open to seller financing.

I have had better results direct marketing to owners in my target areas & negotiate for seller financing.

My initial instinct is to make sure you understand the occupancy expectations for residential but especially the commercial risk portion when underwriting. What is the current occupancy? Are there any long term leases in place on the commercial? When are they scheduled to expire?

Financing for mixed use is a bit more unique & specialized. I would want a fixed interest rate for as long as possible for risk mitigation on refinancing & predictability of debt expenses.

Mike Robb is my go to expert when it comes to VA transactions.

(858) 472-3930