All Forum Posts by: Tom Gimer
Tom Gimer has started 14 posts and replied 3438 times.
Post: Transactional Funding....does it really exist?
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Quote from @Mario Garcia:
How does one get approved from this type of funding? Do you guys know the requirements?
The "approval" comes in the form of the same title company handling both transactions and assuring the transactional funder that the A-->B transaction will not close until the money for the B-->C transaction is in their escrow.
Any other arrangement will eventually lead to catastrophe, IMO.
Post: Shenandoah Valley VA or Ocean City MD
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Ocean City, MD is a veritable ghost town in the winter. Don't expect anything greater than ZERO occupancy.
Post: Looking for professionals to start DC meetup
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@James Wise We're generous but we're not stupid.
Post: Looking for professionals to start DC meetup
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I have a really good venue lined up in Cleveland Park for a monthly meetup and am looking for a few pros to help build it.
I'm open to suggestions on the right professionals but I'm currently thinking along these lines... a core group would include agents with experience evaluating acquisitions for investors, lenders covering everything from conventional to DSCR to non-qm to private to hard money, and contractors.
The focus of this meetup would be networking. The venue would have drink specials and Eastern Title would sponsor and pick up some of the tab.
If you have any interest or input, please feel free to send me a message.
Post: Why Novation Are Better Than Wholesaling
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Quote from @Peter Walther:
Quote from @Dawson Brewer:
essentially, the sellers are giving you, the investor, permission to list the property on the market through a realtor or flat free brokerage to find an end buyer. The novator is typically in charge of making repairs to the house, covering the seller closing costs, and paying the agent’s commissions.
Quote from @Rob K.:
Quote from @Dawson Brewer:
Here’s why I’ve started using novations over wholesaling.
1. Sellers Get More Money
With wholesaling, sellers often need to take a low cash offer. With novations, I can offer closer to market value by selling to retail buyers, making it easier to get deals accepted.
2. Bigger Assignment Fees
Instead of selling to investors looking for steep discounts, I market to end buyers willing to pay market price. This means I make more per deal than a typical wholesale assignment.
3. No Double Closings or Hard Money
Since the seller stays on title, I don’t have to use hard money or worry about double closing fees. I just facilitate the sale and collect my fee at closing.
4. More Buyers, Less Competition
Wholesaling relies on a limited pool of cash buyers. Novations open up the MLS and conventional financing, bringing in a larger pool of buyers and reducing competition from other wholesalers.
5. Easier to Scale
With less reliance on deep-discount deals and cash buyers, I can scale novations faster than traditional wholesaling.
Final Thoughts
I’m not saying wholesaling is dead, but novations have helped me close deals I would’ve lost before. Anyone else using novations? What’s been your experience?
I'm not understanding the use of the term Novation as used by the poster and why it is different from just an assignment of an existing contract. In legal terms a Novation is generally a new agreement with different terms or different parties that is a substitute for an earlier agreement that is then extinguished with the consent of all parties.
If someone could explain the structure of a novation as used in the OP's original post, it might make this discussion clearer. FYI, I do not watch you tube videos or guru stuff, so maybe I am missing some context here.
If you don't own the property, why wouldn't you need to be a broker or agent to do this?
Every net listing needs a listing.
Post: Why Novation Are Better Than Wholesaling
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It's rare to find an investor who knows how to properly structure a deal involving a novation.
If you do a deal involving the novation of a contract and you don't have all three parties (original buyer, seller, replacement buyer) sign the replacement contract personally your transaction is uninsurable from a title insurance perspective. No, as the buyer you cannot also be the "attorney-in-fact", "agent" or administrator" of the seller. Just stop.
If you have to hide what you're doing it's probably not legal.
Post: What happens when a mechanics lien is filed.
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@Ned Carey Don't believe everything you read. Maryland is a bit different...
https://law.justia.com/codes/maryland/real-property/title-9/...
The vendor needs to file a petition first. Owner can challenge before the lien attaches.
Post: Novation Agreements risks and liability
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Quote from @Ken M.:
Quote from @Cassidy Klundt:
I think I’m hung up on the choice of words here… but appreciate the wisdom— novation is in not in a strength position when you’re not the owner, in the court of law. Got it - and I can align to that. Better make sure the agreements are solid then ;)
Such as when the original purchaser signs the replacement contact as the seller’s attorney in fact and doesn’t disclose that to the principal?
Gee what could go wrong?
Post: Baltimore property valuations overinflated?
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Here is a story from yesterday with some more detail:
https://nationalmortgageprofessional.com/news/fraud-alert-so...
Post: I bought a property at auction from a junior position lien foreclosing
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You are going to need to prove to the first lien holder that you are a successor in interest... auction terms, contract, corporate docs, etc.
This is true whether you go through a title company or not. The typical “authorization to release information” to the title company is not going to cut it.