All Forum Posts by: Travis Sperr

Assuming you are referring to the gentlemen in Detroit that bought all the properties from the tax lien sale. He was able to purchase them because he had the money to do so, I didn't gather there was any type of partnership. The city needed the tax revenue to operate and he bought the liens thus acquiring the property. In most states it is not likely to actually get the property when you buy a tax lien.

Financing an acquisition like that would be very challenging if even possible, the collateral is essential unknown unless you have the time to look at and analyze every deal. Any area where you have the ability to buy a "package" of houses is a place you probably do not want to own properties unless you know it very well. The gentlemen in Detroit paid cash.

There are guru's out there that teach this strategy, your CPA if hip to real estate investing should be able to help. Nonetheless if you can't sleep at night, here is the IRS version:

http://www.irs.gov/publications/p527/ch02.html

more specifically the "MACRS Depreciation" section.

I agree with Chris, I too have done the same. A few days wont hurt anything and will likely make moving a little less stressful for the tenant. You have all of the money you need to collect until the first payment is due in October.

Curious what your goal is? If you simply want to visit to go skiing, your money is better spent buying a rental property or three in your own backyard and use the cashflow to visit the mountains. I am seeing some deals in the Avon and Eagle area, they look to make more sense for longer term leases 12 months or so, rather than vacation rentals. If you are serious about it send me a message and I will connect you with a real estate broker that is in the area working with investors.

You may not need a local bank to get the loans done. You need a mortgage lender that underwrites directly to Fannie/Freddie with no bank overlays. The 4 property limit is an overlay, Fannie/Freddie guidelines allow you to go to 10 properties. Conventional loans so all qualifying still applies. I am financing well past 4 properties on 30 yr notes in the 4%'s. Good Luck.

Hi Michael,

This is a transaction you should be able to get completed. Depending on your current connections in the mortgage world it may take a few calls to find a broker that understand what you are doing. All of the same investor guidelines are going to apply, 25% equity, fico, DTI etc (assuming a conventional refi).

Travis

Jason,

Your lender should be able to help you with this. I know there are a few lenders out there that are still able to close loans in land trusts, although you are going to have to find the broker that is familiar with the transaction.

To be honest I would be very surprised if any brokered loan, i.e. not a local bank is going to get that loan done on a primary residence. Just Curious, what difference does it make if your name is associated with your personal residence? Especially if it is financed with little equity?

Travis

If it is a strong deal you shouldn’t have any issues finding a buyer. As a hard money lender we receive calls from wholesalers fairly often. If I were you, I would get in touch with a hard money lender and tell them about your deal. There is often a focus on building your “list” as a wholesaler, we have a long list of prequaled clients that has allowed us to get a deal sold in just a couple phone calls. The lender will be happy to make a loan and you can get paid.

I have seen banks counter with a faster closing date, I have heard from REO agents that the bank wants to get deals closed by the end of the month to eliminate additional costs, etc. I think that it just comes down to the bank wanting to know how serious of a buyer you are and not wanting to lose any marketing time.

Good Luck.

Paying cash is a mistake, unless you have more money than you know what to do with or do not have the ability to finance. Keep your reserves for future deals, increase cash on cash return by using leverage. Why pay cash for a property when investor interest rates are in the low to mid 5's (%).

Buy right and you will succeed.

Hi Brian,
I am a hard money lender in CO, it can be very different in TX.
I agree with all of your positives- of course. But would like to comment on some of the potential negatives

6)- Points and fees can be seen as an opportunity cost. Of course we all ideally invest in real estate with no money out of pocket, but better to pay to do a great deal than not do a deal at all. The larger margins are important for the lender to protect their investment, as wells as yours. If you plan to refinance, the rate and term is going to require some equity, in our market it 75% LTV, we lend 70%

7-8)You can work with a mortgage broker to see what you will be qualified for on the refi, look for lenders with no title seasoning. Without title seasoning you can use HM to acquire and repair, then refi to long term money 30 days after your work is complete. Wash, Rinse, Repeat and keep acquiring rental properties without putting 25% down.

9) Work with a lender that wants you to be successful. I look at every clients deal to ensure they will be profitable, there are always unknowns but another set of eyes on a deal doesn't hurt.

10) In our business as long as the repairs make sense and the dollars allocated are appropriate, I have no problem with the investor doing their own work.

Most HML's do not report to credit on the loan, too short of a term and too much work to report. Although in the event of a default it is a full foreclosure and it will affect credit.

The secret is, in 99% of loans the lender doesn't want the property and will probably work with you to extend. If you are priced right and understand the business there is no reason a loan should go to term.