All Forum Posts by: Rich Weese

I was just curious. I will be in the Dallas area for a couple of days beginning April 10 and I always look for someone to go to lunch or dinner with!

@Mike Taravella

I think your question is a good one about needing to own the house free and clear. I would think you could still do it as an all-inclusive note and trust Deed or as a subject to or create a second mortgage to go behind the current financing. I think any of those should be okay but I am not giving legal or accounting advice.

I don't see any reason you would need to have a separate LLC and anyone is okay with carrying a note. It happens all the time and every day.

Good luck

@Account Closed

Thank you Jack. Where is Friendswood Texas?

I'm going to be meeting with my management people in Dallas area for a couple days. I was wondering if there are any meet ups or investor get-togethers going on at that time?

I have used seller financing from both a buyers position and a seller's position! I started in real estate without very much in the way of money but I had a lot of time and was gaining knowledge quickly. I would look for a seller that  owned the property free and clear. He might not even be advertising it as seller finance. I would meet with him and ask what he planned on using the money for? If the answer is that he was just putting it in the bank, I would explain how he could be secured by making the loan to me and collect higher interest on his money.

I would also offer him one other tidbit that worked in numerous situations. An astute seller might not want to carry a note for a long period of time in fear of an emergency that might come up. I would offer him multiple notes secured by one trust  deed on the property. It might have been an aggregate of $100,000 with five $20,000 notes all with different balloon dates. If he got in trouble or had an emergency, he would likely be able to sell one note at a smaller discount then he would be facing if he sold the entire $100,000 note.

Recently, I've been in the sellers shoes. I have been selling off free and clear single-family residences and carrying the financing. I don't have needs for the cash so I know it works fine for me. A buyer normally is willing to pay a higher interest rate since they may be looking for owner financing due to difficulty qualifying with a institutional lender.I have obtained a much higher interest rate than what I would receive in any bank.

I have also used the same process with a buyer by giving him multiple notes with each secured by its own mortgage.

I mentioned in a thread a week ago that I had done this numerous times. I would buy a lot, build a new home on a construction loan and then refinance it on a permanent loan when house was complete. I would even obtain a COFI arm permanent loan where the payments were based on an interest rate lower than what the market rates were. The excess funds I received over the cost of construction were used to make the payments on the house for two years. I would then sell the home and do the same thing again. I lived in each home 2+ years. I never had any of my own funds tied up in the house.

You should make sure to ask an accountant if that rule changed with the recent tax changes in the United States. Someone pointed out in my thread that it was a longer period of time now but I have not verified that since I am no longer using that method.

Rachel,

I started at a very young age also, decades ago. As you can see by the number of posts I have, it is quite easy to do research and find some of the posts and threads that I have already entered on BP. I would suggest you find several members of BP that you have enjoyed reading their biographies or their threads and continue to research posts by those individuals. I know I have given loads of advice and was even selected to speak at the bigger pocket seminar in Denver hundred years ago! There are many sources on bigger pockets where you can find free information and also members posting results they have had using different methods. I think all of the answers above were also good. You certainly can follow someone without that person even knowing they are your mentor!

Good luck.

Michael,

Many on bigger pockets will not like my answer but it has not changed in the seven or eight years I have been a member. I have owned over 1000 single-family residences including condos. Of those, four were located in a planned unit development or condominium project. You may find other answers from me already in some of my threads that I don't think any condominium is a good investment. Many of the reasons have been listed above but the one that scares me is you will NEVER own it free and clear. Even if you have no mortgage and pay cash, you are always holding a keg of dynamite that will eventually blow up. Roofs, pool, asphalt, etc. these are what are known as special assessments and you never know when they are coming or how large they will be. I have seen some real doozies and your cash flow will not cover those. Just one guys opinion.

In my history, I have found that many investors don't know what they want or need. It takes a little bit of time and effort to try and help educate them as to which strategy to use that will allow them to reach the goals they actually have. Many times they have grandiose goals and don't know how to get to the first step. You need to be the great educator to be successful, in my opinion.

Samuel,

I'm on the board currently so I'll take a stab at answering your question. As someone who has the money, I find people that would like to be my partner every day all day long! The ones that are looking for the JV or money need to convince me that my money is in safe hands. I remember when I was very young and I looked at real estate and every project looked like a winner. Unfortunately, they were not all winners. I had to go out and do many of these deals on my own or with relatives or people that knew and trusted me first. When I built up that type of relationship, partners started coming out of the woodwork with money that wanted to be my partner. I started holding seminars to explain the four benefits of owning real estate. I held these in a 30,000 ft.² office building which I named Weese financial Plaza, even though I only had 1500 ft.² It was impressive for people to attend one of my seminars in a building with my name on it and they came with their checkbooks!

I was able to grow very quickly and when I grew tired of real estate at age 29, I had 206 different partners. Some of those were in as many as six different partnerships. I'm trying to explain it gets very easy when you have experience and a track record.

You did not list very much of the benefits this partner would have by partnering with you. Do you have a track record? Have you raised this type of money for a commercial project before? Do you have partners that will give you a good referral for these new people? Do you have the knowledge to handle a property of this size? Can you prove it?

This is probably only one 10th of the questions that an investor would have for you. Good luck. I would suggest you try on something smaller and work up from there. If I have misread you, I sincerely apologize.

Hi Daniel,

I want to make sure you understand I have not done this recently. I would purchase an apartment building as a limited partnership where I was the general partner and signator. If the loan was assumable, I would assume it. If it was not assumable, we would do a subject to or wrap around loan and I would sign.

In some instances, there was already a first mortgage to an institutional lender, and a second mortgage to an additional company or previous seller. Both loans would be assumed or taken subject to.

Example:

I purchased a property in Colorado Springs by the name of the Bella Vista Apartments. It was 202 units. I don't remember the exact price (It was 40 years ago) but let's assume it was $4 million. I remember there was a first mortgage and a second mortgage. I need to make another assumption here as far as loan numbers. $2,500,000 on the first mortgage and $500,000 on the second mortgage for a total of $3 million in financing. The buyers would need to come in with $1 million or 25% down of which I would receive a 6% commission which was approximately $250,000. It was easier for me to raise $750,000 of the down payment and take a third mortgage for the $250,000 commission I was owed. As I stated in my book, I really didn't care whether I got cash or monthly income. It was all spendable! Times and rules constantly change in real estate and I only explained in my book what I did, not what is possible and legal today. I would be more than happy to answer other questions if you have them.