All Forum Posts by: Jared K.

Wonderful you have these multiple resources. Pick one type of real estate you want to do, pic that mentors brain to pieces and run with it. Be sure to stay in touch with the other ones b/c you might need em.

All I can say is it will be costly if they are financed b/c you have to refinance each property to put them into your LLC, according to my bank. I started an LLC after I owned my properties but decided not to refi so I ended up closing the LLC which wasnt fun or cheap. I would ask your tax consultant before you do this if it will benefit you on taxes to make the switch and consider the refi costs. I would also ask your lender how it will affect you getting loans in the name of your LLC moving forward since it is a new entity with no payment history or credit rating, I believe it will but I could be wrong. There are many good threads about this topic on BP as well.

Good luck. 

Most title companies wont touch wholesale deals unless it is purchased cash. Even then some will not because they are taught that wholesaling is illegal, which its not unless your involving financing, then it is. Title companies will most likely require all buyers to bring their own funds to the table, thus transactional funding was born..lol. 

I do wholesales without using transactional funding b/c my buyers funds will close the deal for both parties. Some title companies still have an issue with that but you can get around it. There are a few ways around this if you do some research here on BP you will find em all. 

I have never used an assignment of contract and had a deal go through so I don't use them. A standard real estate purchase and sales contract is all that's used to do the deal, not aware of any wholesale contract exactly. I sign one contract when I buy with the seller and a different contract with the person buying from me....that's it. I take them both to a title company and let them sort out the money details when my buyer gives them the $$ or my buyer pays me directly and I pay off my purchase then have the title company deed the property to my buyer. You can also use separate title companies if need be.

I would look for an investor friendly title company that's use to doing these types of deals also. The one you called probably just pushed you to the curb b/c you ask a newbie question (no harm intended) or dont know what a wholesale deal is so just find another one and start over once you have a deal. 

You can download free real estate purchase and sales agreements from many different sites. For me, the shorter and simpler the better for all parties.

Hope this helps.

Good advice in previous comments.

I would suggest wholesaling to help pay down your debt and to pay someone to fix your credit so you can start doing other types of deals sooner. Wholesaling is easier than most other ways, in my opinion, and it helps people learn the ropes for other types of deals later down the road. 

Just my opinion.

Well, I would dismiss the appraisal all together b/c a lot has changed since then so do your own research on the market b/c I am sure the appraisals would be less, especially with a little more deferred maintenance for the last eight years. Calculate the cost of repairs individually by looking at each of them and get a total that way, or just the ones you want to buy. The market might say differently but I doubt full rehabs are in the equation for these #'s to profit unless you buy/hold but even at that you don't want to overpay. 

See if he will sell you 1 or 2 of them? If he is really a seller he will consider discussing it. It sounds like he is flexible b/c he is offering with terms but it could be a warning sign also that the price is too high, never know? 

Run your market/rehab #'s for each property separately to see if its a deal or not, then calculate rental cap rate. this will let you know where you actually stand on the package and you can use these #'s to find a partner or investor/buyer that may want to buy a few of the properties from you or just buy a few from him and help him sell the rest. Ask him to discount each property you buy $xxxx for every one you help him sell that you dont buy.

Just a thought. Best of luck.

@Jon Holdman  has probably given the best answer for your current situation. This is typically how the process is handled and I agree.

@Chris S. When I started investing several years ago I bought a duplex next to a property I had just purchased, a triplex. I wanted the property so I could add to my portfolio and it was adjoining property to my recent triplex purchase. I wanted to clean it up (to make my property look better and rent faster) and the current owner of the duplex rented to anyone he could. Upon discussing purchasing the property from him I stated I would rather buy the property vacant so I could rehab it and get my own renters. He was glad to oblige if I purchased the property and so he did. I told him I would purchase it only if vacant and if he handled the process with his tenants at his cost. If I recall we didnt put this in writing. I did include in my contract that the property had to be in the same condition the day of closing as the day I made my offer, just for good measures in case they destroyed the place. I am not sure what he told his tenants but he sold me an empty duplex. He might have even rented them another property or offered cash for keys, not sure? 

I wasn't aware of any laws at the time of my purchase that would have made this illegal in any way. I had read that sometimes buildings are purchased this was for rehab projects.

It is probably best that you do take the existing tenants as Jon suggested and have them sign your lease and move forward from there. If the tenants work out good for you then its a bonus. If they do not you can upgrade your units between tenants. I would be sure to get a copy of the rental history payment books from the seller and/or any other documentation such as bank deposit records to prove the income etc.

Good luck :)

@Charlie Hampton I am sure glad you resolved the issue, definitely an interesting story, but I hate that for anyone. Just goes to show powerful knowledge in the wrong hands is as dangerous as a loaded gun. Rock on! Loved the Guru line..  :)

Best of luck moving forward

I would just go talk to the smoking tenant again and say..look, I know your smoking pot in here, how I know for a fact is none of your business and what you do elsewhere, off my property, I don't care but I have a business to run so here is how its gonna be ....when I do hear you have smoked pot on my property again there will be severe consequences. Tell them you have already been called by law enforcement for questioning about his drug use or possibly being a dealer. Tell him it would be in his best interest not to do it again and you dont want to make him move. This is considered a disturbance to other tenants and you will be forced to evict if it continues.

No arguing, no discussion, no explanation or denial of the fact needed. Hang up or walk away, they will get the point or move.

I hope this thread is of use to some of you.

@Zamir Kazi Oh, then that is a different story. In some cities such as Detroit people do buy blocks so that is what I thought you were referring to. I believe the more units in one location the better.