All Forum Posts by: William Howley

What do you think would be a market value to find someone to step in as a note holder for the buyer, like 50% down 11% apy? 5 year, 10 year AM?

It has city Electric, but not water. within the lending world is that considered still no utilities? 
I know there are plenty of hard money lenders out there, but arent there people out there that want to sit on a 5 year note at like 10% APY? thats a decent return for just holding paper no? 

 When you say "Keep in mind investors can get back rock solid firsts on improved properties etc" what did you mean by that? 

We are constructing pole barns in Bend Oregon, they sell for $320,000 with the land. Traditional banks do not lend on these properties to buyers because there is no water and they are not for living in. So our buyers are only able to pay 100% with little financing options. Me and my business partner thought it would be nice if there was someone out there that could offer a financing solution to our buyers. So for example we would tell our potential buyers, we have a private lender who can offer 30% down, 9% APY, 5 year loan, 10 year amortization. And then if the buyer like thats financing we just connect the two of you. The note would be between you and the buyer, we just want to find financing options for them so we are able to sell the pole barns easier / faster. Let me know if you have any ideas or contacts of someone who might be interested in that setup. 

@David Sabine Hi, little late for a reply, I think I am understanding your question more so than how these others are replying. Its not about how the banks are bidding that much, it is WHY?

We really dont know the answer, but basically the banks by bidding up to what they can, they know they are going to outbid the investors. They are basically saying they want to hold onto the property. They may have done a calculation that shows that it would be worth it for them to hold onto the asset, growing economy, or cash amount is too low. Or they think they can get more by posting it some where else. I have been tracking auctions for some time now, and recently I haveseen a lot of banks bid the most they can, taking back the property, then to see the exact same property on a different list source like Hubzu.com, Auctions.com, or even the traditional MLS as an REO. The bank is mandated to offer the property at foreclosure auction, but they are not required to sell it! if they they think they can get more money on the MLS they will hold onto it and sell it in another means.

Hi everyone, I guess I am a little late to the conversation, being as it is 11 years ago haha. Maybe someone will read this looking for foreclosure advice.

@Frank Dai gave some general good advice, but there are some things to note. Just going off of a flat % reduction from ARV doesnt make any sense because the property could have totally different rehab costs. One property could be 10k, another 110k. So its really important to get ARV, and then make some gross assumptions of the property. You will get better with that over time. Some things I ran into, is I noticed their is generally a some correlation between the age of the house and the expected rehab.

- You want to ally yourself with a title person who is willing to do title searches on any property your actually going to bid on. You could lose your shirt and bid on a second mortgage. lose everything. I even bid on a property in which the lien was worthless, the auction should have never even happened. The county does'nt care. They will take your money. You need to be careful. 

- drive by the property, add in 4,000~ costs if someone lives there. 2 months of no rent attempting to get them out, and a possible eviction. 

- HAVE or get MLS access. Become an agent if you have too to get it. MLS access will give you accurate comp analysis, also, you want to see what others are paying for properties as CASH, and you can only do that with MLS access. Your goal is to buy at auction and sell $10,000 below what other properties are going for for CASH, this way you know you can sell for cash, and make a quick profit no rehab.

- Get a crew of good rehabbers / maintenance people together, someone who is good at like everything. instead of buying new AC units, I have found that generally you can clean the coils and repair a piece that is broken. No ac guy will do that for you because all they want to do is replace the entire thing. It is easier for them. Find someone who is honest who is good at AC, plumbing, some electricial, etc. They exist but are hard to find. 

- Learn a lot about the foreclosure process in your area. Call the county directly! I messed up one time, and walked away from the property, losing 5%, because I was a afraid of a pending bankrupty claim by the owner. The title person I was working with at the time told me to walk away or I could lose everything, and she was wrong. If the judge (Florida), decided the brankruptcy was going to take place I would have gotten my money back, so I risked nothing. This lack of knowledge of the process cost me $7,000. 

Anyways hoped this helped, I built a platform specifically for people doing foreclosure auctions in Florida. you can check it out here, Auctiontumbler.com 

I don't understand why half of the people responding like this, why are people shutting down this concept. Let's really think about this for a second. As a non profit, you just cant show a profit at the end of the year. But you can pay yourself a salary as an employee. I mean what is really the difference? If I am paying myself $2,000 a month as my salary out of this non profit I created, that is perfectly legal. you are paying an employee. Lets say you are super successful and you have money left over at the end of the year. That money can just sit in a checking account, and it can be passed forward to buy additional rentals in the future. There are tons of government programs out there that want to work with these types of "companies". What about post foster care when the kids get to big, or they are in there teens, half way houses, post military housing, Section 8, not to mention all the free money you can get, Grants, NO taxes, HUD homes.

My business partner and I just ran into an incredible deal on a 4 plex, $80,000 below market value. It was a foreclosure, eventually owned by Bank of America, in which they required 20 days for owner occupied and non profits to bid on it first. I don't know why but that was their requirement. Needless to say a non profit scooped that bad boy up. I wasn't even allowed to buy it as an investor. Had I had a non profit, I could have gotten it and rented it, growing that non profit, acquiring more assets. 

@Shawn Dulan I think its a wonderful idea, but my advice to you would be to open both, a non profit and a regular LLC. Then when the proper opportunity arises put it under the best title.

Seperately, fore anyone interested in foreclosure auctions in Florida, visit Auctiontumbler.com

Hi everyone, I have been moving a long in my real estate career, I was able to BRRRR 3 times successfully and do some flip etc. I transitioned to full time REA 1.5 years ago and don't have the W2 income anymore. (Love my life now by the way).

I have enough money to purchase a quadplex using hard money.  I want to have an exit strategy in regards to refinancing the property after it has all tenants. Even if the property has incredible numbers the refinance seems to be challenging.  

Without the W2 it looks like I wont be able to qualify a conventional refinance on the property. What are my options? Should I just look for a commercial lender who is willing to refinance the property? I don't mind paying a long term rate of like 5.5%-6.5% APY. The property can afford to pay those rates. The hard money lenders are around 7.5% to 10%, but that includes a 3,2,1 prepayment penalty. I want to eventually refinance away from the hard money lender and get down into the 6% range. 

I have also considered as another option, refinancing the property with a friend who has a W2 but that complicates the ownership of the asset. Ideally dont want to do it that way.

You should definitely try and do this, It is probably the best financial move you can make. But you will be facing some serious challenges as a financed buyer. 

1. One of the units will need to be vacant in order for you to move in. You cant consider a complex with 4 filled units. 

2. If it needs a new roof, or anything that requires FHA inspection, the financing will fall through.

3. Sellers like to sell to people who offer cash. Financed offers are considered last. So you will likely not get a deal, and or may even have to pay a premium to get into the property. (still worth it long term though).

Thats actually it. If you can somehow find a property and offer more than asking, the seller may consider. Would need to be in decent condition  in order to pass financing. 

Hi guys, if anyone is interested in being successful in foreclosure auctions in Florida, this should be your starting point. Auctiontumbler.com