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Author Topic: I have investors wanting to work with me, help with this idea PLEASE...  (Read 15510 times)

Offline freedom-now

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I have investors,  I need to know how to structure this deal.  My partner has access to money, so can we buy a foreclosure for 50K put 5K in to repair sell for the full price of 100K to an investor, give him 10K for putting it in his name place a tenant in the home and collect the difference.  How do I deal with the seasoning issue.  Or instead of purchasing the home will the bank assign it to me and sell to an investor.  Please help.

Offline ARamirez

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #1 on: January 29, 2005, 10:19:59 pm »
freedom,

I am very confused by your post. I got lost when you mentioned giving the investor/buyer 10k for putting 'it' in his name and placing a tenant in it and getting a difference...huh?

Might have to explain that one a bit better.
Abel B. Ramirez II
MHSolutions.biz
REI Noob - 2 deals purchased, 2 completed.
Dallas, Texas
214-529-5626

Offline freedom-now

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #2 on: January 30, 2005, 07:45:56 am »
We are giving the investor 10K up front as an incentive to buy.  And we will put a tenant in the home also. I need to know how to take the money out, cause from what I have been told is if I buy a foreclosure repair and sell I have to season it first.  Is that true.  From Michigan.

Offline johnmichael

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #3 on: January 30, 2005, 02:15:30 pm »
We are giving the investor 10K up front as an incentive to buy.  And we will put a tenant in the home also. I need to know how to take the money out, cause from what I have been told is if I buy a foreclosure repair and sell I have to season it first.  Is that true.  From Michigan.

Seasoning issues are lender specific - some require it - some don't.  Some have stiff policies and some do not.

To this point in my investing carrier, I have not had any problems with this issue - most lenders just require proof of the value vs purchase and repair.
"Education is the ability to listen to almost anything without losing your temper or your self-confidence." By Robert Frost, Poet

Offline freedom-now

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #4 on: January 30, 2005, 05:19:19 pm »
JM, so i can purchase for 50K sell for 100K and thats that.  Any other things I should know before I do my first deal.

Offline miti

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #5 on: January 30, 2005, 07:00:01 pm »
Here in Michigan, seasoning is requiered by lenders for appoving a conforming buyer.  In other words, someone who need a mortgage to buy your property.   If your investor is a 'cash' buyer, you should not have a problem.  In the future you can solve problems with a 'title holding trust'.

MITI

Offline johnmichael

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #6 on: January 30, 2005, 09:16:58 pm »
JM, so i can purchase for 50K sell for 100K and thats that.  Any other things I should know before I do my first deal.

If you can prove to the subject lender that the value difference is based upon substantial proof and that, you are not wanting to just make the BIG bucks by taking advantage of folks.

Making 50k profit on a 50k purchase good luck to you in today's market.
"Education is the ability to listen to almost anything without losing your temper or your self-confidence." By Robert Frost, Poet

Offline joehagan222

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #7 on: January 31, 2005, 07:57:47 am »
$50.000.00;

That is way too much profit on a wholesale deal! I would dot all my (I)`s and x my (T)`s before I gave anyone $10,000.00 to purchase a property peroid!!!! This deal doesn`t feel right to me! If you are not sure,check out every one involved! You could be throwing $10,grand away!
                 
                             (JOE)
Just for you (BABY)!

Offline ARamirez

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #8 on: February 01, 2005, 10:15:08 am »
Ok as I wanted to clarify in my earlier post...

Freedon,

Who is getting what?

Are YOU buying it from foreclosure for 50k or are you paying some investor 10K to get it assigned?

Both of your posts have left me wondering what kind of deal you are trying to do.

Quote
We are giving the investor 10K up front as an incentive to buy.
I don't get why you would pay anyone 10k as an INCENTIVE to buy a property.

If you plan on buying the property from foreclosure fixing it up with 5k of work and sell to an investor for 100k then great. If he is using a lender and you are worried about seasoning issues then you will need to somehow prove to the lender that the house was purchased at a deep discount due to foreclosure not because you are inflating the value of the property.

Abel B. Ramirez II
MHSolutions.biz
REI Noob - 2 deals purchased, 2 completed.
Dallas, Texas
214-529-5626

Offline freedom-now

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #9 on: February 01, 2005, 03:48:42 pm »
AR, I guess that is why I made a posting as to what I thought was going on.  I guess I would give the investor the money, to purchase more than one property.  Kind of like an incentive.  Do you have another way where i do not use my own money and not give him anything.  

Offline ARamirez

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #10 on: February 01, 2005, 05:19:31 pm »
Well if I understand you correctly essentially you just want to quote DO the deal and make some profit. SO! IF the property is truly worth $100k (based on comps) and you buy it for $50k, invest only 5k in repairs... sell it FAST (~30 days) for 90k to an investor and make out with about $20-$25 profit after closing and holding costs.

If it is going to take more reapirs and you don't want to hassle with it cuz it may take 30 days for you to do it all alone you may want to just wholesale it to an investor as is and make $5k-$10k profit and move on to the next one. Remember you will have closing costs on both ends so account for them in addition to your profit.
Abel B. Ramirez II
MHSolutions.biz
REI Noob - 2 deals purchased, 2 completed.
Dallas, Texas
214-529-5626

Offline Jeff Adam

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #11 on: February 06, 2005, 09:02:26 pm »
Freedom:
Anybody that is doing deals will tell you that 'seasoning' is definitely an issue.  If they tell you like-wise, they are simply a seminar graduate and don't know what they are talking about plain and simple.  After doing close to 50 deals last year, I can tell you it is a serious issue.  I had lenders not approve loans on some of my buyers because they said it was a "Flip".  This was even after I provided documentation on the rehab with before and after pictures.

Here is a solution for you.  When you purchase the property from someone in pre-foreclosure,
put the property into a Land Trust with the original buyer as the "Trustee".  You name yourself
as the "Beneficiary".  Then you simply have the seller sign assign their beneficial interest thru an "Amendment To Trust"  giving you full beneficial interest as the "Trustee".  Make sure to have it notorized.  You will need it when
you go to sell the property.  The Title Company will have you sign a "Trust Certification".

When you go to sell the property, it will appear to the lender that the original seller simply put the property in to a trust.  It will appear this way because on title it will show the original seller on title as the "Trustee" to the Land Trust.  However, the original "Trustee" assigned you their beneficial interest and have documentation to prove it!

I have used this method with great success and it should work for you as well if executed correctly.


Best Regards,
Jeff Adam
« Last Edit: February 06, 2005, 09:25:55 pm by Jeff Adam »
www.ForeclosureProfitsUSA.com
"Take Your Real Estate Business To The Level"

Offline Skywalker

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #12 on: February 10, 2005, 07:54:44 pm »
Jeff let me ask you something.  to be able to do the following ..... (Land Trust with the original buyer as the "Trustee".  You name yourself as the "Beneficiary".  Then you simply have the seller sign assign their beneficial interest thru an "Amendment To Trust"  giving you full beneficial interest as the "Trustee".  Make sure to have it notorized.  You will need it when
you go to sell the property.  The Title Company will have you sign a "Trust Certification".)
Do you contact the title company to do it?
Do you do it with a public notary?
Do you do it yourself and if so how do you go about it?
Thanks for your info!!!!

Offline EZmoney

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #13 on: February 10, 2005, 08:18:29 pm »
Are you saying you have a "straw buyer" that is willing to buy the property at inflated price ( in 30 days), and then the "straw buyer" and you split the profits. $10,000 to straw buyer for using his credit---the balance to you.

A lot of people have gone to JAIL for loan fraud. Be careful. NEVER PAY SOMEONE TO USE THEIR CREDIT.  It is called a "straw Buyer" the FBI and US Attorneys office may be calling you if this deal goes into default.

You middle man buyer may just want the $10K and never make a payment--this is called first payment default. Lender's first call is to the FBI.
Do your homework on each deal. Understand your market and your own financial strength and weaknesses. I have been doing R.E. finance/ mortgages/r.e. partnership syndications. for 25+yrs. email me your real deals.
 A few good people hunger to make money by sharing their experience--network together.

Offline Jeff Adam

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Re:I have investors wanting to work with me, help with this idea PLEASE...
« Reply #14 on: February 10, 2005, 08:29:21 pm »
Money:
This has nothing to do with a Straw Buyer!  We don't do business like that!
In terms of your questions SkyWalker.  I have my own "Land Trust" that I use.  I use an escrow company to do all the paperwork.  It has to be done correctly so it is worth it to pay a couple hundred bucks to have it prepared for you...

You are simply purchasing the property and putting it into a land trust which you are the beneficiary of and the seller is the trustee of.  You then have the seller 'assign' you their beneficial interest which gives you full control of the property...  You then fix up the property and re-sell it to your end-user..  An 'actual' person, for full retail value..

I would recommend you take a course on Land Trusts by Bill Gatten....



Best Riches,
Jeff Adam
www.ForeclosureProfitsUSA.com
"Take Your Real Estate Business To The Level"

 




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