gregzilla

Andrew, I look forward to your post about "ARM's and 'interest only' type loans and why ALL investors should use them". I've only recently learned what they are and I want to learn as much about them as I can. Greg

Michael, Are you saying that tenant/buyers may not actually "get" their rent credit credited toward the purchase? So lets say an agreement says they can buy the house for $200,000 and they had put down $5,000 option consideration and had been getting a $200/month rent credit for 1 year. They should have $7,400 equity. But now are you saying a lender my only see it as having $5,000 equity? What happens to the other $2,400? -Greg

So is it something that you try to setup with every seller? I assume it's not a deal-killer if they don't agree to sign it. Are there times when you definately want to have it signed (based on the terms of the deal, the property, the sellers attitude, etc...)? Greg

Let me make sure I have this correct... So, if you do a deal with a seller and sign all the contracts, you could also require them to sign a performance mortgage? And by doing so, you'll have the right to foreclose on their property if they don't "perform" on any of the contracts that were signed? If I'm understanding this correctly, this would be a very powerful thing for you (as the investor) to have the seller do. Is something that would be standard procedure? Do sellers always willingly go along with this? Thanks, Greg

For my newbieness, can some explain to me a few of the mortgage terms that are being thrown around? Performance mortgage? 5/25 or as a 3 or 5 year ARM? Balloon or ARM adjustment? Interest only loans? Thanks, Greg

Hey, I was wondering if there's anyone here who lease-purchases and/or sandwhich leases in southern California? I was wondering if there's anything that makes doing it here different from other states? Thanks, Greg

I've been doing some reading through the archives and I have a couple of questions about some things I found. 1. When doing sandwhich-leases, if either of the two lease agreements (seller-you or you-buyer) are over 24 months, could this trigger a due-on-sale clause? Or will any length of lease trigger it? 12, 24, 36, 48? 2. If you do a 1 year lease with option to buy or renew the lease with a buyer/tenant, do you go into the details of the renewal at that time? For example: Say you offer a rent credit, take a $5000 option deposit and set the purchase price to $150000 for the 12 month lease-purchase. If after the 12 months, say the tenant wants to renew for another 12 months, but for the 2nd 12 months, you're not going to give anymore rent credit, you want to collect $2500 MORE option deposit and you raise the purchase price to $160000. Would you setup these numbers in advance so the tenant knows you're going to do this when they sign for the 1st 12 months? Or do you not let them know until they decide they want to do another 12 months - just telling them that the terms may change if they renew after the first 12? Did this make sense to anyone? Thanks, Greg

Is this the kind of site you're looking for? http://www.realtytrac.com/ Greg

I have a few questions about the benefits of forming an LLC and also about how I would be sure to use it correctly? If I had an LLC, I would just make sure that all contracts were between the LLC and the other party as opposed to between me and the other party, correct? When purchasing things such as a new computer or a new car, would I purchase it in the LLC's name? And then could the LLC deduct the expenses for those and anything else that could be deemed essential for "business". Or is "investing" not consdered a business for those purposes? LLCs just pass their profit along to the owner and so don't pay federal taxes, correct? But I assume they still need to file. Thanks for any info, Greg

I'd love to be able to get a better handle on this. Let me run through it and tell me how I'm doing. So if I lease-purchase from a seller, and then turn around and lease-purchase to a buyer (a sandwhich lease, correct?) then you need to do two closings... If you get a freindly title company, they'll do a "double closing" - bascally both at the same time. Do you get to pick the title company or does it have to be a specific one? Do you have to pay closing costs twice? Or you once and the buyer once? With a double closing, are you actually only owning the property for a matter of a few minutes or hours? Or not really ever? Does the seller need to get involved at this stage or would that all have been taken care of when the initial contracts were signed? What's this talk of "seasoning" and why is it bad to not have a "seasoned title"? Thanks- -Greg

From creativeINCESTor.com?? Whoa, that must be an interesting site... Sorry, couldn't resist. And, now for my newbie question: What exactly is a double closing? Thanks, Greg