New to lease purchases

[byoon 0]

Hi.

 

Nice package, very informative and helpful. I see it all before me, now I just have to bring it into my lap.

 

I do have some questions though after my first initial reading (I'll be reading this over and over and over until I can do it blindfolded with one arm tied behind my back, hopping on one leg, and that pen between my teeth).

 

1) I thought that notarizing must be done at signing in front of both parties, is this correct?

 

2) I am a licensed RE salesperson, how will this affect my negotiations and interests in the properties that I am seeking to control? (newly licensed, 5 weeks new)

 

3) Can we take the word of the Seller that title is free of encumberances other than the listed ones? Will we be needing to include title searches in our due diligence? Do Property Profiles include title abstracts or are abstracts to be out-of-pocket expense to be recouped later?

 

4) How do we use MLS/Profiles to get comps? (I work in rentals in Manhattan of NYC) Are we looking at asking prices or actual purchase prices?

 

I think these are more than enough questions from this newbie. If you could answer them, It'd be great.

 

I'm sure I'll be quite the regular on this board.

Thanks much,

Ben

[Mr Saint 0]

Ben,

 

I can answer #4 for you...

 

Always use the actual purchase price when looking for comps. As you know, most people when selling will list their property for the most they think they can possible get for it. More often than not, the price will come down a few thousand before it actually sells. Therefore, the purchase price is the true market value for that piece of property....true market value meaning "what the general public is willing to pay". Also, watch out for square footage. I don't know if this is the case in your area, but where I live, MLS will often NOT list square footage for some reason, I guess they just go by bed/bath count. Always make sure the SF of your comps is similar to your subject...a difference of 1000 square feet could mean a difference of $20,000 in the market value.

 

Hope that helps,

[MichaelC 160]

Hello, Ben, and welcome to The Naked Investor!

Thank you for the kind words about the manual. And, yes, you are right. Now, you need to use the materials you have at hand, along with the help available to you here, to make it all come to fruition.

I do have some questions though after my first initial reading (I'll be reading this over and over and over until I can do it blindfolded with one arm tied behind my back, hopping on one leg, and that pen between my teeth).

Will you be selling the video?

1) I thought that notarizing must be done at signing in front of both parties, is this correct?

Not all documents require notarization to be valid. For the ones that do, the notary must witness the actual signing, and have a valid ID presented to verify the identity of the person before him/her.

2) I am a licensed RE salesperson, how will this affect my negotiations and interests in the properties that I am seeking to control? (newly licensed, 5 weeks new)

You will need to tell any homeowner that you are, in fact, a licensed Realtor. But, you should also further state that the deal with them is for your own personal benefit and that there is no fees or commissions of any kind involved. Your being a Realtor should not in any way hinder you from dealing as an investor.

3) Can we take the word of the Seller that title is free of encumberances other than the listed ones? Will we be needing to include title searches in our due diligence? Do Property Profiles include title abstracts or are abstracts to be out-of-pocket expense to be recouped later?

Sure, we can take the word of the seller. But, should you is the question. As a new Realtor, Ben, you will soon become familiar with the expression, "Buyers are liars. Sellers are story tellers." In other words, the best thing we have going for us is our due diligence. I don't recommend a title search for every property we are looking at. However, for every deal you secure you should probably consider having one done. It's relatively inexpensive, ($80-$125 usually). Plus, in your position as a Realtor, you will soon be making contacts where you may be able to call on an associate at the title company who can do it for a reduced cost, possibly even free, in exchange for your business. (You scratch my back, I'll scratch your's ) .

You'll note in the contracts you now have, this issue of titles and liens is addressed. Let me know if you have any questions about them.

4) How do we use MLS/Profiles to get comps? (I work in rentals in Manhattan of NYC) Are we looking at asking prices or actual purchase prices?

Purchase prices, only. Asking price means nothing. How much someone was willing to pay is what determines what the property is worth.

Hope this helps. Don't be shy. See you around the board, I'm sure.

[byoon 0]

Thank you very much for your answers, to you both.

 

Just to let you know my status, I am procuring an attorney here in NY to review the contracts, and secure future closing arrangements.

 

Of course I will let you know of how things are going, as they come along.

 

I'm being bombarded by different RE strategies at the moment (seller financed, foreclosure, subject to, rehabs because I am continuing my education) , but I have decided to go the L/P-L/O way due to its low capital needs and relatively lower level of associated risk.

 

Thank you. I hope to have post-worthy recounts very soon!

 

 

PS.

 

Speaking of closing, whose attorney do we use?

[MichaelC 160]

I'm being bombarded by different RE strategies at the moment (seller financed, foreclosure, subject to, rehabs because I am continuing my education) , but I have decided to go the L/P-L/O way due to its low capital needs and relatively lower level of associated risk.

Ben, a common mistake among new investors is their belief that they need to read everything ever published regarding real estate investing. It simply ain't so. This leads to that well known disease called The Paralysis of Analysis. Don't fall into that trap.

You need to focus on one technique that fits your needs as a new investor. Then, once you have settled on one, learn it well and get out and actually do a few deals. Gain some real world experience. At that point you are ready to expand your education. If you've been wanting to try something different and new, that would be a good time to do so. Don't overwhelm yourself with book smarts coming out of the starting gate. It'll confuse you more than anything.

Speaking of closing, whose attorney do we use?

Usually, the buyer and the seller each have their respective attorney present for the closing.

[byoon 0]

...a common mistake among new investors is their belief that they need to read everything ever published regarding real estate investing.  It simply ain't so.  This leads to that well known disease called The Paralysis of Analysis.  Don't fall into that trap.

You need to focus on one technique that fits your needs as a new investor.  Then, once you have settled on one, learn it well and get out and actually do a few deals.  Gain some real world experience.  At that point you are ready to expand your education.  If you've been wanting to try something different and new, that would be a good time to do so.  Don't overwhelm yourself with book smarts coming out of the starting gate.  It'll confuse you more than anything.

 

Yes, sir.

 

 

Usually, the buyer and the seller each have their respective attorney present for the closing.

 

I'm trying to establish a relationship with an attorney to take with me on my road to wealth. How can I get him involved so I can save out-of-pocket expenses in return for future business (ie closings) thrown his way?

 

Much thanks in advance for your wealth of knowledge and willingness to share it, Michael.

[MichaelC 160]

I'm trying to establish a relationship with an attorney to take with me on my road to wealth. How can I get him involved so I can save out-of-pocket expenses in return for future business (ie closings) thrown his way?

Ben, I'm not quite sure what you mean here. Are you asking how to set up an attorney/client relationship where he does some free/reduced rate work for you in exchange for a volume of business from you? If so, the only way that will happen is for you to provide that volume of business first. Then, you can say, "Hey, Counselor, that's my fourth closing this month with you. What say the next one is on the house?"

I suggest you ask some other local investors who they recommend. Are there any REIG's locally? That would be a good place to network.

[pinkerton 0]

Hi Ben,

 

Re: lawyers. I think that bouncing this issue of your local REI club members is a good idea. As a practical matter I'd pick an experienced lawyer who isn't from one of those "wear your suit coat in the halls" type of firms...they won't want to negotiate fees.

 

On the other hand, don't go to a lawyer whose Bar certificate still has wet ink on it. They won't be able to find their hind-end with both hands. I know, I've been there.

 

Get a referral to an attorney whose been around the block but understands that they still put on their pants (or panty hose as the case may be) one leg at a time. When you interview them to be your lawyer lay your plans out and ask them up front if they'd be interested in working with you on the fee issue. If not, interview another lawyer. You'll find one that will work with you.

 

Hope that helps.

 

Mike P.

The Legal Eagle

[byoon 0]

gratze

[pinkerton 0]

Prego!

 

Mike P.

The Legal Eagle

[MichaelC 160]

gratze?? prego?? What the heck is goin' on here? When did The Naked Investor turn into Virtual Italia?