Jump to content
The forums have been archived and are now read only. Years of great info saved for your reading pleasure. Thank you! Visit us on Facebook: https://www.facebook.com/NakedInvestor/ ×
The Naked Investor Forums
ErikOk

More Texas Questions

Recommended Posts

The BK wouldn't involve the LO since there isn't a note created or title transfer, but there are still potential issues if a person doesn't do the diligence to screen the buyer OR the seller.

Refi's used to be easier back in the day, now, they're still looking at the same guidelines, but at least they already have the down and could roll in closing which is nice. Plus the buyer gets the tax benefit.

Share this post


Link to post
Share on other sites

You can't refi L/O's...

 

You can't refi what you don't own...

 

It's a purchase...

 

Wow... just learned something new...

It's been since 2001 since I had rentals..

(well had a few left up until last year)

 

In 2005 the fed law changed not allowing

BK to affect landlords... that's good news...

 

Still doesn't want to make me go back to

wanting to be a land lord...

Share this post


Link to post
Share on other sites

Right, you can't refi a L/O.

What I meant was back in the day of mortgage madness, the refi was highly sought after due to even lower guidelines.

Now, in order to refi, you still have to qualify.

That's just 1 reason a number of people lost their homes that had ARM's.

They tried to refi, but couldn't qualify.

Still though, doing OF does have advantages for sure.

The guy that built our house has a ton of OF's, adn makes a killing.

Course, he prices them so far above what they will ever appraise for in my lifetime the people will never be able to refi...

That seems wrong to me...but...hey...

Share this post


Link to post
Share on other sites

Mine are usually priced a hair

below market...

 

Starting with a low 7.9% interest

rate... and then rising 1% per year..

to stimulate a refinance...

 

Just for me... owning property eventually

bites you in the ass...

 

So, I'd rather just own the paper...

Share this post


Link to post
Share on other sites

David-

 

What is the percentage of the end buyers that refi or sell?

 

I don't see the equity out there these days.

Share this post


Link to post
Share on other sites

If you understand "time value of money"

 

You can buy a property with little

equity.... wrap it... and in 2 - 5 years..

 

Create monster equity... because of the

yield spread...

 

So, you work to get your created equity

out of the properties and into cash...

 

Cash - equity - cash

 

I get approx 25 - 35% per year to cash

out...

Share this post


Link to post
Share on other sites

I do understand. That is about what I am getting with my L/Os who purchase currently.

 

I do see the value with what you do. I think it's great. You may get a bit more initial upfront as compared to my SLOs (sandwich lease options); however, I can remove a the tenant/buyer after a year, if they are not working to purchase and place another and collect a second or even third upfront. I would think I receive about the same monthly and potential back end depending on the spread in the deal.

 

My set up with SLOs should the house go vacant is that I do not need to continue to make those payments while placing another tenant/buyer. Not sure if you do with an end buyer? And larger repairs are the responsibility of the seller, owner of the house. Some landlord hassle, but it is mostly people dealing issues.

 

I like the position you take in your deals, holding the note, and you may make a bit more on the yield spread at the back end; however, some risk 3 to 5 years down the road in wear and tear. I assume you deal with the deed should the end buyer leave and the house goes vacant in your paper work?

 

Law suits are relative and subjective. I worry more about big brother and what they will come up with next these days.

 

Nice, thanks for the reply.

Share this post


Link to post
Share on other sites

The model I currently Use now...

Sub3.... I've never had a single law suit..

(knock on wood)

 

Sub2... was a pain in the ass....

 

As far as yield spread... My cash flow

increases each year...

 

My yields on equity or typically..

12% - 45%... until cash out...

 

Its been about 1 in 50 properties that I get

back have any problems...

 

But, I don't get many back.. less than 5%...

and of those... only half that we have to

actually foreclose on...

 

And no... my set up is... we don't have

to make payments either...

 

Its a business decision.. plain and simple..,

Took me a while to figure that out...

 

Me... I got burned on the headache of owning

property and being a landlord...

 

Those I often did get back in disrepair... when

someone only puts down a few thousand... they

are more likely to try and get it back for some

reason.. or so it seemed... or try to drag out the

evictions... different when there plan is to own the

house...

Share this post


Link to post
Share on other sites

×
×
  • Create New...