Indiana-Joe's Answers to PM Questions

Question# 1

Hi Joe,

I'm interested in following your strategy to acquire REO's. I've located some local banks, and started calling them. I've gotten one asset manager to email me their REO listings. After running the numbers for one of the properties that is listed for $59,900, it looks like I should offer something closer to $10K - $20K max. My question is "Is there a minimum amount a bank can finance for a mortgage?" Thanks for your help.

Answer # 1
A bank can finance any mortgage amount. If the bank carries 100% of the mortgage they may ask for a higher purchase price. When you ruun your numbers always stand your gorund for the most you can pay. If the deal does not make sense to offer more, than move on to the next deal Good luck. Believe and Achieve! - Joe

Question # 2

Hey Joe,

I was reading through some material about you and your wife's REO investing strategy. I had a couple questions I was wondering if you could answer.

1. I was reading up on your section in the book "Your Town Your Real Estate Profits" on your first few deals. When you say you've purchased the home, are you paying cash? If so, how did you come up with the money.

2. As a beginner what sources or payment options did you look for to attack this type of investing?

Thanks for time! Take care and hope to hear from you soon.

Answer # 2

I believe one of the best types of banks to deal with for REOs are the small local community banks and credit unions. In Dean's Book, "Your Town Your Real Estate Profits" we had a bank finance a REO 100% for us. We were flexible on price as long as they provided great terms.

We wanted to esnure the home would rent out for enough to cover the bank payment of principal, interest, taxes and insurance, etc. The home has positive cash flow and the bank financed the entire deal. When you are looking at a deal, the better deal you lock up the more options you will have of what you can do with that deal.

If you want to raise some additional cash, you may want to look into fast cash strategies such as bird dogging, assignments and double closings to raise some additional cash...fast. Good luck. Believe and Achieve! - Joe

great thread! very informational! Very kind of you to share your knowledge!

Already bookmarked!

Learning and progressing every day,

Valerie

...Thanks for the nice comments. I am glad you find the information helpful. I often get PMs and thought it would be a good idea to share with others. Have a great weekend. Believe and Achieve! - Joe

Question # 3

Joe,
Hi, I have a question I hope you can help me with. I'm of course a newbie so quite inexperienced, my question is I have these two condos that are in great shape and rather cheap. Glitch is they cannot be used as rentals, my thoughts are if I buy them and have them in a Revocable trust and list them as a beneficiary with say 1% then I can rent it to them. Becuase technically they are an owner... Am I flawed in this thinking? I greatly appreciate your assistance.

Answer # 3

There are a few things you may need to consider here. First you may want to review the By-laws of the Condo Association. A key power team member to help you is your Attorney. The Attorney should be able to review the by-laws and provide a better legal answer. I know many condo associations do not want units to be rented. Thus, there could be issues you run into.

Sometimes we face legal issues where we have to defend our position. It can cost a lot of money in court and attorney fees to be right. Therefore, way the pros and cons of whatever action you decide. I read before that revocable trusts can be very expensive to setup. In most cases they will cost more than a Will. You always want to ensure the benefit outweighs the cost of your decision. I hope this helps. Good luck. Believe and Achieve! - Joe

It wouldn't surprise me if you have tons more pms Q&A to post here.
This looks like a start to an e-book that you could publish.
BTW, thanks for the reply regarding my question on personal belongings in estates in your blog, greatly appreciated!

Don't stop believing!