Ask Dean's Coaches a Question

Thanks much nstreet for the information. I know that it would be using a loophole to make it happen but was afraid that the IRS may have a way of disallowing it anyway. I will contact an IRS attorney and see what they advise.

I posted this question in another area of the forum earlier today. Then I found this area, so I am posting it again here.

Thanks in advance for all your help !!

I have been reading alot of entries here on the forum about how to determine the FMV of a property, the starting point for all calculations. Yet, I am still confused.

I have looked up a couple of properties on the TotalView site and at Zillow and at Cyberhomes. What I am finding is, that the amount listed at these sites is more than two and half times what the County Clerks assessed value is, and about double what the last known selling price was for (which is less than 24 mo. ago).

I have also looked at recent sales for the area. There is NONE for the last year that would even begin to be comps within a 1 mile radius, and I would not want to expand beyond that because of the difference in neighborhoods.

How do I go about determining what the FMV is when there is such a large disparity in the $$ amounts that I am seeing.

Any and all help would be appreciated at this point. I just don't know where to get a FMV $$ amount for this property to start the process of calculating for an offer.

Thanks, Marcus

I posted this question in another area of the forum earlier today. Then I found this area, so I am posting it again here.

Thanks in advance for all your help !!

I have been reading alot of entries here on the forum about how to determine the FMV of a property, the starting point for all calculations. Yet, I am still confused.

I have looked up a couple of properties on the TotalView site and at Zillow and at Cyberhomes. What I am finding is, that the amount listed at these sites is more than two and half times what the County Clerks assessed value is, and about double what the last known selling price was for (which is less than 24 mo. ago).

I have also looked at recent sales for the area. There is NONE for the last year that would even begin to be comps within a 1 mile radius, and I would not want to expand beyond that because of the difference in neighborhoods.

How do I go about determining what the FMV is when there is such a large disparity in the $$ amounts that I am seeing.

Any and all help would be appreciated at this point. I just don't know where to get a FMV $$ amount for this property to start the process of calculating for an offer.

Thanks, Marcus

I relistened to Dean's conference call from 02-27-2008 a few weeks ago. As the other calls, it was packed with great information and content. At the end of the call Dean had mentioned that he participates in a training held about 3 times a year in Salt Lake City, Utah. Dean indicated a workshop training is conducted by himself and the Coaches as a live training. I have the following questions:

1. How many people attend each training event?
2. What types of topics were covered at the trainings, can you provide a brief outline?
3. Do all the trainings during the year offer the same content covered at each training?
4. Is the training for anyone, or only for the DG Official Coaches?
5. Is the training more of a beginner, intermediate or advanced investor training?
6. When are the dates for the trainings and how much does it cost?

Thank you for any information you can provide and if it may be beneficial to pursue. Believe and Achieve! - Joe

First, let's start with what you have used. The websites you mentioned use mathematical algorithms to find the values in the area. These values as you have noted can be way, way off because the way the algorithms create the values.

The assessed value is not used for market value this value is used to determine how much you pay in taxes. You want this low anyway. Then with this, have you ever known the government to be on track?

What I suggest is that you use a Realtor to provide comparables of properties that have sold which are similar to the property that you are looking at. - Really, this is about the only way I suggest-. Once you have the comparables find the average sales price or average price per square foot to find the value. I also suggest that you not look older than 6-8 months if you can help it.

This should help you get better comparable values.

My question is Im triying to come up whit a company name to use for my business card and how can I put one together and where to check if is available and Im going after buyers that have cash/credit thanks olot.

1) The amount of people depends on the training. For example the edge conference had about 150 people in attendance where other trainings through the year are more intimate.

2) This will vary for each conference. Generally, there is information on financing, foreclosures, motivation, and specialty trainings.

3) No. See answer 2.

4) Yes. Anyone can attend it is not secluded to just Dean Coaches or success academy.

5) Yes. Anyone can get great information from the presentations that are given. The information is given in such a way that everyone will understand at their level.

6) This is a good question. I am usually notified about three weeks prior so that I may prepare for the conference. If you are interested in more information about times I can set you up with a business consultant that is familiar with the conferences. You are welcome to send me a private message.

From what it looks like you have three questions. I will answer them the best I can in order.

1) Often if you are considering a business name we (the coaches) will usually recommend that you add something like: Investments, Group, Associates, or something similar. This will allow you to look larger than maybe you really are, it also does not define you to just real estate. You could invest in notes, real estate, commercial, or even stocks and still use the same name.

Also, another recommendation is that you give the name something that you like and that is not associated to your name. Such as: If you name was Smith you would not want Smith Investments. Instead you may look to something like Vigor Investments because you are a runner and like running. This leads you to think about stamina, you then look up the thesaurus and find vigor with is tied to your key word. - Just an idea.

2) Your state will have a business development committee or office. You can contact them either through phone or website and find out if a name is available.

3) "Im going after buyers that have cash/credit thanks olot" - I am not sure what this means?

I am planning on using an agent on my deals. What is a fair commision to offer my agent on the deals I find and they are only writing offers?

Jim

Thank you for taking the time to answer my question. I appreciate the information you provided. Continued success. Have a great day. Believe and Achieve! - Joe

Hello,
I would like to know if I am acting as a note finder and a seller has a property for sale that is free and clear and a buyer is interested in buying the property what documents would I send to the seller and what documents would I send to the buyer????? This will be my first time conducting a deal in this fashion and I want to be sure that everything is done properly.
Thank U for your time
Have a Good Day.

This is a hard answer to give. The best way to answer this would be to say it depends. It depends on what you negotiate with the Realtor. I can tell you what I pay. I will pay 1% if they do nothing more than make offers and give comparables as well other basic research. Their pay increases from hear. I also pay 5-10% of the equity provided above 30%. So, say, the Realtor helps me get a property that is worth $100K for $60K the Realtor would get 3% from the seller (because the seller signed agreement with the listing agent to pay 3% for the listing agent and 3% for the buyer’s agent) and I'll pay $500 - $1000 more for the additional equity ($10K additional equity above the 30% times 5 or 10%).

The contracts you will be using are:

To the seller:
- Commitment Letter (basically a sales agreement)
- Payout agreement

To the Note Buyer:
- Non-circumvent agreement. (This keeps the note buyer from going around you and working the transaction directly with the seller without paying you)

You can Google all of the agreements and find a copy for yourself very easily. Keep in mind that if the seller creates seller financing with the intent of selling the seller financing their note will be discounted. Depending on the payor’s credit, income, terms of the note there may be a greater discount as well.

Just after writing the before mentioned post I went into my files here at the office and grabbed the three contracts that I have mentioned – the commitment letter, payout agreement and non-circumvent. You will find them in the following post. Each of them will start with a bolded heading then the contract will start after words. Keep in mind that some of the formatting has been lost and I suggest that you get any contract reviewed by a lawyer to make sure it meets local laws before you run around using the contracts. However, you will find them useful to you for information is nothing else. All private names should have been excluded. If you see private information please let me know.

COMMITMENT LETTER
THIS COMMITMENT TO PURCHASE, is made Today’s Date by and between you, Note Seller’s Name, the undersigned (Seller), and Your Name Here, (Purchaser), and/or its successors and assigns, whose address is Your Address Here.
This commitment is made in ­______ County, subject to and contingent upon Your Name Here, and/or its investor's inspection and approval of the property and all documents including, but not limited to, credit, appraisal and title work.
Seller agrees to sell and convey to Purchaser, and Purchaser agrees to buy, upon the terms and conditions set herein, that certain Type of Contract (mortgage, trust deed, or land contract) wherein the Payor owes a current principal balance of $Note Balance as of this month, carrying interest on the principal balance at the rate of Interest Rate% per annum, and requiring a monthly principal and interest payment of $Payment Amount.
The agreed purchase price is the sum of $Purchase Price provided there are no underlying problems. If the contract has to be renegotiated a verbal commitment from the seller will be binding.
The subject property is located in __________ County and is legally described as follows:
Property Street, City, State & Zip Code
______________________________________________
ADDITIONAL LEGAL DESCRIPTION TO BE PROVIDED AND
VERIFIED BEFORE CLOSING
Seller warrants that:
1. There are no prior liens or encumbrances on the property subject to the Instrument except as stated below;
2. SUBJECT TO NO OTHER LIENS OR ENCUMBRANCES;
3. It has full power, authority and legal right to execute, deliver, and perform, its obligation under this letter;
4. This Letter and the Instrument are legally valid and binding, and enforceable in accordance with their terms, and there are no claims or defenses, personal or otherwise, or offsets whatsoever to the enforceability or validity of the Instrument;
5. There are no lawsuits or legal proceedings pending, or to the best of Seller's knowledge, threaten regarding encumbrances on, or the ownership, use or possession of, the property or the Instrument;
6. No brokerage or other commission is due and unpaid in connection with the Instrument; and,
7. Seller has, as of the date of this Letter, and will have as of the date of the closing, good, marketable title to the Instrument.
During our processing period any additional payments made to Seller on the Instrument which cause a reduction in the principal balance below $100 will also cause a minor adjustment in the purchase price at closing. Seller agrees to return any payments received after the closing of this Instrument.
Seller understands that Your Name Here, is not acting as an advisor for Seller in connection with this transaction, nor as Seller's agent, but rather is dealing with Seller at arms length, at all times. Seller acknowledges that s/he has sought and received whatever independent legal, tax, accounting or other advice s/he desires concerning this transaction. Further, Seller is not relying on Your Name Here, in entering into this transaction, but is acting on his/her own best judgment.
Seller agrees to execute all necessary documents to effect the assignment and conveyance to Purchaser of its interest in the Instrument. Seller agrees to furnish any and all documents in his/her possession necessary to consummate this transaction. If, after closing, it is discovered that errors, omissions, or loss of documents has occurred, Seller agrees to cooperate with the Purchaser to correct any and all errors, omissions, or losses with in ten (10) days of receipt of notice from Purchaser.
Upon our receipt of all the necessary closing documents related to this transaction, we should be able to close within thirty to forty five days.
All normal closing costs will be the responsibility of the Purchaser with the exception of any additional, or unexpected, legal cost necessary to clear or perfect title. Otherwise, Seller will only be responsible for the processing fee of $125.00.
Should the Seller fail to close, after signing this agreement, Seller shall be obligated to reimburse Purchaser for all out-of-pocket expenses incurred related to this transaction, up to the time of cancellation. These expenses should normally be limited to title and/or appraisal fees, plus the processing fee of $125.00
Purchaser hereby gives Seller a specific period of ten days to complete, and return, this Commitment Letter, and agrees to keep this offer open for that period of time. If Seller is unable to complete, and return this agreement within the allotted time, this agreement shall be canceled. Purchaser may extend the time period, upon conditions it deems acceptable.
Your Signature Here
By__________________________
ACCEPTED:
____________________________ ___________________________
Seller’s Signature Seller’s Signature
SSN:________________________ SSN:_______________________
DATE: ______________________

PAYOUT AGREEMENT
(Note Buyer) agrees to pay (your name) upon closing the deal with (Note seller) for the property address: (address, City, State) .
This agreement will included in the escrow instuctions for this transaction. Payment shall be made to:

NON-CIRCUMVENT AGREEMENT
Non-Circumvention, Non-Disclosure And Confidentiality Agreement

THIS AGREEMENT entered into on this _______ day of _____________, 200___ is for the Professional Association and arrangement of Non-Circumvention, Non-Disclosure and Confidentiality between ________________________________ whose office is at ____________________________________________ and ________________________________ whose principal place of business is at ____________________________________________ hereinafter, called the "The Parties."
The Parties with this agree to respect the integrity and tangible value of this agreement between them.
THIS AGREEMENT is a perpetuating guarantee for five (5) years from the date of execution and is to be applied to any and all transactions present and future, of the introducing party, including subsequent follow-up, repeat, extended, renegotiated, and new transactions regardless of the success of the project. The introducing party (name here) is entitled to 10% of any payments received in said time frame.

Because of THIS AGREEMENT, the Parties involved in this transaction may learn from one another, or from
principals, the names and telephone numbers of investors, borrowers, lenders, agents, brokers, banks, lending corporations, individuals and/or trusts, or buyers and sellers hereinafter called contacts. The Parties with this acknowledge, accept and agree that the identities of the contacts will be recognized by the other Party as exclusive and valuable contacts of the introducing Party and will remain so for the duration of this agreement.

The Parties agree to keep confidential the names of any contacts introduced or revealed to the other party, and that their firm, company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees, or consultants will not contact, deal with, negotiate or participate in any transactions with any of the contacts without first entering a written agreement with the Party who provided such contact unless that Party gives prior written permission.

Such confidentiality will include any names, addresses, telephone, telex, facsimile numbers, and/or other pertinent information disclosed or revealed to either Party.

The Parties agree not to disclose, reveal or make use of any information during discussion or observation regarding methods, concepts, ideas, product/services, or proposed new products or services, nor to do business with any of the revealed contacts without the written consent of the introducing party or parties.

The Parties agree that due to the many variables surrounding each Business Financial Transaction that will occur because of this agreement, the commission to be paid and/or the fee structure between the Parties can vary. A separate fee/commission agreement will outline compensation for each Business/Financial Transaction. The fee or commission agreement must be drafted and acknowledged by signature before all Business/Financial Transactions.

In case of circumvention, the Parties agree and guarantee that they will pay a legal monetary penalty that is equal to the commission or fee the circumvented Party should have realized in such transactions, by the person(s) engaged on the circumvention for each occurrence. If either party commences legal proceedings to interpret or enforce the terms of THIS AGREEMENT, the prevailing Party will be entitled to recover court costs and reasonable attorney fees.

The parties will construe THIS AGREEMENT in accordance with the laws of the State of Oklahoma, County of Oklahoma. If any provision of this agreement is found to be void by any court of competent jurisdiction, the remaining provisions will remain in force and effect.
THIS AGREEMENT contains the entire understanding between the Parties and any waiver, amendment or modification to THIS AGREEMENT will be subject to the above conditions and must be attached hereto.
Upon execution of THIS AGREEMENT by signature below, the Parties agree that any individual, firm company, associates, corporations, joint ventures, partnerships, divisions, subsidiaries, employees, agents, heirs, assigns, designees or consultants of which the signee is an agent, officer, heir, successor, assign or designee is bound by the terms of THIS AGREEMENT.

A facsimile copy of this Non-Circumvention, Non-Disclosure and Confidentiality Agreement shall constitute a legal and binding instrument. By setting forth my hand below I warrant that I have complete authority to enter into THIS AGREEMENT.
For:
____________________________
____________________________
(Signatures)

Your name
Your address
City, Stae & zip code

Signed:

(Note buyers Signature)

(Your Signature)

Thanks very much for the info and sorry for the last sentence.I was just saying that I am after buyers whit cash or have been approve for a loan and I'm putting a name together that sounds good to them, trying to move forward whit this step first.I'm working on putting together a buyers list.I just read indiana joe question about the meetings and if possible if I can get more info on that. Thanks again for all the help much respect.

They are right. being in constant contact with your lender is the way to go but I would also STRONGLY recommend getting yourself a HUD counselor. I just went thru this very same thing, being behind 10 months on the mortgage and such. I trusted my HUD counselor and let her do her job, giving her all the documentation she needed ASAP and such. In addition, when my mortgage company did contact me, the right hand had no idea what the left hand was doing and I finally learned to listen to my HUD counselor and not so much to the mortgage guppies. Even after my loan modification was approved, they still called me to ask when I was paying all my back payments. I'd be glad to provide more info if you want to PM me. Good luck and most important of all, don't give up!
Janice "crazy cat lady"

I understand how to fill out the purchase agreement concerning earnest money from the example from the book. It seems like some sellers would have objections to signing a contract as reccommended by the book. I am preparing for my first IEE deal and want to be prepared to handle this possible objection from a seller. Is putting a small amount such as 50 or a 100 dollars a possible solution to over come this objection? I realize this money would be at risk if I had to back out of a deal, but it would be a risk I would accept if it resulted getting a deal under contract that otherwise might not be. How is this situation best handled?

Thank you for your help,

Jim Milton

Is there a similar site like coastal-funding.com, that you know of, which doesn't take long in sending you the email with generated POF letter attached? I am having trouble (in others words "This page cannot be found") generating a POF letter from Coastal-Funding, which I need right at this moment, to get this offer of mines resubmitted and sign off by the lender. Thanks in advance.

From your post I am not sure what the objection is: "Is putting a small amount such as 50 or a 100 dollars a possible solution to overcome this objection?" From what it sounds like you have a questions concerning earnest money. Earnest money main purpose is to bind a contract. This amount can be anywhere from $1 (that one dollar) up to whatever you wanted to pay. Though it does not seem to be legally stated $100 dollars seems to be the minimal loan, however, I have seen this number lower.

If you are going to pay earnest money you can get this back if the contract has a way for you to get the money back - such as a contingency clause. Another way to do earnest that is quite safe is to create a promissory note for the earnest. Such note may say something like "I promise to pay the seller of said property $1000 dollars to act as earnest money at closing."

I wish that there was a way to have other investors videotape their transactions, so that first time investors like myself can see how a deal is made and become 1000 times more motivated in doing their first time deal.

Would writing a post-dated check,set for closing date, also work for Earnest Money? Or would that be too risky? Meaning they could probably still cash it ahead of time and then you now have a "bounced check." By the way, your segment in the Edge was great.
Thanks
Dan

Atlcamel wrote:

Is there a similar site like coastal-funding.com, that you know of, which doesn't take long in sending you the email with generated POF letter attached? I am having trouble (in others words "This page cannot be found") generating a POF letter from Coastal-Funding, which I need right at this moment, to get this offer of mines resubmitted and sign off by the lender. Thanks in advance.

There are other hard money lenders in your own area that you could search for. This would actually be my own suggestions. The reason is that you may find local, private hard money lenders to be cheaper and easier to use.

If you continue with coastal-funding I would suggest getting one of their proof of funds letter then saving the letter to Microsoft Word. This way you can always print a proof of funds out any time you would like. Some may think this is a bad idea but coastal-funding allows you to create proof of funds on their website at any amount all you are doing is creating the same proof of funds on your own computer.

I will quote you the earnest money clause example from Deans Profit from Real Estate right now book to clarify my question.
" In the Earnest Money Clause, It will state that you, the purchaser agrees to put up a cretin amount of earnest money (good faith deposit) at the time of signing this agreement for now write zero in the blank."

The book goes on to say, "Next, fill in the blank for "additional earnest money"

I guess I am not clear on what additional earnest money is, and my original question was how do sellers feel about you putting 0 in the first earnest money part of the contract. I understand this part of the contract is nonrefundable money if the deal does not close, so that is why I asked if putting some small amount instead of 0 would help close the deal with the sellers.

Thanks for your help

Jim

I have been in contact with HMLs in my area but unfortunately I don't have the reserve funds available to make sure a rehab project would be completed on time in a timely manner plus the funding costs. The other private lender I have to have a purchase agreement already executed between myself and lender before they will even consider working with me. Plus I will be occupying the dwelling so either lenders will not loan on owner occupant resident. I did use ole faithful Google and came across another HML lender to generate a POF letter and saved it to Google Docs for future use.

nstreet wrote:

Atlcamel wrote:

Is there a similar site like coastal-funding.com, that you know of, which doesn't take long in sending you the email with generated POF letter attached? I am having trouble (in others words "This page cannot be found") generating a POF letter from Coastal-Funding, which I need right at this moment, to get this offer of mines resubmitted and sign off by the lender. Thanks in advance.

There are other hard money lenders in your own area that you could search for. This would actually be my own suggestions. The reason is that you may find local, private hard money lenders to be cheaper and easier to use.

If you continue with coastal-funding I would suggest getting one of their proof of funds letter then saving the letter to Microsoft Word. This way you can always print a proof of funds out any time you would like. Some may think this is a bad idea but coastal-funding allows you to create proof of funds on their website at any amount all you are doing is creating the same proof of funds on your own computer.

I am looking for a plain language discussion on Chapter 8 qualified properties. Today With the lessons from Deans books and his Success Acadamy I signed my first two offers. One of these was a Chapter 8 project, and I can't find much in the way of good advice.

Hey guys, I recently met a contractor who has agreed to do my rehabs and after the house is sold I can pay him. I have a real estate agent-investor herself, not much experience though. I found a lender that will lend all cost to make the deal happen at about 1% interest rate and if I need 100% financing then when I sell the lender wants 50% or to make at least $20,000 per deal. I also have buyers, one has a loan for about $200,000 for a single that she can fix and live in. OK now here are my questions;

I do not have money for money down or ernest money, I have no money whatsoever. How or what can I do? I try bird-dogging but,I could not find anything...I dont know how to find deals period, I do use the MLS but unless its a reo, I will not know if the seller would be flexible or agree to rastically slash the price.

I just don't know how to know if sellers are motivated-I mean yes I should submit offers and see what happends but we are talking about homes that are 90,000 and up in good neighborhoods-yes they have been in the market for a lonngg time but, I am just skeptical about sellers accepting 60,000 for a home that is worth 135,000. When I go to websites like Homevestors.com I notice that the houses they have are either in a not so good neighborhood or it needs ALOT of rehabbing.

Should I just make offers anyway-not pay attention to the listing price?
Also, the contractor that I am working with is bringing me buyers but what should I do about showing them the properties? I dont want to have 5 houses under contract and then have no buyers because they dont like something or the other but yet how akward to bring the buyer, contractor and have the realtor show ALL OF US the property, for that they just talk to the realtor. I need advice....

Hello, I'm sorry to bother you, I just have a quick question (kind of). I am going to make an offer tomorrow to lock a house up under contract then offer it to an investor Wednesday at an investor meeting. I have a realtor and so does the owner of the house I will be making an offer on. To do an assignment do I need my own contract or do I use my realtors contract and put the and/or assigns next to my name and write in an exit clause (i.e. pending partner's approval)? Also, if it is accepted and my investors also accepts then what next? There are other contracts that have to be signed, right? Do I go to closing and will my realtor still be involved once my investor accepts? This is my first offer, I'm a little nervous that I will do something wrong in the paperwork department. I have read the book and watched the Edge seminar and am very excited and if the offer is accepted I know my investor will jump on it. Thank you for your time, I really appreciate it. -Amanda

Here are two websites with a lot of information just for section 8 rentals.

www.affordablehousingonline.com

www.housinglink.org

I hope this helps.

Putting 0 (zero) as earnest money will defeat earnest money. The purpose of earnest money is to bind the contract - this is the real reason for earnest money however, some Realtors have started to teach that earnest is used to show intent to purchase - slightly true but not the real purpose. If you put zero for earnest you have nothing that binds you or the seller to the contract. In a sense the seller could sell the property to someone else and claim that you never had a "contract" because you had no earnest. It would be up to decide if there was indeed a "contract". Always put earnest, whether it is money or something else with value.

I would venture to say that most of your hard money lenders have been found from the internet. I make this statement because you state that you need reserve funds?? What are reserve funds (I know what reserve funds are but have never needed them)? The truth is the easiest ways to find hard money lenders are the worst ways. The internet, mortgage brokers, and many Realtors will give poor contacts to hard money lender. The way I suggest is to go to the courthouse. It will take more time to find the foreclosure auction, find the time to get to the auction and you have to be brave when talking to an investor but this will yield, in my opinion, the best hard money lenders. Other notable ways are researching courthouse records and going to investment clubs.