Transferring Ownership II
To my frogger:
thanks for your response.
payoff is $63000.
To get current is $2250.
Interest rate is 10.5 due to bad credit to begin with
Payment is $750. with taxes and Ins.
FMV is $95000.
Do I go subject to existing loan because she wants to stay in the house so I can rent to her until I decide to sell. I realize I will have to put some money in to get current but I want to go as little as www.possible.Thanks for any input
8-)
tnote,
After 3 months of not getting payments from the borrower, lender may start a foreclosure process. To do that lender hires a Trustee, usually a law firm that will handle this process for the lender. The fee that you are refering to is probably the payment your lender had to pay to Trustee they hired. It is legal for them to request it from you.
Now as far as trasferring your deed to someone, yes you can definitely do that, and once you do that, lenders could still attach liens to the property, but you would not be responsible for them, because it is not your property any more. However you would still be responsible for the loans that you already have.
What is the reason that you want to transfer deed and leave your loans in place? Becase it seems that you still have time to sell it the "regular way".
By "creditors" I'm assuming you mean that you have unsecured debt and you're worried about creditors obtaining judgments. To create a lien, the creditor must first win a judgment and then record an Abstract of Judgment that becomes an involuntary general lien against any and all property in your name throughout the county where the abstract was recorded. These general liens do not attach to specific real property, so if the property is no longer in your name, these judgments will not attach.
However, unless you bring the home loan current, your lender will foreclose whether you are on title or not. The Trust Deed you signed secured your loan against your house, so whomever you transfer ownership to takes title subject to any and all existing liens and encumbrances. The only way to halt the foreclosure process is to make up the back payments plus fees and/or penalties.
Have you been in touch with the lender at all since you stopped paying them? Is your inability to pay going to be an ongoing condition?
If your inability to pay is only temporary and you're staying in touch with your lender there are usually multiple ways that you can stave off a foreclosure. Barring some kind of loss mitigation work out with your lender, filing bankruptcy would be a last ditch effort to save your home.
But if your inability to pay is long term then you need to sell your house as quickly as you can. Once the Notice of Default is recorded (you'll get a copy within a couple of weeks after recording) you have a minimum of 3 months and 3 weeks (111 days) before an auction of your home can take place. Make use of that time wisely.
I would not recommend doing an in depth research before contacting the homeowner. Usually preliminary research is sufficient, before you speak with the homeowner.
I am really surprised that no one was able to comment on the current, post disaster Florida market? :-?
June, I am surprised that no one has responded to your inquary. I have relatives in the Tampa area and he said it may be to early to tell. I also have relatives at Pensacola Beach and they consider it a way of life. Her house gets flooded out about ever 5-6 years. Have an uncle in Gulf Breeze (86 years old) says he is getting tired of driving to Ala. every time they have a hurricane. But, beach front property continues to hold it's value. Sold my beach front condo in 1992 for $89k wish I would have kept it now, its worth 4 times that much. Wish I had a crystal ball..LOL
Hi June,
I live in Davie (west of Ft Lauderdale) I was Cocoa yeaterday looking around with a local realtor. Even after hurricane Frances it remains a 'sellers market' prices are high, even for damaged properties. Even the 'Cash Buyers' are paying full price... it's weird to say the least. Approx 50% or better in the area still have no power but the real estate market is seemingly uneffected.
Regards,
MDH
I agree with Davese, what has happened though is a lot of people that depend on real estate as a living are having a tough time as lenders and insurance companies are making closings very hard. I have three deals that were supposed to close a month ago that are all still in the works due to these hurricanes. The prices are all still the same as far as I can see but people (like realtors) may be working harder than normal to try and get more deals lined up to compensate for the amount of time lost with no commissions.
I concentrate on low-moderate income areas as I am only pursuing cashflow at this point. I would not buy something for 80k that only brought in $800. From reading posts as well it seems like the prices are pretty crazy in most of California and my area is getting there as well, in fact where my primary residence is (Naples) it is very close to being there.
I believe we have a lower cost of living here too.
Well, crazy prices or not, many people here still do make TON of money. After all it's all, persistence, knowledge and determination do produce results, when it comes to game of numbers. And the RE is the game of numbers and cards. If you know how to play them, you'll win no meter what.
For example, one of my proteges got his RE license couple of years ago and this year alone he already made close to a cool million. Yes that's right, a million dollars selling commercial real estate with no to much of the real knowledge; I still consider him to be learning. From that example, I learned that spiking market has it's own keys and if you know how to play them, you'll be the one to laugh all away to the bank.
You sad" I would not buy something for 80k that only brought in $800." What you didn't say is what kind of ratio or the ROI are you looking for? I'll be glad to learn.
June
Don't get me wrong, just becuase prices are crazy I am positive people are making a ton of money like you said.
As I hold for cashflow the ROI is not my big thing. I do look at ROCI (return on cash invested) and the worst deal I have done is about a 44% ROCI. That would mean that if it cost me $10k with closing costs, down, etc, then within one year I would have $4400 of that back from positive cashflow. If a place was getting $800 a month, I would want to make at least $150 true positive cashflow (after facoring in vacancies, repairs, legal fees, advertising, taxes, insurance, mortgage, etc) AND I would run these numbers as if I was financing 100% of it as the money I would put down comes from home equity anyway. Soo, a quick calc would put me at not going higher than $65k for a place that made $800 a month (if they paid utils). And this would be with a 30yr fixed loan and a piggyback second with a higher rate possibly.
HTH
Ray Higdon
i live in charlotte county where hurricane charley came through. Realtors here are still seeing a boom and I am still selling at pre-hurricane prices and higher. I mainly deal in vacant lot wholesaling. I am also building a spec home and this seems to be a good time because the demand for housing is high due to 15000 houses/mobile home units made uninhabitable by Charley. New construction prices are increasing due to shortages of labor and supplies.
I think people are still going to consider the Florida coast for investment purposes, but they may buy lake homes in the North for the summer hurricane seasons?!?!? [ Edited by thechangingtable on Date 09/18/2004 ]
Our niche is Preforeclosures, so I cannot answer your question in a broad way.
Here's what we are seeing though.
-1- The response rate to our mailings has gone up dramatically, and we are purchasing more properties than usual
-2- Some closings on our sales (retail) are severely delayed due to the fact that buyers are having problems getting insurance when there's a hurricane in the box.
-3- Prices are holding up well for us and we're getting good turnouts at our open houses.
-4- There is no significant change (yet?) in the average number of days that our houses are on the market.
Now this is very much our situation, and I too am curious to know how some of the other Florida Investors are doing.
Hope this helps.
[addsig]
June,
Nice to meet you.
I have lived and invested in Florida for the last 4 years, with a few years of REI before that in Illinois.
As far as the contradictions you seem to get regarding the sunshine state, I'd say that is because many posters online from FL are from all over the state.
As with any state in the union, there are 'hot markets' and 'not-so-hot markets'.
There are houses in my particular farm area that would sell for almost 40% more, IF they were merely located near the coast, or a major metro area...........like Orlando.
I noticed you mention sub2 investors doing well here. Guess what?
Any investor with a solid plan of action, whether they buy sub2, or whatever (most use more than one method to purchase anyway) will do well in any market in the country.
The reason for this is simple.......there are motivated sellers everywhere.
Job loss, transfer, divorce, layoff, and a whole host of other life changing circumstances happen all the time all over the place.
These are the folks who financially and/or emotionally need to sell.
This is where we apply our trade........solving those folks problems.
This can be done here in FL, just as it is done in the other 49 states.
I will give you this though, FL has a LARGE transient population.
I have seen a great number of people moving in and out of our state.
I really enjoy those from 'up north', because frankly, they make more money there, so they are DELIGHTED at the lower monthly payments we have here. (easier to sell to)
I'll give you an example:
I have a 3/2 house for sale now.
In Illinois this same house would have sold for $150k, here in my local area, I'm asking $80k.
IF this same house were in Tampa, Orlando, or coastal, then it would be worth more.
In other words, know the market you work, and money can be made.
Sure, higher dollar amounts are made in some areas, because property values are higher.
Cost of living is different as well, so its all relative.
Bottom line, there is opportunity in all places, it's just our job to position ourselves in such a way that we can catch it when it comes around.
Does this make any sense?
By the way, I'd say in most of our state, the job market is slower than other places, with lower pay.......again though, depends on the area of the state.
You cannot gauge an entire state based on one local area/market, because they simply vary too much.
Heck, when I was in Illinois, the main town I worked, the property values were 20% different, depending on what side of town you were in.....crazy.
Take care,
Jim FL
Quote:
On 2004-09-17 14:10, JuneSmith wrote:
Thank you guys all for sharing your opinion. I like the tropical beauty aspect of your great state •Florida, however, since I I've been established in rental and development business here for over 15 years and I do not plan to move anywhere where 1) the humidity is over 100% most of the time and 2) mosquitos and crocodiles are considered pets, I would not be your competitor any time soon ..LOL
I am curious because I had some younger friends who lived here for a while but then decided to go back to Florida after being out-priced in LA. Surprisingly, they do not seem to want to come back claiming there are more jobs over there and the prices are still cheep. For example, one bought a condo for $80K and rented it for $800.00. That gave him a cash flow of couple of hundred and that I call ... small but still good.
The reason I was also curious is because reading back the older posts on TCI I found that there a still a lot of "subject 2" guys down there who seemingly continue to do very well. Based on what you are telling and on what they say, I am trying to understand what's going on over there and why there is so much contradiction coming form that state? Why some complain it's a seller's market while some others are still lining up some no money deals?
I appreciate your impute but what I think is that "option buying is limited to a rural and perhaps those who practice such buying do not look for their "home runs" & "slam dunks" in coastal arias where the retail buyers and their backup offers are piled up. Perhaps, their efforts are focused more towards the inland "junkers", around Orlando aria, where Ron Le Grand and other "course masters" supposedly made their wealth.
<font size=-1>[ Edited by JuneSmith on Date 09/17/2004 ]</font>
[addsig]
Let's see:
- 5-6 hurricanes impacting Florida to some degree before the hurricane season even got officially started this year
- meterological predictions of global warming effects leading to similar increased hurricane activity for the next 10-15 years
- hundreds of thousands of frustrated people who've been asked to evaculate their homes three times in one month
- increased vacancy rates for the last year
- rents kept low by many older owners who have paid off their mortgages
- and new properties selling at booming prices that create marginal or negative cashflow.
You really think the boom is going to continue?? Haven't we been taught repeatedly that Mother Nature always wins?
Marlene,
The moving truck, well, I own one of those, so no real expense there for now, since its paid for.
I agree, many folks will stay away from Florida, and many others will move away from Florida, from the Hurricane scare.
Especially after this season.
I live here, and was just now notified by my lovely spouse that she will be purchasing hurricane supplies tonight, to re-stock.
Why?
Because they are now predicting yet another hurricane hitting our state, and ripping up the middle, right over my head.............again.
We've been hit twice already, and thankfully missed out on Ivans mess.
Lot's of rain, with land that is wet all over, even places that have been DRY for years.
However, this happens, and goes in cycles.
I've lived here for a mere 4 years or so.
Not long enough to know personally, but my friends and associates who are natives here, have seen this happen before.
For me, it presents opportunity.
Those folks from 'up north' who want to move here.......not all will change their minds because of hurricanes, right now anyway.
Later, after hurricane season, and things calm down some, buyers will be back in DROVES.
Those of us who market heavy, all the time, whether in hurricane season or not, will undoubtedly stock up our inventory, and be ready when a major influx of buyers return.
Especially when we have nice houses, in good shape, that withstood all these storms and hurricanes.
There are always buyers for good deals, and even more so when the weather most of the time is really nice.
This hurricane season scare, and the brunt of the storms are not going to last forever.
They will create a nice flow of motivated sellers though.
I met one yesterday, a nice house with 'hurricane damage'.
The house needed a new roof prior to the storm, and the hurricane just made that something needing done sooner.
The seller filed a claim, BUT, cannot both make his payments, and cover his 2% deductible to repair the roof.
He barely makes the house payments, and needs relief.
Guess what?
I'm buying it.
I'll pay the difference between the insurance check and the roofers final bill.
It will be smaller for me, because we'll use my roofing contractor.
The seller gets out, while I pay for a moving truck, and cover the security deposit on his new rental unit.
(He was going to have to pay $1k, but the new landlord is a buddy of mine, so it went down to $500, since i'm paying it.
So, for about $4k total, I'm getting a house, with a loan on it for $132k, with a value of about $210k.......after we clean, and fix the roof.
Nothing else is needed on the house, the seller got a great deal when he bought, but could not maintain the payments to keep his good deal.
I've had quite a few seller calls lately with roughly the same scenario.
For me, hurricanes are increasing business, and yes, houses are selling better too.
Plenty of MH dwellers out there want to move into them.........again, because of the hurricanes.
I see this as helping our economy here in the long and short run.
All that insurance/fema money will be spent in our areas, and this HAS to be a good thing.
The key in my opinion, is to position yourself well to take advantage of the large cash influx coming to Florida.
And gators and humidity.......mosquitos the size of birds, love bugs, and those lovely wild cockroaches (I know, natives here call them something else), they don't scare folks away from Florida, because over all, the weather here does kick rear.
I plan to keep buying properties here for some time.
Take care,
Jim FL
Quote:
On 2004-09-23 13:37, MarleneM wrote:
Let's see:
- 5-6 hurricanes impacting Florida to some degree before the hurricane season even got officially started this year
- meterological predictions of global warming effects leading to similar increased hurricane activity for the next 10-15 years
- hundreds of thousands of frustrated people who've been asked to evaculate their homes three times in one month
- increased vacancy rates for the last year
- rents kept low by many older owners who have paid off their mortgages
- and new properties selling at booming prices that create marginal or negative cashflow.
You really think the boom is going to continue?? Haven't we been taught repeatedly that Mother Nature always wins?
Dear Marlene,
I think the above poster really have the good point. If you market your services well, someone will always call to eventually conform to your investment wants and needs.
As the ridiculous prices are beginning to calm down, I am doing the same thing only with the rental units instead of SFR-s and I can tell you, the number of calls are increasing week after week...
Good job Jim! Please let us know if you run across any other hurricane related deal. We love to read about the successes of our peers. [ Edited by JuneSmith on Date 09/24/2004 ]
Great post JimFL
i've heard that 43% of builders are facing cement shortages. this was before 4 hurricanes. hows the scenario look now???
Hoe are things looking this week?
I read a Florida newspaper article that claimed insurance companies have decided to NOT offer hurricane insurance to home owners who bought after June 20th, 2004.
Is that true?
The Office of insurance and regulation outlawed this, in fact, if your policy was CANCELED during this hurricane period, the FL insurance companies are still unable to not honor your claim. I work in IT for an insurance company.
Go here to read more
http://www.fldfs.com/companies/
i have a daughter that lives in st. petersburg as a re agent. she says over all no major effect on the market. except the days that the "H" comes through town then she stays home.
........km[ Edited by kenmax on Date 09/28/2004 ]
According to CNBC last week, estimated 2000 souls a day moving to the Sunshine State, any wonder why values are remaining high?[ Edited by CQQL on Date 09/29/2004 ]
June,
You asked:
" Please let us know if you run across any other hurricane related deal. We love to read about the successes of our peers."
Well, three hurricanes have hit my county, and other investors are flooding the area with signs, flyers etc.
Me, I'm getting calls from sellers who have seen my materials out for years.
No changing my marketing up, other than to perhaps increase its volume over time.........which I'd do whether we had storms or not.
My first 'hurricane related deal' is getting signed this week.
Got a call from a seller, owns two houses.
He had damage on his personal residence from Charlie, lots of damage, and a HUGE deductible to pay.
He did, but this meant coming out of pocket, and not enabling the seller to make payments on his empty renal unit.
The seller wanted to know BEFORE Jeanne hit whether I'd buy both houses or not.
I agreed to 'look them over', but made it clear, NOTHING would take place until AFTER the storm had passed.
Sure enough, Monday, we meet to talk, and now, his residence is a total loss.
A two story with no second story, and a torn up first floor. (Jeanne was NOT nice to this man.)
Looks more like a tornado hit the house than hurricane winds, which is possible.
So, the seller and I will discuss the residence AFTER insurance is worked out.
He wants to take his cash, pay off loans, pocket the difference and run.
Maybe a rehab waiting there, a REALLY BIG rehab, but for a few bucks, worth looking into.
I'll offer to buy it for the land value, maybe a little less.
The rental unit, here's the story there.
Seller has his old residence completly remodeled after a refi 2 years ago.
New roof, plumbing, electric, heat/A.C., doors, paint, carpet, tile, appliances, etc.
Basically, all new.
BUT, this seller cannot landlord.
Over 14 months time, he collected ZERO rent, and had 3 tenants.
He let them all move in, with a promise to pay rent and deposit AFTER they took possession.
No suprise, but not one paid, and all three were evicted.
The seller is so burned out, he's two payments behind, and has not even cleaned out the tenants left over things.
So, I offered this:
Take title, clean it, and sell it via L/O or AFD.
Backpayments/arrears plus clean up should be less than $3k, but I'll use that number to be conservative.
The value of the home is about $110k-$115k............closer to the $115k, when cleaned.
Here is the real funny part.
the last storm, knocked a tree down in the yard, no damage to the house.
The insurance on the house is going to issue the seller a check to remove the tree.
The seller is signing that to me, by giving me POA, and having the insurance company mail the check to my biz address.
Loan balance on the house, $78k.
Payments, :$650 PITI
Market rent: $850/mo
So, it will sell with between $5k-$6k down, since it will be a looker once cleaned.
I'll pay out the $3k from that, PLUS get approx. $2200 from insurance.
Deal breaks down like this:
Buy for $79k sub2
Pay $3k to make it work
Sell for $115k, collecting $5k-$6k upfront.
Rent: $977/month (yes, I'll get it, this will be for a chance to own, not rent.......worst case, we drop the monthly and make a little less cashflow.)
So, upfront profit: $5k-$3k +$2200= $4200 to me. (I have some buyers waiting to see it, so I expect short hold time, perhaps a week, maybe two.)
Cashflow from Rent: $977-$650 = $327
Backend: $115k - $5k - $79k = $31k (minus closing costs, but should adjust slightly with a lower payoff later.)
And YES, I see I'm going to charge $977 for rent when market rent is $850.
That is for RENT though, and with me, the T/B'ers get an option to buy.........which is they cannot get a loan, I'll seller finance after 2 years of ontime payments, and perhaps more cash into the deal.............provided they perform.
So, that's hurricane deal one, and we still don't even have power to 100% of our area, with schools out, and gas shortages all over.
I cannot wait until things get moving again, looks to be a fun time ahead.
Take care,
Jim FL
[addsig]
Yes, a fun time unless a yet another hurricane passes buy and turn the nice project you bought into yet another peace of unimproved land. The scenario in which you want be behind anyway since you can always put on a prefab in couple of months and sell it again. Good job Jim!
I have lived here for 25 years and I do not see the boom abating. Florida is a growing state with a lot of great land. Where I live I meet a lot of folks from up North complaining about the low pay - yet they stay because they can buy a great house for say $200,000 when a similar house would run 2-3 times as much in New York.
As more folks get tired of the pace of life in other places Florida will grow - regardless of hurricanes.
Hello all ! I'm from Brevard County, FL (central east coast). I have been investing locally for 4 years and I continue daily searching for my next beachside deal. I have been evacuated twice from my beachside home and experienced Frances & Jeanne fury. ( Charley and Ivan stopped by too but with nothing worse than our usual thunderstorms. I have 2 rentals beachside and sustained only minor damage (fences, soffits, a few roof shingles) and was just able to close on another beachside property that sustained a small tree down. Closing was delayed because of course insurance was not underwriting.
The biggest thing noted in these storms is that the properties that have not been cared for sustained the most damage. Lets face it, a roof's life is 15 years, it may not leak after 20 but it also will not survive 100 mile /hr winds which is what Jeanne did to Brevard. We closed on this property on Friday and had a tenant Monday . The phone was ringing off the hook because their are so many people looking for a place to live.
One person told us that her landlord was getting mad at her because she hadn't paid rent for October: She had not been able to live in the house for 6 weeks because of roof damage, all the carpets had to be pulled out, etc. Bottom line, there are a lot of landlords that do not take care of thier properties and sustained a lot of damage from these storms. Now they wonder where the rent is.......... not my style.
As far as the market.... after hurricanes
Its a great rental market for sure
median sales price has increased 20% in the last year ( in my area).........
prices for beachside homes are still up there as if the hurricanes never happened.
I have a deal on an ocean front condo that I'm still going ahead with even though Jeanne took out a 150 ft long 20 foot high concrete seawall......yes... took it out.... because in 9-12 months when everything is pretty again I will be able to sell this condo for 100K more than I'm paying for it now.
Alot of investors look only at cashflow. But for now, in my area, appreciation is the game........With the right note (even neg amm) and 2 yr buy and hold plan it would take a lot more than few a hurricanes to make me leave this paradise!!!!
I am building two homes here in SW Florida. Since I signed up to build them (both in August), one builder has increased his sales price by $11,000 and the other by $10,500. In one months time and with 4 hurricanes hitting the area (Charley hit directly here). The demand is high for NEW construction and there are supply and labor problems here = price increases. Its crazy!