jimi hendricks
Active 3 months agoForum Replies Created
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Bill –
I agree with your approach to focus on the strengthening disclosures and pointing out specific aberations, over the re-writing of aged techniques.
Otherwise you’ll end up on the treadmill of revising/editing the materials each time the taxman/lawman switches where to bite.“That said, the creative deal structuring tools and the techniques Jack used to negotiate with sellers are as effective today as they were when he wrote each of his courses.”
100%. In my humble opinion – preserving the original material is essential. Like you, I hear Jack’s voice as I re-read these. The point is absorbing the creative genius that is Jack Miller and making it your own, not robotically copying word for word techniques from a bygone era.
Hi William –
“She is potentially into it; she just needs me to start the conversation.”
This is the key. You don’t want to go in with a firm deal structure in mind until you’ve LISTENED to her.
I like that you’ve found a property that has $1,000 + upside per month after a little elbow grease.
Perhaps she is interested in receiving the same monthly income (approx. $1550) without all the burdens of ownership and tenants?
Perhaps you can make her aware of the benefits of an installment sale tax treatment ? (She can talk to her accountant about IRS Pub 537)
I wouldn’t assume a 10-yr call since she is 76 … I’m still paying on a note to a 92 yr old lady (she’s sharp as a tack).
Does she have children and an estate plan ?
Why does she want out of this house ?
Ask questions … and then brainstorm multiple structures that seem consistent with her goals.
Most importantly … Then Make A Written Offer, and present it to her.
Listen to her feedback, and adjust the offer accordingly.Knowing what inflation will do to the purchasing power of the dollar, I think Jack would be buying on fixed rate owner financing and selling on an indexed Adjustable Rate loan, as he did in the late 70’s. That way, if this inflation is durable, rather than “transitory”, the rate would rise to reduce the impacts of currency destruction.
This is great news! Bill and Kim are genuine Millerites carrying the proverbial torch forward. And they walk the talk (and keep the torch lit), active investors in the trenches (in this case a 5-mile radius). Who else makes 1,000 offers a year? Best part, them’s good people. Their hearts may be too damn big for their own good, but that’s how they roll!
Wow, you have to train your own proctologist?
Tell the guy to look at Section 1921 … while it pertains specifically to “stock” options, there’s a supporting publication (that I can’t find) that says unless specifically excluded, this is how options should be treated.
In section 1921 ” Writers of Stock Options (That’s you) If a taxpayer writes a call or put, the amount received is not included in income at the time of receipt.” Instead it is deferred until 1) the obligation expires, 2) the option is exercised or 3) the writer engages in a closing transaction.”
There’s more detail there, but ask the bureaucrat why a property option would be treated any differently.
Call or email me if you want to discuss further.
Best to you!
Hard to find opportunity in deals with ZERO equity, particularly if the seller is unwilling to fund a negative cash flow or provide you a lump sum to takeover the payments. You could approach the bank for a short-sale but since this is non-owner-occupied, it’s an uphill negotiation. I’d move on, way to skinny!
Yes of course.
Buy @ 50 – 70 cents on the dollar and sell it 2 years later at 90% of retail market value. Rinse and repeat.
Buy a fixer, live in it while renovating. Sell in 2 years.
Don’t count on market appreciation, count on buying at a discount price that ensures a resale with a tidy profit.We did this successfully for years. Unfortunately, we built a house on a great lot that we got dirt cheap… after two years I was ready to sell, the wife fell in love with the house (and her gal pal neighbors) …. five years later, guess where I’m still living and wasting perfectly good tax-free equity capital?
Repayment of a Reverse Mortgage (HECM) occurs when the borrower (or last surviving spouse) permanently vacates the home. The borrower or borrowers heirs then must facilitate the payback of the loan using either private funds or selling the house. After the loan is paid, all leftover proceeds from the sale of the home go to the borrower or the estate.
All reverse mortgages are non-recourse – the total amount owed can never exceed the appraised value of the home. If the amount owed exceeds the homes appraised value, then the lender or FHA will absorb the loss.
Based on the numbers provided, I’d say the deal is way to thin for a complicated deal. You’d need the new appraisal to come in at well under $150k.
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In both cases it comes down to the specific language in each contract/lease. In general, you want the contract language between you and the owner to be very loose/pro-tenant and the language in the contract between you and the subtenant to be very tight/pro-landlord.
So, in the contract with the owner you may have:
Pets: Permission has been granted by the owner for any animals to be allowed on the premises.
But in your contract with the sub-tenant:
Pets: Permission must be obtained, in writing, in advance from the manager for any animals to be allowed on the premises. If tenants have pets, they must be listed and by listing them Tenant agrees to be fully liable for damages and injuries they might cause to both people and property.
Permission has been given for the pets listed below:
Name: Kiko Type: DogA non-refundable pet deposit of $x has been received. Additional monthly rent of $Y will be charged
As for potentially selling the house to the tenant and keeping a spread, we use a First Right of Refual clause in our contract with the Owner:
Landlord, as an inducement for Master Tenant to lease the property, hereby grants to Master Tenant a first right of refusla option to purchase the leased property for x% of any sales price the Landlord agrees to with any current or prior Occupant Tenant. This first right of refusal option shall extend for 90 days after this lease is terminated. Master Tenant may either elect to close on the transaction or sell the option back to the landlord for x% of the sales price realized. Landlord further agrees to exclude Master Tenant and or assigns from any listing contract entered into while this lease is in effect or within 90 days of its termination.
