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Short Term Flips in California

Home Forums General EHTrust/EHT Topics and Creative Real Estate Financing Short Term Flips in California

This topic contains 59 replies, has 0 voices, and was last updated by Avatar of areyes areyes 10 years, 9 months ago.

Viewing 15 posts - 1 through 15 (of 61 total)
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  • #5441
    Avatar of areyes
    areyes
    Member

    Since California is mainly known for short sales/REO’s I would think the short term flip would work extremely well here.

    Just find buyers with $2,500 and who can qualify for conventional financing would make them great candidates. Then find sellers who are behind on payments and willing to let the property go and let REAP do the rest.

    Yes or yes?

    #28395
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @areyes wrote:

    Since California is mainly known for short sales/REO’s I would think the short term flip would work extremely well here.

    Just find buyers with $2,500 and who can qualify for conventional financing would make them great candidates. Then find sellers who are behind on payments and willing to let the property go and let REAP do the rest.

    Yes or yes?

    First of all let’s change some verbage here. We do not do short term flips. In fact, there is no “flipping” at all. There is only a sale of our trust property. One sale, one close, no flip. So please eliminate the term Flip from your vocabulary.

    Second; In order for our Short Term EHTrust (not flip) method to work, the seller must be willing to walk away from some equity. At least enough to sell to and assign the beneficiary who is going to have the right to purchase. IOW, there must be a big enough spread between what the Seller/Settlor is willing to take for the place and what the Appraised Value and Purchase Price to the End Buyer is going to be.

    Third; The End Buyer’s Lender must accept the source of the funds used for the down. Some will, some may not. CAPP makes a contribution to the trust to “purchase” the End Buyers “Personal and Equitable Interest” in the trust. The sale of “Personal Property” (i.e. Equity Interest) is considered as a valid source of funds. Again, some will allow it, some may not. Some may require that the funds are held in escrow for 30 to 90 days, some may not. We advise the Buyer to have their Loan Officer locate a lender who will accept the souce and has the least amount of time for seasoning of those funds, if any time at all.

    Here’s an example of one I’m working on right now. In fact it just came in as I was typing this post.

    Another investor called me this because they couldn’t close it using the Guru’s Method they purchased at a seminar last month. The Title Company and Lender won’t allow it. The Buyer has qualified for a 90% loan with 10% ($34,700) down but doesn’t have it now.

    Property currently valued at $347,000. The seller is willing to take $217,000. BTW, if we had this under contract via an NEO, our marketing would look something like this…

    As Little as $2500… Moves You In!
    Up to 100% Financing Available
    Seller may assist with down and closing costs
    $347k, 4+3, 3200 Sqft, (location)
    Scott: 801-###-#### 24hrs.

    Purchase: $347,000
    Seller: $215,000
    Bal: $130,000 Available to disburse

    Costs: $38,170 CAPP ($34,700 for down plus 10%)
    $ 3,470 NARS 1% Facilition Fee

    Net Profit: $88,360

    The Investor has agreed to giving us a 10% Beneficiary Interest in the Trust’s NET Profits and Proceeds. In this example that would be $8,836.

    Our total profits would be $8,836 plus our discount on the NARS Facilitation Fee or another $1,735 for a total of $10,571.

    #28396
    Avatar of areyes
    areyes
    Member

    Makes total sense

    What was the underlying loan balance?

    If it was a short sale/short payoff and the loan balance was $400,000, the numbers would still be the same if the lender accepted $217,000?

    #28397
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @areyes wrote:

    If it was a short sale/short payoff and the loan balance was $400,000, the numbers would still be the same if the lender accepted $217,000?

    The numbers may only be a few thousand different for cost of cash for the payoff, typically only 1 to 2 points for that kind of thing.

    #28398
    Avatar of areyes
    areyes
    Member

    This is the one where you have a private investor use the funds to payoff the note, holds the note as a co-beneficiary and the end buyers lender cashing out the note?

    #28399
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @areyes wrote:

    This is the one where you have a private investor use the funds to payoff the note, holds the note as a co-beneficiary and the end buyers lender cashing out the note?

    Sure

    #28400
    Avatar of socalgal
    socalgal
    Participant

    What Scott and his fellow NARSians fail to acknowledge is that lender underwriting guidelines aren’t static. They change–sometimes dramatically so–depending on the performance of loans funded in accordance with those guidelines. Regardless of what passed muster in the past, at this time, land trusts of any type are increasingly red-flagged as devices specifically designed to circumvent seller title seasoning and, to a lesser extent, the due on sale clause. Since seller title seasoning and the DOSC are exactly the obstacles that a land trust is, in fact, specifically designed to circumvent, is it any surprise that lenders have finally figured this out?

    Y’all act like lenders and title companies are stoopid; that is, if enough smoke is blown at them, they won’t notice that certain documents were created to “legalize” that which lenders specifically disallow: assigning current appraised value to a property bought for X and immediately sold for Y without any true value added between X and Y except that which occurs between the ears of NARSians.

    Whether you use the word “flip,” “flop” or “floop,” lenders are increasingly perceiving, “Reconveyed in January via recorded trust, sold in February…what the fu–?! Declined.” When this occurs during the transaction at the last minute, there are a whole lot of participants who are mightily disappointed. Anyone engaging in–(being careful for Scott’s sake not to use the word flip)–”short term property transference” would do well to consider using flash funding, fully disclose to all parties, and be done with it. An expensive NARS trust won’t save your deal.

    #28401
    Avatar of mtnwizard49
    mtnwizard49
    Member

    You would do well to get a life and stop posting the same crap over and over. You are a broker who pushes “flash funding”. Go push it somewhere else. Your agenda is showing. We all know that you know NOTHING about NARS or how a NARS transaction actually works. Don’t let the door hit you.

    Just so others see I’m not exaggerating about your tunnel vision, here are a few of your recent quotes:

    1. If you were to fight for your rights under “(D) Special rules for estates and trusts,” I believe you would lose. At the very least, you would be tagged for an audit–perhaps several audits.

    2. This of course comes from the crooked investors out there. It comes from parties who are trying to circumvent title seasoning requirements, which is just what NARS tries (tried) to do.”

    3. If, after posting the facts (lenders’ guidelines), not some papered over sales pitch, I’m wrong, I’d like to know how I’ve misunderstood the purpose of NARS Trusts. I’ve still got six grand into a NARS membership but I’m feeling pretty gullible about now, aren’t you?

    4. It comes from parties who are trying to circumvent title seasoning requirements, which is just what NARS tries (tried) to do.

    Finally:

    5. Very gracious of you, Scott, and, yes, I have agreed not to post–at least not about this subject–because many are exasperated by now.

    ATTENTION SCOTT AND JOE CAIN: You guys have no problem deleting or moderating my comments. I’ve been a member and posting here for almost 10 years and nobody has been allowed the ridiculous leeway this person has been shown. She violated her promise not to post on the same subject again.

    As we used to say: “The whole world is watching.”

    – Edited by Moderator

    #28402
    Avatar of socalgal
    socalgal
    Participant

    Actually, mtnwizard, quite a few of my posts have been deleted. It’s difficult to tell what triggers this.

    – edited by Moderator

    #28403
    Avatar of homesavers
    NULL
    Member

    SoCalGal what is your agenda? I appreciate your honesty and how you feel about paying to become a NARS member. The NARS EHT method was designed for long term hold. Scott has redesigned the method for the short term deal since that is what the market is allowing right now. This is my opinion so you can take it with a grain of salt.
    However, I am trying to understand what your point is here in this forum. Are you saying an Non-Owner Occupant buyer cannot make a profit on the short term sale of a property? As long as you follow the law and play by all the rules underwriters have set before you- what is the problem? When you try to “circumvent” and obfuscate your methods then you had better have a good attorney that you can call at any moment when you are served your summons.
    I can only speak for myself but we are here to do business in an honest and ethical way. My conscience demands it and my God commands it.

    #28404
    Avatar of neftalipazo
    neftalipazo
    Member

    Scott,

    Please, please, please, have Jeff create a members only discussion page. There SoCalGal and all of us can discuss these matters without exposing it to potential customers.

    It’s been almost a year since my first request with promises that it is coming but I’m still waiting. Like I said in one of my posts, if Jeff is too busy hire homesavers for a week or two and I’m pretty sure he will get it done.

    I have been a Computer Scientist for well over 15 years and creating such a page DOES NOT TAKE THAT LONG, unless nothing is been done about it.

    Sorry.

    You may delete this comment as you please.

    Thanks.

    #28405
    Avatar of areyes
    areyes
    Member

    I had a phpBB board before and it’s pretty simple to add a members only section area. It’s just permissions with a click of a check box.

    #28406
    Avatar of mtnwizard49
    mtnwizard49
    Member

    We’ve had a lot of promises about website improvement for the past several years. It’s a fantasy.

    #28407
    Avatar of homesavers
    NULL
    Member

    @NeftaliPazo wrote:

    hire homesavers for a week or two and I’m pretty sure he will get it done.

    Thanks for the confidence in my abilities to create a member’s only forum. For some reason they are not interested to doing this.

    #28408
    Avatar of joecain
    joecain
    Member

    To all who posted on this string just since last night -

    First of all, I must have missed the memo that allows you people to believe that you are able to continue to engage in name calling, whining and Bill-bashing on his web site. I encourage you all to consider the possibility of being civil and respectful. That is, please be so to Bill, to NARS, and to each other.

    Second, it is indeed true that several recent posts have either been deleted or edited by the moderators of this Board, including me. Editing other parties written content on a public Discussion Board Forum is a rather distasteful action and one that I have been rather reluctant to engage in as an action step. But rest assured, I will continue to engage if and when the need arises. And, remember folks, that nothing deleted from this open forum ever really disappears completely.

    As for a private, Members-only section of this Forum, this will occur when, and if, Bill Gatten chooses to make it reality. There has been much conversation on the topic and, to the best of my knowledge, this is not a tech issue. This is a Company Policy item and only Bill changes Company Policy.

    Now, on to the most important point: SoCalGal has raised a concern that she has and attempted to back it up with numerous posts of factual content. From her point of view, it is rather obvious that she believes that difficulty is now present in generating and completing one of the said “short term property transference” transactions.

    Well, Henry Ford (yeah, THAT Henry Ford) had a great quote nearly one hundred years ago:

    “Whether you think you can, or whether you think you can’t, you’re right.”

    The NARS Equity Holding Trust, trademarked, System of Documentation was designed for long term acquisition of properties, and not for the quick-flip-types of deals that have been discussed and dissected over the last year or so. NARS is not telling you that these transaction may not have issues in closing on the sales transaction following the termination of the Trust. I have researched this matter as well and spoken to Escrow and Title people. I am not an expert on these transactions; however, I have a basic understanding of what seems to be involved.

    Bottom Line:

    Until or unless I hear from any single NARS Network Member involved in a “short term property transference”, whose traditional real estate sales transaction following the termination of a NARS equity holding title transfer transaction using Bill’s trademarked System of Documentation fails to Close for the end buyer, specifically because of our Documentation, continuing this conversation is an ineffective expenditure of time and energy.

    So, ENOUGH ALREADY !!

    So far, this whole four weeks of hundreds of posts on this topic boils down to the following:

    >> 1. One person, a NARS Network Member, claims to know exactly how to complete this specific type of transaction and has actually done so. Repeatedly. He thinks he can, and he’s right! (Fordism)

    >> 2. Another person, also a NARS Member, claims that she has tons of information that these specific transactions cannot be done, although she admits to never having attempted to do so. She thinks she can’t. And, guess what, she is right, too! (Fordism)

    Most of the rest of us, including me, are just interested bystanders. We are standing by waiting, watching, and sometimes offering our opinions and assistance, while the two parties above do battle like Godzilla and Mothra as Tokyo gets destroyed around them.

    Well, Henry Ford had a whole lot of really great quotes. Here is another:

    “Obstacles are those frightful things you see when you take your eyes off your goal.”

    Please folks, keep your eyes on your goals.

    Property held in an equity holding title transfer transaction by virtue of the NARS System of Documentation is still the best and safest vehicle for acquiring and protecting and holding that property around. These transactions, when engineered to last over one year, have been generated and completed successfully for nearly twenty years. That is what our System of Documentation is designed to accomplish. And, it works. It really works.

    Yeah, I get that times change, as do economies and laws, and NARS is certainly spending lots of time and energy to do the research in order to stay on the cutting edge and be compliant. Please be patient and allow Bill and the legal team to be complete.

    Thank you all for reading.

Viewing 15 posts - 1 through 15 (of 61 total)

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