Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › wholesaling REO’s using a land trust
October 9, 2008 at 8:39 pm #27249
Sorry Scott … I wrote the above post before reading your response!
A couple of questions regarding your answer:
1. CAPP IS NOT A HARD OR PRIVATE MONEY LENDER. CAPP is a beneficiary that makes a Cash Contribution to the Trust.
Isn’t this symantics … CAPP is puting money into the transaction whether it be a “contribution” or loan for use utimately by the EB!
2. You/Us DO NOT negotiate with the bank to allow an EB to use Equity in the Trust.
3. Seasoning of Equity in a Trust is not even an issue.
True … but the seasoning of the EB’s Down payment is an issue!
4. The bank has nothing to do with CAPP or its “contribution” to a Trust.
It has nothing to do with CAPP but it does have to do with down payment source and seasoning it will accept for a loan!
. You are missing some key points and benefits of using an EHTrust to facilitate the transaction. These Key Points are not something I wish to discuss on a public forum, even amoung fellow NARS Members. Just like Bill says, “this is not magic, it is just that we know something that you don’t”. As the Magician of this method, I don’t wish to devulge the secret. Therefore, if you want to do deals such as these, REAP will be your Partner/Co-Beneficiary and will perform it for you for the benefit of us all.
We are all anxiously awaiting your cost factors in a transaction … not your “secrets” which you admittedly said was stumbled upon by mistake in a previous posting!
Jerry CareyOctober 9, 2008 at 8:59 pm #27250
@Jerry Carey wrote:
We’ll have to wait ’till later this month when R.E.A.P. is officially announced and explained. I’m waiting to see how much R.E.A.P. will charge us and hope Scott and Dave R.E.A.P. us and not R.A.P.E. us! I also am waiting to see what interest rate CAPP wants as a hard money lender(HML)! I’m sure Scott will be fair … as he has always been in the past!
No need to wait, REAP has been official anounced and is ready to close your transactions now. REAP doesn’t “charge” anything. We are a co-beneficiary and will share in the profits as such. I also detest the reference to the term “rape” and take great offense to it. How is it rape to close a deal for you that you can’t do now without REAP? Half of something is better than zero of everything.
CAPP is CAPP and is and always has been 10 points. Which I might add is not something you have to pay for. All costs of using this process are those of the End Buyer. Everything you or REAP receive is FREE MONEY, NOT RAPE.
There is nothing further to “explain”. You either work with REAP or you don’t.
Using REAP is no different than using a Ground Partner that does virtually 100% of the work for ONLY HALF THE PROFITS… or less.October 9, 2008 at 9:24 pm #27251
Sorry you took such offense at what I said. I only used R.A.P.E. as an acronym because you use C.A.P.P. and R.E.A.P.! I did also say “I’m sure Scott will be fair … as he has always been in the past!”.
While I realize that R.E.A.P. doesn’t specifically charge a fee … you just take 50% of the profit as a Partner/Co-Beneficiary. This not exactly like a “Ground Partner” who finds an SB or RB to close a deal … your are simply handling the transaction parties and paperwork along with NARS. Also the CAPP fee of 10 points … is that 2.5% or 10% of the loan amount? I’m not sure which you are charging but there would be the cost of any HML whether we paid it or the EB paid it.
Jerry CareyOctober 9, 2008 at 9:49 pm #27252
Jerry, I’ll accept that as an apology and move on.
REAP’s percentage of profits or participation will be determined by your’s or anyone elses participation. The more work you do, the more you make. I only use 50% for illustration purposes. In most cases you will simply provide us with all the traditional documentation required of a NARS EHTrust and we take it from there. We either fully complete the offer and deal with all the parties or we share the duties to close the deal. The more you do, the less we participate.
Our goal is to have everyone of you doing deals, and on your own. When you need the REAP Process and CAPP, we will be there for you. You may get to a point where you don’t need us involved in the transaction at all until it comes to using CAPP, and that is fine too.
CAPP charges 10 points on the amount they need to contribute to the Trust. In the case of a Short Sale where CAPP is used to “payoff” the property, which is the full amount the lender wants, the fee will be much less, one because it is a large amount and two because they may also be making a contribution for the down too. CAPP may only charge a few points for Short Sale dollars and the 10 points for the down amount.October 9, 2008 at 10:25 pm #27253
so who’s negotiating the short sale or payoff?
can REAP handle the short sale negotiations and phone calls for those that have work during the day?October 9, 2008 at 10:49 pm #27254
so who’s negotiating the short sale or payoff?
can REAP handle the short sale negotiations and phone calls for those that have work during the day?
No, that is what your favorite Short Sale Realtor or Service is or, if you are not doing it yourself. Lots of times you will find deals that have already been negotitated but can’t close they way they want because they don’t have what you have… the NARS EHTrust, REAP and CAPP.
Now just insert yourself in the deal and with our help, make it happen.October 9, 2008 at 10:53 pm #27255
i got a referral from a seller who’s behind and i pitched a loan modification first and making a offer via NEO. then i found out she has a c21 agent negotiating a short sale. she’s interested in the EHT but id like to see if we can do the REAP with this one.October 9, 2008 at 10:57 pm #27256
Scott said in a post on pg 2 of this string:
Because you are going to be selling the property to your End Buyer for the FULL APPRAISED VALUE, not the listing price, which is usually the Short Sale price the Realtor has it listed for.
Because you have to create an Equity Spread, you can’t use the listed price as the price you sell to your End Buyer. There’s nothing left.
The way this all works is based on Real Full Appraised Value, not on a discounted price. You do not buy for 50% LTV and sell for 80% LTV. You sell for 100% LTV.
I know what you and others are thinking right now. How can YOU sell it at the Full Appraised Value if the Realtor couldn’t? That’s your secret and why the EHTrust/REAP method works.
Your End Buyer will come in with 10%, 15% or more down using CAPP. They may only finance 80%, but the sale price is the Full Appraised Value.
This of course has to be disclosed to the Lender and that is what other Investors, Realtors and Mortgage Brokers can’t figure out. We know exactly what to do and say to the lender to receive their blessings on these type of transactions using the EHTrust and CAPP.
It is this one piece of information that we know that other don’t. It is the reason NO ONE ELSE can do this but us. It is the reason you don’t see ANY OTHER Guru, Broker or Realtor offering what we do. I can’t beleive that no one has ever figured this out. This is like inventing the Frisby all over again. And what is really cool is that it is a function of the current EHTrust System which means that no one else could do it even if they knew.
I’ve even heard from other NARS Members and Mortgage Brokers that you can’t do it this way, that the Lenders won’t allow it or it is illegal.
Sorry Charlie, it is legal and the Lender knows it because we show them why. I even get calls from Investor/Lenders wanting to know if I can help their client/borrower move their property or they will have to foreclose.
The only thing that ever delays the deal, holds it up or stops it, is the borrower themselves. It is always the borrower having to meet conditions of the loan after we have talked to their Lender. Yes, because of what we do, some Lenders may require more conditions to be met which sometimes keeps the end buyer from closing the deal. So, you either get an End Buyer who can meet the conditions or you move your End Buyer to a property and loan they can meet the conditions.
So Scott … you are saying that by using REAP and CAPP the EB’s lender will accept using the higher appraisal FMV price and not a lower MLS listed price for property
Please affirm of clarify if you will!
Jerry CareyOctober 9, 2008 at 11:12 pm #27257
@Jerry Carey wrote:
So Scott … you are saying that by using REAP and CAPP the EB’s lender will accept using the higher appraisal FMV price and not a lower MLS listed price for property.
NO that is not what I’m saying or have ever said.
If the property has been or is listed, any Lender will not finance it for more than the listing price. If the property is listed or less than the full appraised value, I won’t even bother with it. I DO NOT mess with properties that are “listed” or have been listed within the last 90 to 180 days or less than Full Appraised Value.
That is why most of these listed Short Sale deals will not work. They CANNOT now or have been listed or less than full appraised value anytime in the last 90 to 180 days.October 9, 2008 at 11:20 pm #27258
They CANNOT now or have been listed or less than full appraised value anytime in the last 90 to 180 days.
What if the Seller accepts an offer that is <=70 LTV of the listing price? I assume you are just using the appraised value to get a higher equity spread?October 9, 2008 at 11:36 pm #27259
Scott and Homesavers (Don):
If the property is not listed … which is what is causing the problem of using Aprraisal/FMV … then what is the “Big Secret”
If you find any home which can be purchased at a 30%-40% discount from FMV … what stops you from doing a normal NARS NEHTrust flip scenario? What does REAP do that you can’t do yourself?
Have the seller set-up Trust (via NARS) and assign you (IB), HML, and End-Buyer (EB) as Co-beneficiaries. Use HML’s funds to to pay-off loan amount agreed to if a short sale, or if not a short sale … the HML can be eliminated all together by using the EB’s lender funding. EB qualifies for loan to purchase property from trust and the transaction closes! Funds get dispursed per Co-Beneficiary agreement.
Maybe I’m missing the whole point of what REAP and CAPP do for us! Can someone please clarify! Is it help with the EB down payment that comes into play … provided they can’t qualify alone?
Jerry CareyOctober 10, 2008 at 5:24 pm #27260
Scott Moyes & Dave Salcido:
I read a response to my posting above last night composed by David. I wanted to wait until this morning to respond to it … but, puff it’s gone … deleted into cyberspace! By the way, I took no offense to what was said and in fact thought it was complimentary.
Let me clear up something right now. I do not want to seem critical of your REAP program! In fact quite the opposite! I highly commend both of you for putting this program together and believe it will be a great success! It’s also long past due. I wish your program was in existance 2-3 years ago when I first discovered in the NARS program! Although I am a veteran investor of over 30 years … I can still see myself possibly using your service. I am not a NARS program veteran! While I have spent much time learning the concepts, legalities, and presentations of the program … I still have not done one NARS deal! This is possibly because I am not still 100% sure of how to put all the facets of a NARS transaction in the proper sequence to make it work. I realize that “Knowing” and “Doing” are two different things!
All that I and many others want to know is exactly what you (REAP) can do for us and what it will cost. Scott has teased us with bits and pieces of the program since last March. Also it was posted that you (REAP) were holding a one-day seminar around the middle of this month to launch REAP. Not all of us, including myself, can attend this seminar in Utah, so I hope that you can at least answer my before mentioned questions here with a descriptive posting!
Best of Luck with your new Venture!
With sincere gratitude for your past and future help!
Jerry CareyOctober 10, 2008 at 6:01 pm #27261
Jerry, I do not think Scott and Dave are going to post the details of REAP and CAPP here in this forum. It would be like KFC or Coca-Cola posting their secret recipes. I appreciate your questions but we are just going to have to trust Scott to get the deals closed when we find both ends.
I believe the main issues CAPP solves in a transaction are the following:
1. POF or VOD from the Buyer for Down Payment
2. Seasoning of titleOctober 10, 2008 at 8:42 pm #27262
I’m not asking anyone to give away “trade secrets”! Whatever Scott and Dave are going to say at the one-day seminar can be briefly explained or highlighted here! That’s all I was asking for…
Jerry CareyOctober 10, 2008 at 9:06 pm #27263
@Jerry Carey wrote:
Don: I’m not asking anyone to give away “trade secrets”! Whatever Scott and Dave are going to say at the one-day seminar can be briefly explained or highlighted here! That’s all I was asking for…Jerry Carey
Jerry I appreciate your reply but you are still asking or information that has been posted dozens of times already. But maybe I’ll try one more time.
1. REAP is Me and Dave
2. We are very good at the NARS System, either for long or short term transactions. Right now we are specializing in Short Term deals.
3. Because we are good and very experienced, and yes, have a few tricks (secrets) up our sleeves, we will Co-Partner (hold their hands) from beginning to end through a transaction, especially the Short ones.
4. “IF” they want to work with us, we will come to a split arrangement.
BTW: The One-Day Seminar is Bills. It is not a REAP Workshop. It is the same One-Day Workshop that Bill does. The only exception to that is that we spend more time in the afternoon going over transactions and how they were put together, including from first call to offer, to offer accepted, to information and documentation required, to dealing with Attorneys, Realtors, Lenders and the actual creation of the trust and any riders required.
My deal with people is that if they will gather all the info I need and find the Seller and the Buyer, I will do most, if not all of the “work” and split the deal with them. So other than a little hand holding, why would someone want to split a deal with Scott?
Because I can get more out of the deal than they could. In fact I’ll get more than my split most of the time. In other words, you get a closed deal with the same profits as you would have gotten. Thats more FREE Money.
And yes, I do have more secrets and that is what people pay me for.
You must be logged in to reply to this topic.