hey everybody! Its Brady here with a Mortgage Medic USA and I just wanted to
kind of put together a little video about how important it is to look at
your deal flow and deal structures through the perspective of your Joint Venture
partner. At some point you run out of your capital and if you want to grow
your capital you you need to make connections with the people and you know
find deals you need to let people know that you're in the business. Well this is
my full-time job, Mortgage Medic USA, I'm a distressed note investor I buy first
positions liens in Indiana, Ohio and Michigan. So it's important to as
you're doing this let people know kind of what you're doing
and show them how you put together deals and so you know I've got four bids
out I've got one that was approved and so when we're taking a look at this
perspective we can see that like this one is in Dayton Ohio it's about 15
MINUTES north of Dayton Ohio and and it's in a pretty little cool community it's
kind of like its own little neighborhood and it has a like a berm (levee) they built this
there like this there's this wall to protect it from the river and so when I
was talking to the realtor he was like I asked him do these homes need flood
insurance he's like no they don't they never flood matter of fact he's
like if the levees up to its max and they're not even worried about it it's
like that's cool yeah also another one said that his home his homeowner they
never even uh they never lock their cars so 15 minutes north of Dayton and they
don't have to worry about logging their cars well that's because there's no
apartments around there's no massive you know low value properties hanging around
them so crime is like nothing and so in this instance the loan balance on
this one is eighty four thousand dollars they owe an additional 18 thousand
dollars in arrerage, which is late fees and penalties and and other things and
so an arrerage account means you you can't you can't charge interest on that part
right that's not not accruing interest. Funding so you have to look at funding
when it comes to this thing and so that's the big part of it is you've got
to show the funding which needs to include
your worst case scenario cost in this case the worst case nor is foreclosure
so funding would be about $35,000 for this deal
the BPO came in at $45,000, not bad the ARV that's the after repair value. BPO
stands for brokers price opinion. ARV is the after repair value and that came in
at about 65 thousand so what are the numbers both a JV unpaid principal
balance discount relative to the JV's investment is about 43 percent which is
pretty low the JV's brokers purchase opinion relative to the discount is
about 80 percent which is a little on the high side but that's because it
includes you have to include foreclosure cost and when you talk about foreclosure
you've got to include holding fees the the loan servicer cost the before the
forced place insurance you're gonna have to change you know you have to make sure
the property secured property is a preservation the place has to get mowed
in this house and this house is pretty cool it sets across two Lots
it's a big house . Its listed as (correction 2 bedroom) one bedroom one and a half bath 2 car
detached garage ,cool little spot, but it's 1,800 square feet so I have to
imagine if this thing has way more than two bedrooms in it it's two stories not
bad little place and so so then you're like okay there's your numbers alright
so then how do you get how do you get your folks out of this deal well one of
the things you got to look at your extra strategies and so this is where it works
to that be flexible with your homeowners you know obviously we're all
geniuses is if we can get the homeowner to perform there's a lot of a lot of
movement to be able to modify this home loan, this this borrowers principal and
interest payment. I think it's kind of a personally and I have no problems
modifying and make it lower. If we could get it re-performing
no are you gonna get cash flow quickly you can sell this loan at 80% of its
unpaid balance for correction (51%) return on your investment yeah does that make not make
like you look like a genius or what? But that's not always going to happen
things do occur. So if you have to foreclose you let
it go at foreclosure now you're looking at a 15 percent return on
investment. so so yeah so then once you foreclose now you got the property.
Now it's consider REO and that's basically the bank, you the bank owns it
and then you're now REO so you own the property and now you've got to
figure out what your next exit strategy so you can put seller financing on it
you know put a little uh a little $10,000 a hard money loan and put ten
into getting a thing fixed up and then cashing a hard money lender out when you
sell the thing unless you you know you want to sell it this area is a good area
product for USDA loans if you're not familiar with those it's it's no money
down loan and they're they're pretty popular in Ohio. Flexibility again
flexibility is really key as Ohio is a little more expensive to foreclose. It's
it's about five grand, it takes about six months. That's not what I
want to do. Iet;s fugure out a way to get them performing again, right that's the
smart move that's the win-win move for everybody. so
anyway in summary is so it's important to show deals from your your partner's
perspective right if you're running your numbers from your perspective you don't
paint a picture for them you also don't paint a picture for the
what your goals are in which what your objectives are for for the deal and and
then being able to explain the deal kind of lets them get a little bit of
familiar with who you are and what your vision is
and so yeah for me my vision is I do this full-time
um this is where my sit-stand desk is and it's mostly staying and you know
break down tapes so like it assets evaluate get get outbid a lot do
research and then then you realize it's not worth funding but yeah this is where
I work in and so anyway I'm not gonna hold your any of your time but I really
appreciate you guys for hanging with me talk about looking at deals from your
JV's perspective and if you're interested please comment comment below
and tell me down below tell me what I can do better
what am i overlooking what am I missing did I forget anything I mean obviously
you know I've already called taxes the due taxes they're not really far behind
it's like $2,600 and and they've got some couple of water liens this area is
a sorry but this area is a it's city sewer they have their own Wells and they
have their own propane whole neighborhood and so so yeah I've already
call on that and yeah so yeah comment let me know what I can do better what
I'm not what am I forgetting and I appreciate your time for hanging
out with me on this Friday evening when you could be hanging out with your
family because it's it is Friday isn't it and it's probably dinner time didn't
good night ya'll. Smart investing as the Lien Lord
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