Protect yourself always! - Posted by Gino


#1

Posted by Gino on January 18, 1999 at 18:46:50:

People always email me asking me why i never post here, so…Hopefull these 12 steps will help some people out. They apply to note brokers, buyers , RE investors.

if you are diligent in your efforts to abide by these rules, the chances of you being “snaked” will be greatly reduced.

1.know the entire transaction. Refuse to be rushed. a fast talking seller should operate as a red flag to be cautious. if there is some element of tyhe transaction that you do not understand and that cannot be satisfactorily explained to you, then then stop and find an expert in the field.

  1. Cultivate a strong working relationship with a dependable, knowledgeable expert and be guided by his or her advise.

  2. know the strengths and weeknesses of your seller, whether hes private or a company.

  3. Obtain a guaranteed title. insist that the escrow include all docs applying to your state and your transaction…try and read a book on escrows and the process

  4. read every instrument and obligation connected with your transaction. if at any time you dont understand you call your expert (mentor)

  5. always know the trrack record of all payors (applying to buying a note) this goes hand in hand with avoiding a unseasoned note. if you question the above given advise, read examples of fraud from experienced investors.

  6. always fully inspect your proerty that secures the loan. make your own appraisal or get one done by a professional. bottom line know the REAL value of the proerty and dont ever fall in love.

  7. check out all representations made as to cashflow and yields. if reps are made orally, make sure your seller puts them in writing and have dated and notorized

  8. before you begin to invest in RE or Mortgages, make sure you can meet all expenses that can be incurred by a forclosure (cover your butt)

  9. if your using a broker (mortgage or RE), realtor, CPA or anything like that, check into thier background. you ight even call the better biz bureau and check em out. even ask for references. build relations with these people slowly and carefully

  10. always keep in mind that the higher the return is expected to be, the greater the risk…if a deal is offered to you and it seems fabulous, take time and find out why. always see what someone is trying to unload on you

  11. Keep a full and complete record of the entire transaction for future reference just incase (keep good records)

i know alot of what i say comes from me being a person who enjoys carrying paper but it applies to all aspects of RE investing. ive been screwed numerous times early in my career and if i can help anyone else avoid it i’ll do what i can.

good luck,

Gino ----mrmortgage@hotmail.com

ps: a great tip to use with a seller is to tell em “well sir there are only 3 reasons a house wont sell, the price is too high, the neighborhood is shady, or the condition of the house is bad” then say “well your neighborhood looks nice, the house is in good condition, so what do you think the problem might be?”.

i use it almost every time, puts it in thier lap to start giving discounts.

with a note purchase use “term, rate, borrower”