Comments on: Resolution Trust Corporation - A Real Estate Investing Opportunity

By: Caitlyn Coyle

Caitlyn Coyle — Mon, 22 Sep 2008 19:28:11 +0000

If the two of you buy the property–that is, you provide the down payment and the occupant provides qualifying income and credit–the occupant has no skin in the game (not even first and last months rent!) and all rights of ownership. You would have to gift that person the down payment or you’d have to give him the down payment and have him put it in his single ownership account for three months while the money seasons. If you did this with a family member, it might work; otherwise, I think you’re asking for trouble. If you signed an agreement outside of escrow, you would be admitting that it wasn’t the occupant’s intent to fully occupy the property.

The parents of my friend loaned her and her husband a 20% down payment and signed a gift letter for over $100,000. When the couple divorced, they sold the property. It was expected that, under the circumstances, her parents were to be reimbursed. Husband said, “No, they signed a gift letter. Wife, you do what you want, but they get nothing out of my share of the equity.” There was nothing the parents could do about it.

By: Jeff Miller

Jeff Miller — Sat, 20 Sep 2008 21:59:11 +0000

@Caitlyn Coyle: I’m not talking about non-owner occupied. I’m talking about partnering with someone who needs a place to live for a year and putting them on title (with a contract between you and the partner). If nothing else, you can provide the loan for the person that is due in one year (not my preference though). In fact, it’s likely that you could be on title with the partner for added protection but it all depends on the actual wording of the offer.

By: Caitlyn Coyle

Caitlyn Coyle — Sat, 20 Sep 2008 20:07:32 +0000

Jeff, you’re correct that non-owner occupants are allowed under FHA guidelines; not so much under conforming guidelines.

By: Jeff Miller

Jeff Miller — Sat, 20 Sep 2008 14:52:35 +0000

@Chris & Bill: Yes, how you do it is very important.

Note: I said partner with someone who will live in the property. If that person is on title and living there, it is owner occupied for the current definition of owner occupied.

By: notmyrealname

notmyrealname — Sat, 20 Sep 2008 03:18:32 +0000

Caught? Fined? Oh please, my dog owns more property than I do.

Just kidding.
or am I…?

Keep up the good articles. Any thoughts on raising capital, certainly my technique of shorting financials isn’t going to work anymore…

By: Bill

Bill — Fri, 19 Sep 2008 23:58:53 +0000

Jeff, The fine for getting caught buying owner occupied property as an investor was $250,000……..not many tried that I’m sure…

By: Caitlyn Coyle

Caitlyn Coyle — Fri, 19 Sep 2008 23:42:44 +0000

** It would be great to know total REO’s by city or state, so we would know where to find the best deals. ** Prowl around these analytical sites: www.MGIC.com www.PMI.com

By: Chris

Chris — Fri, 19 Sep 2008 20:48:58 +0000

Jeff, have to be very careful how this is done. It can be construed as fraud depending on how it is done.

By: Tommy T

Tommy T — Fri, 19 Sep 2008 18:41:17 +0000

Bryan, have you found any stats on the actual number of SFH REO’s at this time? Hard to guess, the way the media reports things, you’d think every other home in the country has been foreclosed.

It would be great to know total REO’s by city or state, so we would know where to find the best deals.

That said, as I recall, the window closed very quickly on the RTC deals for small investors, and they went to bulk sales that only the big dogs could afford. I’m guessing the big money sharks are drooling right now.

By: Caitlyn Coyle

Caitlyn Coyle — Fri, 19 Sep 2008 18:18:08 +0000

People are already figuring out “get arounds” to exploit our failed system. Great. Just great.

The premise of your statement is flawed, assuming the common negative connotation of the word “exploit”. I can’t imagine why it’s a negative thing to brainstorm ways to take best advantage of the situation that the government has forced upon us. — Bryan Ellis