|
|
|
Q: How do I send in payment?
A: A wire transfer, cheque or money order. The cheques are sent in to 2637 North Washington Blvd. #131 North Ogden, UT 84414, or email us regarding wire instructions.?
Back to Top |
|
|
Q: Can I use funds from my IRA?
A: Yes, please call your trust company or Entrust at 239-333-1031 and you can speak to Brandon or Lucia.
Back to Top |
|
|
Q: Are there any closing costs?
A: No, all closing costs are included with your fee.
Back to Top |
|
|
Q: What if a property is very “beat up”? in a bad neighborhood?
A: If the inspection crew determines it’s un-sellable, the municipality deems it condemned, or we are unable to find a buyer, we will exchange your property.
Back to Top |
|
|
Q: How long before you can find someone to move in?
A: It typically takes anywhere from 3 – 6 months from the time you receive title to the property. Please see our “Timeline” section on the website.
Back to Top |
|
|
Q: How do you find renters for my property?
A: They are not renters and this is not a “rent to own” or a “lease to own” situation. Renters and lessees don’t own the property and as such don’t take care of it as well. We actually sell the property to the occupant before they move in by signing a land contract with them. The monthly payment always works out to be the same price as the Local Market Rent, so people get to own a home for the same price as rent. It’s an obvious decision for them.
Back to Top |
|
|
Q: How do you market my property?
A: Several ways. We put a sign in your yard that reads “Own this home for $500 down and $300/month” for example. We advertise on websites, buy leads from lease option companies, sometimes we enlist the help of realtors, it just depends on the situation.
Back to Top |
|
|
Q: Who takes care of any fix-ups/maintenance/renovations?
A: The occupants are responsible for this. When something breaks down or needs repair we do not call our bank to handle it. This is why they get such a great deal on the home, because they take it “AS IS” and are willing to put in some sweat equity to fix it up.
Back to Top |
|
|
Q: Who is the Insurance company?
A: The Property Management Company will provide that to you.
Back to Top |
|
|
Q: When are Taxes due?
A: Taxes are usually due later once you receive the Deed. That can take 4 – 6 months sometimes (The Banks are inundated with paperwork). And it also depends on the billing cycle of the particular State.
For example, you receive Title on Jan 1, an occupant moves in Apr 1, and you receive the Deed sometime in June.
Let’s suppose your State bills property taxes in April and October.
You would not receive a bill in April because you didn’t have the Deed yet. By the time the October billing cycle comes you will be billed from the period starting January 1 (you would have also collected monies from your occupant in escrow since Apr 1).
Back to Top |
|
|
Q: How do I get my monthly payment?
A: The funds are received by the escrow company (less the 10% management fee charged by the Property Management Company) and they wire it to your account or send you a cheque.
Back to Top |
|
|
Q: How long has Mohawk been doing “this”?
A: This opportunity has become available last year due to market conditions. The process this opportunity is based on has been around for over 20 years. We have always been able to go to the auction house, buy a property for cheap, clean up the title, get rid of all the liens like taxes, water bills, utility bills, renovation liens, etc.., find an occupant, and then sell the note later. This is not new.
With the sub-prime meltdown last year the banks began to panic and unload properties in bulk at a loss. This basically created the niche described above.
Back to Top |
|
|
Q: Do I need to sign a new contract to change ownership to an LLC? To add a spouse/partner?
A: No. You only need to notify our customer service department of this before you receive your Title and you have about 30 – 90 days before that happens.
Back to Top |
|
|
Q: How are my profit, monthly cash flow, & the price of a Mortgage Note determined?
A: It’s a combination of 3 variables:
1) The Local Market Rent
2) The Contract Price
3) The amortization period
The local market rent determines the monthly cash flow, how much you can charge (e.g. $300). The potential occupant makes an offer on the price of the house. (e.g. $35,000). The amortization period required to pay off a $35k note, at $300/mth is about 30 years. This is usually done at 10% interest.
So they may sign an agreement with you for $35,000 at $300/mth for 30 years @ 10% interest. You then collect the $300 mortgage payments and hold the note similar to a bank.
Back to Top |
|
|
Q: How does the sale of the note happen? How much do I get on the sale of the contract?
A: The Management company shops the contract to various contract buyers. The length of time you collect monthly payments is considered the “seasoning” period for the contract companies. Some companies require more seasoning, some less. Those that require less seasoning where you can sell your contract after 4-6 months may pay only 65% - 70% of your contract value. If you wait longer, 9-12 months, you may get 80%-85%. Less seasoning means more risk to them. If you’re lucky enough to get someone who can refinance on their own using the FHA program you actually get 100% of the contract.
Back to Top |
|
|
Q: If I have a $35,000 contract, what percentage of that would I get?
A: You will get a percentage based on the value of the contract less the principal already paid off.
Eg. If you collected $300 x 12 months = $3,600. Since this is the beginning of the contract, it’s mostly interest and of the $3,600 maybe only a couple hundred dollars is principal, let’s say $200 is principal. So your contract’s face value after a year is $34,800.
Don’t forget the 3% Brokerage fee charged by the Management Company. Their interest is your interest. The more they make the more you make.
Back to Top |
|
|
Q: Can I just keep the contract for longer?
A: Absolutely. It’s your contract and can do with it as you please. Keep it for 30 years if you like.
Back to Top |
|
|
Q: So after I pay, what happens then? How soon will I be contacted & by whom?
A: After cheques have cleared and funds are released from escrow, Mohawk will issue the address to your property within 5 - 10 business days via email.
The Title to the property will be issued by within 30 – 90 days. See our “Timeline” section of the website for an approximate timeline based on past averages. It may work out to be longer or shorter based on the situation.
Back to Top |
|
|
Q: Can I pick which state the property will be in? Can I wait for a higher value property?
A: No. The properties are sold on a first-come, first-serve basis. We buy these properties in bulk, sight un-seen. We do not know if a property is sellable at the time it is allocated to a client.
Back to Top |
|
|
Q: Who does the valuations for the properties?
A: We use 3 different nationally recognized valuators:
1. Cyberhomes.com (owned by Fidelity National Financial, Inc. [NYSE: FNF]
2. Zillow.com
3. E-appraisals.com
Back to Top |
|
|
Q: What does a livable property mean?
A: We use 3 criteria.
1. The municipality
2. Our crew inspection
3. We are able to sell the property
Back to Top |
|
|
Q: Who takes care of finding a suitable candidate to move in?
A: The Property Management Company.
Back to Top |
|
|
Q: How involved can I be in finding buyers, tenants, or even renovations that I may want?
A: Once you acquire a clear title to the property, you own it and can do as you please. However, The Property Management Company has implemented a process that has existed for over 20 years.
Back to Top |
|
|
Q: What if the buyer I have cannot make the monthly payments?
A: Our Property Management Company will evict them for a fee of $600. The Property Management Company will find a new candidate to move in.
Back to Top |
|
|
Q: What if the tenant abuses my property?
A: They are actually not a tenant but the home owner and as such treat the homes as owners not as renters. You as the title holder hold the contract on the property, similar to a bank.
Back to Top |
|
|
Q: What if maintenance or repairs are required?
A: The occupants are responsible for this. When something breaks down or needs repair we do not call our bank to handle it.
Back to Top |
|
Q: What about taxes & legalities?
A: We recommend that you consult with a CPA and a local attorney before purchasing properties.
Back to Top |
|
|
Q: Are utilities turned on when we purchase the property?
A: No. They get turned on when someone moves in and they are the responsibility of the occupant.
Back to Top |
|
|
Q: How do I know the note will be sold?
A: The contract sale is not guaranteed. The Property Management company does not become wealthy from charging a $35 - $50 monthly fee on the contract, rather they are more interested in selling the contract for you and making a 3% service fee, so their interest is your interest. The discount contract purchasing industry has been around longer than this opportunity has… We do not control that industry; although we believe it will continue as it has in the past.
Back to Top |
|
|
Q: What are the different exit strategies?
A: * Sell the contract using our system
* Hold the contract for positive cash flow
* Sell the Property via a “quick sale” to a local cash investor
* Potential refinance from the occupant... paying you 100% of the contract
* Fix & flip..
Back to Top |
| |
Q: How do I get started?
A: Read over the Purchase Agreement and contact us to move forward
with your purchase.
Back to Top |
