Where are the properties located?

Historically we have bought and sold properties in over 10 states, including: New york, Pennsylvania, Tennessee, Georgia, Florida, Alabama, Indiana, Ohio, Illinois, Michigan, Wisconsin, Missouri, Nevada, Minnesota, and Kansas.

 

What goes into selecting the markets you have worked in?

A number of indicators: (1) the migration of population moving into the area. This is indicative of job growth. (2) The local job market. Many times census data is years behind; jobs are generally created and then numbers are reported years later. (3) The quality of the homes in the area, (4) the age of homes relative to that quality, and (5) crime rates of those neighborhoods (6) rentability of the properties in the area.

What are the risks associated with buying real estate?

There are inherent risks with all investments. We recommend you seek the counsel of advisors and professionals. In the real estate market there are numerous professionals who can assist you when contemplating transaction. You can choose to use one or many of them, including: CPA’s, real estate agents, inspectors, appraisers, title agent, insurance agents, etc. If for any reason we can’t offer any specific advice regarding a property, we will simply tell you the facts we know about that property, and you can then choose to verify the information.

Why were properties bought and sold in different LLCs?

When we bought homes, sometimes they were tenanted, other times they were vacant, and occasionally we would find one that had squatters living in it.

Our intent on each house is to move it quickly to livable status, and get a tenant in it paying rent. Not knowing the exact details about a house until you get into it and understand its unique circumstances, you never know what you’ve picked up until you’re in there.

Given the litigious nature of our society, there are many people you can end up in court with over a property, ranging anywhere from the seller, tenants, contractors, property managers, and buyers. In understanding this, we exercise a strategy to compartmentalize this exposure by purchasing small amounts of properties in each different LLC, helping to minimize the potential litigation stemming from a single property that can then affect another property within the same LLC.

Because each property is unique, and there is sometimes unknown exposure of the property due to its age, prior distressed condition, possible lingering liability from old title related issues, or other unknown circumstances, we don’t want one house to create an issue with other homes that are not related to it.

That being said, we are happy to say there have only been a very small amount of litigation incidents relating to our properties over the last 5 years. As litigation issues have arose, its our desire to quickly and amicably resolve these issues.

Is the company a real estate broker?

Buypd never operated as a real estate brokerage. The transactions were always governed by a for sale buy owner style of sale. Buypd always used a title company to ensure title was conveyed properly and to ensure we acted in a compliant manner with given state laws.

Did you know exactly what rehab was done to the house?

Each house has its own story. In some cases we have actually done the rehab and know all the details. In other cases we may have bought the home from a contractor who did all the work, in which case we would likely know more information. Other times we may have bought the home from another investor who bought it from a home owner, in which case we may know very little and we would simply rely on our inspection report to show the condition of the home. In all circumstances, we do a third-party inspection on every home before we purchase it. In the event that the property does not pass the inspection, we will ask the seller to fix the needed items and then conduct a second inspection to ensure things are in order.

Most of the time, the renovations that need to take place do not require a city permit to be pulled, including things such as carpet, paint, updating lighting fixtures, switches, outlets, replacing of existing water or HVAC systems, etc. In the event that the renovations taking place require a permit, our inspection and due diligence ensure the work was completed and passed the city inspections.

We rarely, if ever, do any type of structural rehab like changing walls, windows, doors, adding or subtracting bedrooms, etc. If any of those types of things were done, we will have a full detail of those changes.

Why is the home sold on an “AS IS” basis?

BuyPD does not and has never offered any kind of guarantees related to properties. We don’t know anything more than what is included in the disclosures in the sales documents. We do not offer any kind of performance of the property, nor do we warrant any of the fixtures, finish, mechanicals, materials, etc. when one buys the property. Unless otherwise specified, we do not perform any work on the property after the sale.

Why do you not use a realtor?

Because we owned each home, we did not involve a realtor on properties we bought and sold, homes were offered on a “for sale by owner” basis. In many states it is required to be a licensed real estate broker if you sell more than a specific number of homes within a one-year period, with the exception given if one uses a licensed title company or title attorney to close the transaction. We avoid paying costly realtor fees, passing those savings on to our clients, and simply use a title attorney for each transaction to stay within the exemption.

How do you determine the value of a property?

We take a traditional approach of valuing each property. While for some it is sometimes difficult to know exactly which comparable sales one should use to determine the current value of the property, this is relatively easy for us since we see so many of the transactions in the marketplace, and know which properties are real comparable sales versus those that are not.

It can be easy to stack comparable sales to either end of the spectrum. We use a conservative approach utilizing multiple sales, not just our own, nor those of just our purchases. We mix those sales along with other closed transactions that took place in the marketplace not connected to our transactions.

One criticism voiced in the past that the property is over priced based on other sales that took place in the same area, but upon a closer review of each of these situations one will find a host of reasons why we priced the property at the value we did. A few of these are (1) the exact location, and the fact that one can find dramatically differently priced properties within a close distance. (2) The quality of the property will vary dramatically. While we may sell a house for $50,000, one can find other homes in the $5,000 range, or can find homes that have been purchased for $5,000. These homes generally would have been sold at a tax sale and in many cases all mechanicals are missing, windows and doors are gone, copper is out of the walls, it has roof issues and sometimes even foundation issues, along with it being in an area or on a street that is over 50% vacant. While the home may match the beds, baths, square footage and type of house, it is not realistic to call it a comparable sale.

On the flip side, we do not take homes that are intended to be sold as an owner occupant home, with upgraded finishes that lead to higher prices and call them comparable to a rental grade property without any of those nicer amenities or finishes.

Our valuation methodology is in line with traditional appraisal guidelines. We know that using these standards will assist our clients in matching up with the actual numbers produced by third-party appraisers when they move to sell or refinance their properties.

Are there any Guarantees?

Unless specified in writing with particular details, there are no guarantees offered by the company, its representatives, employees or agents.

Because real estate is real, and reality changes every day, we cannot and do not guarantee the performance of any given property or real estate asset. We encourage you to conduct your own due diligence on any assets you purchase in an attempt to minimize the risk of your purchase.

What is a trust deed?

A trust deed, or mortgage deed (generally meaning the same thing, with each state having a specific name they use), is the recorded document that states a mortgage has been created for a given property. The owner owns the home and generally has a warranty deed that states he has the full interest in the home. A mortgage is recorded at the same time or shortly thereafter stating that the lender has a specified amount of a loan that was made on the property. This allows the lender to record their interest in the property along with all the rights their loan provides them.

Why should I buy trust deeds?

Trust deeds can be a great way to invest your money in the real estate market without having to own or deal with the common issues related to being a landlord (i.e. tenants, taxes, maintenance, etc.). When you purchase a trust deed, you effectively become the lender to a borrower that owns a house. The borrower owes you the money you paid for the trust deed, (or the value of the trust deed) and generally is paying you a monthly payment for the use of your money.

If the borrower/home owner decides to sell the house, they cannot transfer clear title to the new owner without first paying you back the money you lent them (the amount you paid for the trust deed).

If the borrower does not pay you the required payments, the trust deed recording allows you to peruse a foreclosure to reclaim the collateral it is secured with.

What is a trust deed?

A trust deed, or mortgage deed (generally meaning the same thing, with each state having a specific name they use), is the recorded document that states a mortgage has been created for a given property. The owner owns the home and generally has a warranty deed that states he has the full interest in the home. A mortgage is recorded at the same time or shortly thereafter stating that the lender has a specified amount of a loan that was made on the property. This allows the lender to record their interest in the property along with all the rights their loan provides them.

Who services the trust deeds?

A company in Southern California, called Note Servicing Center, services the loans for BuyPD and its clients. They are a licensed mortgage servicing company and an independent third party that administers collecting payments from the borrowers along with making the payments to the appropriate trust deed owners. They also do any calculation of any prorated interest payment amounts in the event a pay off occurs in the middle of the month.

This ensures each payment is handled correctly and that no single trust deed is ever accidently sold to multiple parties. A client can be assured they are the rightful and sole owner of the trust deed by verifying with Note Servicing Center the payment they received was in fact received from the actual borrower and by then going to the county and recording their assignment agreement.

Do you still sell any assets?

Buypd began selling properties in 2010, properties have been sold in over 10 states, property sales largely took place as for sales buy owner transactions. These properties were selected to be purchased and sold based on a number of factors, price, potential cashflow, rentability, cost of rehab, depressed local market condition, lagging recovering market, number of foreclosed properties, undervalued prices, improvement of employment conditions, and increasing comparable sales.

 

The market conditions have changed dramatically over the last 6 years, properties once sold by banks and counties as foreclosed properties for pennies on the dollar are few and far between. The number of foreclosures in the markets we bought and sold in has continued to drop significantly each year. The prices in these markets have increased steadily and continue to do so. When prices were lower and there was the ability to buy significant quantities of properties at these lower prices buypd took advantage of these conditions, as the market has changed and these prices are far higher than they once were it’s no longer feasible to buy and sell at any meaningful scale, as such buypd no longer sells for sale buy owner turnkey or investment / rental properties. If you purchased a property and need support, we continue to maintain one  staff member to support any lingering issues that need to be addressed.