The Inverse Purchase is a technique taught by John Alexander.
A true "gentle giant" who was instrumental in getting me started in RE Investing.
There is more info on his website at www.paperbiz.com.
[addsig]
A couple of possible definitions come to mind. You tell us if the context in which you saw or heard this term fits either situtation below:
1. Eminent domain is the right of a state or the federal government to purchase or take private property for public use. The government may purchase property without the owner's consent by exercising its condemnation authority. The government may take property without condemning it through inverse condemnation. Inverse condemnation may occur through either the physical or regulatory taking of private property. A physical taking, as the name suggests, occurs, for example, when the government physically appropriates or occupies private property. A regulatory taking occurs when private property is impacted by operation of statute, regulation or administrative action. An example of a regulatory taking could be the government's restriction on land development by law enacted after the property has been purchased. Whether private property has been condemned directly or indirectly, the takings clause of the Fifth Amendment to the Constitution or state law compels the payment of just compensation.
2. Consider a tax lien auction where bidders do not actually bid on the face value of the lien, but instead bid on the interest rate they are willing to accept. This competition bids "down" the interest rate from some statutory maximum. In this sense, the auction result is an inverse purchase of the tax lien.
That was painful to try and read, but thank you for replying nontheless. I heard about it in a magazine, but it didnt fully explain it .
I went to that site that the first reply person noted, and I'm still reading. I pretty much got the gist of it now.
I have some of John Alexander's materials not the inverse purchase but I do have a decent idea of what it is.
You get a house under value on a contract. A 100k house for 90k. Put ad in paper, house 100k owner finance 5k down. Get buyer who is semi qualified and with 5k. Get the buyer approved thru your note buyer. All at the closing table you, create note for 95k (balance after 5k down), have the note buyer buy the note for 90k (note has above average interest, strict terms) use that money to pay off intial seller 90k, the note buyer is now in charge of and owns the note, the new homeowner now pays them and you get the 5k down.
John Alexander's company buys the notes. I guess the only complaint i ever heard was that they had a hard time getting their buyers approved thru the note buyer and they might as well have just gone thru a bank
Diego,
Just for the record.
The Inverse Purchase as taught by John Alexander has absolutely nothing to do with notes.
Allthough John still views the Note technique as a good low-risk way to get your feet wet in the Industry, he has developed more advanced techniques enabling an Investor to "flip" in a single closing, in such a way that lenders have no objections when they see the HUD-1.
It involves getting mortgage brokers involved in qualifying your buyers through regular lenders.
Just thought you'd like to know.
IS THE INVERSE PURCHASE BY JOHN ALEXANDER A GOOD PROGRAM? I HAVE HEARD A LITTLE ABOUT IT AND IT SOUNDS INTERESTING. I WAS WONDERING IF ANYBODY OUT THERE HAS PUT HIS PROGRAM TO THE TEST?
"Properly executed deed". In Florida, if the house was their homestead, that would mean that both husband and wife would have to sign the same deed. Neither one could quick claim nor warranty deed it to each other or to another party.
You should have a title company or an real estate attorney tell you the proper way for married couples to deed property in ohio.
They have both agreed to sign, it was me who thought if they quit claim one to the other that would be what they would say happen, but after talking to the wife, she said they have an agreement about the assests before going to divorce court, so I guess that will be ok.
Divorace court is not bankruptcy. The judge can not over turn a deed. My advice would be to get the deed ASAP - if you are geting it at a good price. Once you get lawyers involved anything could happen. Plus, in divoraces it is common that they are friendly now, but wait until one of them finds out there was another person involved, or that there is hidden money, or that so and so said something, etc. It can get ugly quick.
The Inverse Purchase is a technique taught by John Alexander.
A true "gentle giant" who was instrumental in getting me started in RE Investing.
There is more info on his website at www.paperbiz.com.
[addsig]
How does it differ from subject too?
-Source
A couple of possible definitions come to mind. You tell us if the context in which you saw or heard this term fits either situtation below:
1. Eminent domain is the right of a state or the federal government to purchase or take private property for public use. The government may purchase property without the owner's consent by exercising its condemnation authority. The government may take property without condemning it through inverse condemnation. Inverse condemnation may occur through either the physical or regulatory taking of private property. A physical taking, as the name suggests, occurs, for example, when the government physically appropriates or occupies private property. A regulatory taking occurs when private property is impacted by operation of statute, regulation or administrative action. An example of a regulatory taking could be the government's restriction on land development by law enacted after the property has been purchased. Whether private property has been condemned directly or indirectly, the takings clause of the Fifth Amendment to the Constitution or state law compels the payment of just compensation.
2. Consider a tax lien auction where bidders do not actually bid on the face value of the lien, but instead bid on the interest rate they are willing to accept. This competition bids "down" the interest rate from some statutory maximum. In this sense, the auction result is an inverse purchase of the tax lien.
That was painful to try and read, but thank you for replying nontheless. I heard about it in a magazine, but it didnt fully explain it .
I went to that site that the first reply person noted, and I'm still reading. I pretty much got the gist of it now.
-Source
The inverse purchase:
I have some of John Alexander's materials not the inverse purchase but I do have a decent idea of what it is.
You get a house under value on a contract. A 100k house for 90k. Put ad in paper, house 100k owner finance 5k down. Get buyer who is semi qualified and with 5k. Get the buyer approved thru your note buyer. All at the closing table you, create note for 95k (balance after 5k down), have the note buyer buy the note for 90k (note has above average interest, strict terms) use that money to pay off intial seller 90k, the note buyer is now in charge of and owns the note, the new homeowner now pays them and you get the 5k down.
John Alexander's company buys the notes. I guess the only complaint i ever heard was that they had a hard time getting their buyers approved thru the note buyer and they might as well have just gone thru a bank
Diego,
Just for the record.
The Inverse Purchase as taught by John Alexander has absolutely nothing to do with notes.
Allthough John still views the Note technique as a good low-risk way to get your feet wet in the Industry, he has developed more advanced techniques enabling an Investor to "flip" in a single closing, in such a way that lenders have no objections when they see the HUD-1.
It involves getting mortgage brokers involved in qualifying your buyers through regular lenders.
Just thought you'd like to know.
[addsig]
IS THE INVERSE PURCHASE BY JOHN ALEXANDER A GOOD PROGRAM? I HAVE HEARD A LITTLE ABOUT IT AND IT SOUNDS INTERESTING. I WAS WONDERING IF ANYBODY OUT THERE HAS PUT HIS PROGRAM TO THE TEST?
I would say, since they no longer own the home, they say nothing. It is no longer marital property.
As long as you have a properly executed deed signed by both parties you should not have to deal with their marital situation.
[addsig]
"Properly executed deed". In Florida, if the house was their homestead, that would mean that both husband and wife would have to sign the same deed. Neither one could quick claim nor warranty deed it to each other or to another party.
You should have a title company or an real estate attorney tell you the proper way for married couples to deed property in ohio.
Brenda ,
They have both agreed to sign, it was me who thought if they quit claim one to the other that would be what they would say happen, but after talking to the wife, she said they have an agreement about the assests before going to divorce court, so I guess that will be ok.
Divorace court is not bankruptcy. The judge can not over turn a deed. My advice would be to get the deed ASAP - if you are geting it at a good price. Once you get lawyers involved anything could happen. Plus, in divoraces it is common that they are friendly now, but wait until one of them finds out there was another person involved, or that there is hidden money, or that so and so said something, etc. It can get ugly quick.