Couple of questions

[Shannon X.]

After reading online blogs and these forums and not understanding some questions I have written down a few that I would like to ask.

1) How do you find out how much money is owed on a house? For example I find a seller who wants to sell their house to me, would I just ask "Do you owe anything on the house?" and hear their answer or what documents should I ask for in order too see proof.

2) I'm not sure if this rule applies only to flipping, however do you always use the 65% rule? When would you use 60% on the ARV?

3) if you find a house buy its not worth the time for you and you pass it onto someone on your buyers list and they purchase the property how will you get a referral fee? Should their be a signed document or is the honor system in use when it comes to this?

4) What exactly is a probate letter? And how do you go about on finding people to mail them too?

That's all for now

Thank you

[Brandon Turner]

Hey Shannon, Here are a few of my thoughts:

1.) It's not always easy, but sometimes it is. A title search will usually show it, but that costs money and time and such. Asking is a great way to find out as well. And, in some areas (like mine) you can look up on your county's Assessors Office website and see how much the property was purchased for and what the lien amounts are (this can often give you an idea).

2.) It's never an exact science. The bottom line is - you need to make money and you need to be conservative. I don't even really think in those terms at all. I usually just look at the final price (after repair value) and subtract out the repair work, holding costs, closing costs, and my profit. If it makes sense, its worth moving forward. 60%, 65% , etc are just guidelines for real quick spur-of-the-moment calculations (in that case, use whatever number you want. It's not a big deal - if it works, and you begin to move forward, it's time to dive into the math and find out exact numbers.

3.) Depends on what you mean by "find the house." If you have the deal under legal contract, you can either sell (assign) the contract (if you used the words "and/or assigns" in the offer (which is what most wholesalers do) or if you didn't use those words (like with Bank REOs, which won't let ya) you can do a double closing, which means you buy the house and then re-sell right away (within minutes). The down side of a double closing, however, is that you are forced to pay your country tax when you sell, so you need to factor that in.

If the deal is just something you found but don't have under contract, there isn't a whole lot you can do (that I know of). Perhaps just honor system, I guess.

4.) Sorry, can't help ya here! It's something on my list to learn. Let me know when you find out!