Help!

[Meg Sparling]

Hi everyone!

Brand new to this but want to learn and am serious about it. I'm 50 years old, played by the rules and Im tired of being broke! Time for a change.

So, my next door neighbor wants to sell his house and I am interested in buying it myself. I own my home with 1 mortgage and have about $65,000 in equity. I am a single parent with no cash and poor credit. That being said, I know if I can bring my neighbor a buyer, I might have a deal. Any ideas on whom I should approach buyer/investor wise? I'm clueless! Thanks.

[Scott Matthew C.]

Hi Meg, 

Step by Step Game Plan for Wholesaling...... from how I read your message is that you are wanting to Tie-Up the property and then have an "investor" take it over...if that is the case follow the Game Plan below..however.."please seek someone in your REI to help walk you through the process ( you may want to incentives them......, seek professionals such as an attorney/Realtor that understand the real estate investment industry...You want someone that is well versed and has had experience"...............Meg you can do all of this your self too.... you don't have to be a real estate agent because buying the property in an LLC is not real estate :) .... pretty cool huh....

WHOLESALE:: The work that you need to have done before you Tie-up (an agreed contract to purchase) the property......The community here will fill in the gaps that I have missed or need revisions to help you as much as possible....

Preface: Start with your exit strategy...in doing so you'll be able to present your opportunity to an investor(s) with a plan(s). You want your buyer/investor to understand what they are buying into and their return. Knowing your exit strategy first is the outcome your buyers/investors want to know!!!!!!

• Cost analysis (purchase price, firm rehab costs, after rehab value, pro forma including buy and hold, buy and flip, lease option, land contract, etc.)   

Step 1: Form an LLC (Ex: Meg Sparling, LLC) <---Why? So you can sell the LLC if an investor is wanting to purchase it at wholesale, it protects you (you must have 2 principle mangers to make it more secure from corporate piercing, it's better to not have your name tied to the purchase, the buyer/investor will pay you whatever you agree upon to become the new managers of the LLC, your buyer/investor if they need to can do a quit claim deed to an individual or another entity down the road.*** In other words..... your buyer/investor will buy the LLC from you and take over the purchase, rehab, and sale of the property (buy and flip, buy and hold, lease option, land contract, and etc..... and that's it your out at that point....

Step 2: Have you or attorney/Realtor draft a "contract to purchase" in the name of your LLC (Meg Sparling,LLC) with the contingency that will allow you to assign the purchase to another entity or individual. You will also include EMD (Your EMD is not required to be deposited into escrow until both Buyer and Seller agree to terms and conditions. It is then when the EMD must be placed into escrow)

Step 3: Go through negations with the Seller and both You and the Seller will bottom line the "contract to purchase" the property...."this is when your EMD will be placed into escrow... )

Step 4: In your "contract to purchase" you will want to have 10 days for any and all inspections...... ****Important**** This is when you'll want to MARKET this property as a WHOLESALE opportunity...or even before going through the "contract to purchase" like you are now, I would highly advise going this route first.....nevertheless, you will need to have done your analysis for an investor of all kinds that are interested in the following models  (buy and hold.....buy and flip......land contract....lease options....etc)  <---- these are your exit strategies    

Step 5: Once you and the buyer/investor agree to terms and conditions and have signed a contract to purchase the LLC, they will hand you a certified check to purchase the LLC. You will amend the LLC with a form from your state to remove you and your partner as the principle managers, and then amend again with a form from your state to add your buy/investor as the new principle managers to the LLC. This completely removes you to purchase the property... you no longer have any equitable interest in the property.

Step 6: Introduce the buyer/investor to the Seller as the new managers of the LLC...

Step 7: Introduce the buyer/investor to the contractor that will complete the rehab work..

Step 8: Don't forget to cash your certified check!

Meg.... as you can tell there is a lot to do...... best of luck... Keep in mind I'm sure other real estate investors have different ways of going about this but all in all the goal is the same...... That is the quick version ..... the community will help detail more out..... I just wanted to get you moving in the direction that you need to go in.... again best of luck....