All Forum Posts by: Erik Carrion

No problem Tiara - how are things going out in detroit for you?

Also keep in mind the type of investor you have. If they are a buy/hold then they will refi their loan conventionally.

if they are fix/flip then stick with the HML calcs. But in the long run know what your investors will be doing

Those are the basics, yes. But remember that cash flow is dependent on a number of things - in particular your monthly expenses. For starters you need a good idea what the PITI is going to be.

These are pretty much fixed, and you can get a solid idea of what the prices are by shopping around for an insurance policy yourself.

I'm a big believer that the more information you have, and the more prepared you are, the better positioned you are to make the sale.

There's a big difference between marketing a house saying: ARV 250K Ask 35K and saying: ARV 250K Rehab: Roof, Kitchen, Exterior,etc. (with prices for each) Comparables, and rents in the area.

You want to break it down for them so that their due diligence doesnt require a lot of footwork. They may do everything over again, but if they see your numbers are exactly their numbers, they're going to work with you.

Well, you can draw up your own assignment contract or search online for free legal forms.

It's pretty much as simple as that

No, you would use a different contract with the assignee (the end buyer). In order to do this you have to get a lawyer to draw up an assignment contract for you that will cover all your bases.

In order for this to work it is absolutely essential that the PSA has "and/or assigns" immediately after your name. If you have these words there then you don't necessarily need an assignment clause.

When you find an end buyer what you want to do is use a different contract that very clearly states that the new buyer is assuming your position in the original PSA

The numbers have to be there. Understand that most cash buyers will probably be using hard money. If they are using hard money they are paying points + at least 15%.

Then think about the renovations that need to get done. Does the roof need to be ripped off and replaced? Is the foundation screwed? or is it minor cosmetic work.

What's the rent in the area? After renovations and interest will the investor cash flow? A lot of this stuff can be done on the back of an envelope for a quick idea, but you should get a good idea of the cost of renovations and financing.

On top of that - Know your area. If your investor is going to have to wait 8 months to sell the house, you need to factor that in to the price. That's 8 months of interest payments, utility payments, tax payments, insurance payments...you get the idea.

Think of it as if though you were investing to fix and hold/fix and flip. What's the absolute max you would pay for the house given all the relevant factors.

Then go from there.

That's absolutely right. Besides, fear and embarrassment are merely constructs of your mind. They don't really exist.

And if they don't exist, then there's nothing to be afraid of.

I'm new to this too Mr. Investor. I just know what it's like to be out there looking for info and not being able to find it all in one place. I'm glad you got some value from the post. That's what I'm here for.

Yes, I know. Deal with FSBO's. But, when it seems that the FSBO deals are running thin and most people are signing with agents, it seems that you HAVE to make offers on homes rep'd by an agent.

So, how do you manage that dynamic? If you're going to wholesale the property to another investor, that puts you in a position where you might get called out by the agent. If you get called out, the consequences aren't pretty.

On top of that, the agent is self serving, meaning they will counsel the owner to wait for the highest bid, which undermines what you are trying to accomplish. So describing the economic benefits doesn't seem to play well here.

Whatever advice people have would be greatly appreciated. Thank you.

Erik S. Carrion

No problem TC. The way i see it, a lot of the information out there is disjointed. And I had to piece it all together, which was annoying. So I figured I would return the love. I'm glad you liked the post. Good luck with all of your deals.

Erik