All Forum Posts by: Arthur Lyons

What should be included in a contractors contract?

What should be included in a contractors contract?

Mark Blashkiw yiu mentioned yiu getting theese properties for your buyers... are you wholesaling them? Are the contracts assignable? How are you wholesaling them or passing to buyers?

Braden C. How did you wholesale it? The contract was assignable? You were able to write and / or assigns?

I never bet on appreciation. Always buy for the current numbers, does it cash flow now. However I do try to get both. In other words only buy for properties that cash flow now but also buy in areas that have signs of appreciation. Good school districts, near boundaries of water, parks, other expensive neighborhoods, good job growth, universities , local cities developing the areas transportation and roads, huge commercial high end stores moving to the area, and he other things that tend to show signs of an area appreciating.

This is a little annoying but absolutely fine. Just make sure that you have a contingency clause with your offer. Something along the lines of offer is contingent upon inspection of second unit to ensure it meets the buyers expectations. Or some verbiage similar. Then if you don't like it don't go through with contract. Make sure your deposit is in escrow so that it's not cashed.

I use 2 maybe 3 pieces of paper. #1. a promissory note: This would be used if the money you are receiving is being set up as a loan. It states the terms of the agreement. loan amount, points if any, Interest rate. I typically shoot for 1 point and 8% interest paid over the course of 6 months to a year. #2 a Profit split agreement. Because I pay 8% and sometimes 6% I will offer a profit split on top of the interest IF the investor is putting up most of the money. If they are giving me 100% of the money needed for the deal I sweeten the pot with a share of the profits. *Sometimes I only use form number 1 or number 2 but not both.  3. To give them a sense of security you can also make them a lien holder on the house you are purchasing so they know their investment is backed by real estate.  LASTLY BONUS ADVICE: Add them to your life insurance policy for the life of the project for the dollar amount that they have invested. IF anything happens to you they will be covered and your family doesn't have to worry about messy paperwork.   In the words of Lavar Burton from reading rainbow "but you don't have to take my word for it"  consult a lawyer.

IF inspection is good, and numbers are good, and you have a rental close by that is doing well and good tenants in place I have no clue why you don't want it.  Pass the deal my way sounds like a good one, Ill buy it haha

Soooo when you say "decent" area what does that mean? Is your gut telling you that the area is more on the side of questionable? Will the area be decreasing in value soon?  Even if it does it sounds like you are cashflowing and you should be safe.  Are you a new investor? Maybe you are just nervous?  Is the seller willing to sell so cheap because of liens? Did you have an inspection to ensure there aren't any hidden foundation, roof, or other issues? Are all the major mechanicals good?  If all that checks out Im not sure what your gut is telling you.  Im normally a follow my gut kind of person so maybe wholesale this deal and then find one that you like. Not really sure if that helped. Most times I say if the numbers work in an area you like go with it.

Yes. If you have an LLC get a business bank account. And start to develop your business credit.