All Forum Posts by: Account Closed

Are you the lender or the borrower in this situation? It's the lender's responsibility to provide the note, the mortgage/DOT, and any other documents that may be required. The lender should be sending over a package containing all of the prepared documents, along with instructions on what needs to be executed, as well as reviewing for effective execution prior to wiring/releasing funds. I would not rely on Title to draft these or to advise on title commitment/title policy as Title typically represents the insurer. I dont know CA's rules and customs, but my experience is that the Title/Closing attorney does not represent the lender's interests. If they botch something, it's the lender's problem to deal with.

Another thing, if the lender doesnt provide written closing instructions, the closing protection letter goes out the window. I believe not having written instructions has some impact on the lender's ability to go after the attorney/title company if get jack up the closing, as well, but I'm not 100% on this. My understanding is that if the closing instructions are followed, then the lender has no recourse against Title/E&O claims for any mishaps that result from Title following the directions. This is not a generic form I'd pull from a random source.

Hey Patrick, thanks for your insight! I am the borrower. Why would escrow/title need the note for the purchase? This is a private individual, what are these "required" documents and who is requiring them? Aside from loan position, prepayment of taxes (if any), prepayment of interest (if any), what else should the lender be mindful of?

0 Votes

San Francisco, California

Quote from @Scott Wolf:

Quote from @Account Closed:

Sorry if this isn't the right forum...

Title/Escrow is asking us to provide the interest rate or note and lender instructions for current deal. We utilize a private individual for loans. We've done two projects and have never had to provide this to escrow. They will simply draft a deed of trust.

The interest rate or note -- no big deal as we have that. But, not sure why they need it for deed of trust preparation.

Secondly, not sure what to do about lender instructions. Does anyone have a template handy for a private loan? What are the main elements we should include?

Thanks!

Title may have a standard form they use. I'd ask them first.

Will do! Same title company from last deal two months ago, so it's a bit surprising they want this now.

1 Vote

San Francisco, California

Sorry if this isn't the right forum...

The interest rate or note -- no big deal as we have that. But, not sure why they need it for deed of trust preparation.

Secondly, not sure what to do about lender instructions. Does anyone have a template handy for a private loan? What are the main elements we should include?

Thanks!

0 Votes

San Francisco, California

What are some reasons wholesalers either hold and flip vs. assigning out? I have a few wholesalers in my area who flip a ton of houses but also list some that they are willing to assign. My assumption is they avoid the headaches or have too many in their flip queue and would rather assign. Just seems odd why they wouldn't flip them all...

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Quote from @Nicholas L.:

@Account Closed

just curious - are you able to share what experience you have, what types of deals you're looking at, and what price point you're looking at? i always get nervous when new investors state that they're 'anxious' or impatient to get a deal. that can be a recipe for trouble.

not trying to be discouraging, just trying to look out for you. no one - not an agent, a wholesaler, a contractor, an appraiser - is going to take any responsibility whatsoever for anything. the success or failure of every single step of every single project is on you.

I've mainly been targeting off market properties through wholesalers. In addition, on market and off market REO's. Foreclosure auctions are on the table, although least preferred due to the lack of interior access (maybe with more experience). I have seen some on market properties that would work as well, but your numbers need to be solid since you'll need to submit highest and best quickly as they move so fast.

Buy box is $300k-$600k, SFR/Condo/Townhouse.

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Quote from @Matthew Paul:

@Account Closed Before you buy anything , you better find a contractor you can trust . The majority of the contractors out there dont want to work for flippers . If you dont have a contractor lined up before you buy anything , you will be waiting months before you can start work just looking for a contractor .

As far as estimating costs , every house is different . There is no hard and fast method , besides experience .

Hey Matthew, thanks for your reply! Why are contractors hesitant with working with flippers? Is it solely related to flippers wanting to keep costs low?

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Quote from @Tim Delaney:

There is some great advice here already. My approach was to partner with a GC, so he handles the rehab estimates with his years of experience.

Another option is to read J Scott’s book on estimating rehab costs.

I've heard a lot about this book. Is it still relevant? A lot has changed since 2019. If it is, I will certainly pick it up and give it a read.

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Quote from @Ryan Irwin:

Quote from @Account Closed:

Another strategy would be to reach out to your local network of fellow investors/flippers. Ask them what they are paying for their rehabs and you can use that as a baseline for estimating your costs, based on square footage, etc.

While a lot of flippers won't give out their contractor info, they should be willing (or even proud) to tell you how much they are paying for rehab costs. These conversations can help with sharing stories, etc.

Hopefully you know some local fellow investors, but if not, certainly developing this local network is important and would put an emphasis on that as well.

This is a great idea. I know a few investors around the area, but will look to connect with more. An interesting fact about flipping in CA -- effective July of this year, investors are required to disclose their contractor name and contact information.

1 Vote

Quote from @Wilson Lau:

Quote from @Account Closed:

I’m looking for someone to help ease my thoughts… California Bay Area

I have everything ready to go for my first flip… financing, financial spreadsheets, acquisition and disposition playbook, design criteria, etc. I have title and appraisal experience, so comps, etc don’t worry me

The one thing that is giving me heartburn is estimating rehab costs… good deals move quickly. I have no time to schedule a contractor to walk through and provide a comprehensive bid. I see investors selling for $100k-$125k above purchase with full kitchen, baths, flooring, paint, etc rehabs. I’m presuming profiting as well. I don’t see how those numbers make sense…

I’m considering paying some contractors to walk an on market house with me (that I don’t intend on buying as the numbers would never work) just to get an idea of their costs. I can then take those figures and estimate for future deals based on size, room and bathroom count, etc.

Is this the best play here? I’m anxious to jump in and start making deals, but these rehab costs can make or break a deal. I’m fully prepared that there may be unforeseen costs, but I can’t even estimate properly for your standard cosmetic rehab…

Hey Pat. From my observations, on market deals almost never make sense for flippers. Even if the numbers look good, you will get tons of competition that eventually will drive the price off your excel sheets.

Where are you planning on doing your flips?

Hey Wilson,

I don’t intend on purchasing an on market property for fix and flip although I have seen a few that make sense. The walk through with a contractor for an on market property is simply to get a sense of their costs without any urgency.

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I’m looking for someone to help ease my thoughts… California Bay Area

0 Votes

All Forum Posts by: Account Closed

Account Closed has started 8 posts and replied 22 times.

Post: Lender Instructions for Private Party Loan

Post: Lender Instructions for Private Party Loan

Post: Lender Instructions for Private Party Loan

Post: Wholesalers Holding and Flipping vs. Assigning

Post: Anxiety Over Rehab Costs

Post: Anxiety Over Rehab Costs

Post: Anxiety Over Rehab Costs

Post: Anxiety Over Rehab Costs

Post: Anxiety Over Rehab Costs

Post: Anxiety Over Rehab Costs