All Forum Posts by: Brad Gibson

They did get me for an extra 10k.  No doubt.

But the choice was to lose a really good deal and get nothing versus getting a good deal and still making some money.  The market I'm investing in is white hot and a seller's market.  To find something that will cash flow is not easy & I want to move into properties with more than one unit.  This place has two units.

I was furious, angry, and felt cheated yesterday. This morning, I had to decide if I wanted the deal or not. I decided I could live with just under $550 mo cash flow and decent COC.

@Matt K. if it were you in my shoes, what actions would you take given that I'm just getting started and don't have scores of units, so each one counts?

Wow.  Thanks for the kind and inspiring words @Anna M.  

With the numbers I've run (shout out to Bigger Pockets rental calculator), the property should cash flow about $545 a month and net approximately 18% Cash on Cash return in the first year.  It's still a good deal even at the higher purchase price and I'll leave the rest up to karmic justice and pray blessings on both the buyer and seller.

You are certainly correct.  I was nicked for an extra $10,000.  

Unfortunately, I have found in the 1.5 years that I've been doing this that the real estate business is super slimy.  This will be my sixth deal.  During that time, I've lost 3 due to shady circumstances and agents or sellers who put dollars over ethics.  It seems like it is simply the cost of being in this business in real estate.

This one is completed.  The sale is going to go through.

This morning I followed up with seller's agent and was able to get additional context.  The house is a flip and the guy is simply having seller's remorse thinking he could have got more money than the list price & what we agreed upon in the contract.

 I told both of them that I would see this through to the end & wouldn't mind sinking a few more thousand on attorney's fees just to hold everything up and costing both of them some time and money.  The home also cannot be listed again until this is resolved and I don't mind him holding onto the flip until we can come to an agreement.

I also posed a second choice to the first option.  Originally, I asked him to return my EM plus an equal amount.  This morning, I indicated I wanted the deal to go through and would be willing to come up with half of the additional amount the seller wanted.  Either option would work for me.

The numbers still work at the new sale price, but it'll reduce my COC as well as my monthly cash flow a bit. But it gets the deal done none of us have the additional headaches. It sucks to get screwed out of an additional 10k, but it is what it is.

Seller agreed to proceed with the sale and will meet in the middle.

I contacted a lawyer. He indicated that the seller would be in violation of the contract. It could take some significant time & litigation, but I would win. 

I offered to let seller out of the contract for a couple thousand dollars. Essentially, the get out cost matches what he would have kept from me had I backed out of deal. 

That seems fair & congruent. I’m still disappointed to not get house at the number we originally agreed upon. 

Submitted a full price offer for a 3/1 with a guest house. The numbers work great after house is rehabbed. Offer was signed yesterday by seller & I paid both earnest money and option fee. 

This morning, the agent calls to say the seller was confused and really didn’t want to sell it at that price. That was the price he wants to net. Seller says he wants 10% more to go through with sale. The seller is refusing to go forward with the sale & basically indicated there is nothing that can be done. 

Seller’s agent indicates he simply won’t cooperate with the sale & wont show up to closing. 

Anyone ever have this type of thing happen or have advice on how best to proceed? It is a standard TREC contract. 

Thanks in advance. 

The way I'm reading the news articles about this last minute provision is that it would mean 20% of the income from the pass through entity would be deducted.

My thinking is that would trigger a tax bill on the remaining 80% at the personal tax rate for the person who receives the pass through entity.

So you take what your business earns after expenses and depreciation.  Chop 20% off of that number & then pay taxes at your regular personal rate on the rest.

I'm not a CPA or a tax attorney & the bill hasn't passed, so take that with a grain of salt.

Don’t do it. You’ll end up upside down. If you want to buy an investment property, get a duplex in Midland & house hack. 

Duplexes are VERY hard to come by in Midland, but if one comes up, then go for it. 

In fact, getting some land & building some duplexes as a developer would pay off as well. 

Cash flow is extraordinarily strong in Midland/Odessa currently.  Homes are appreciating as well, but I think that might be an issue of timing.  If the bottom falls out of the oil industry and folks stop doing exploration in the shale plays, then I think much of that appreciation might evaporate.

That said, for at least the next couple of years, it appears that buy, hold, and invest for cash flow is going to be very lucrative.

Thanks for the info guys. Handyman will board up the window & I will get that repaired tomorrow. 

Police report is done. Insurance is called for damages to the home. 

Hope I have all of my bases covered. I suggested the tenant have renters insurance, but did not require it. I did have him initial on lease that it was recommended & he is responsible for losses.