All Forum Posts by: Brett Russell

Hi @Kimberly Allen and welcome to BP!

I believe you and I talked once last year at an Ann Arbor REIA meeting. If so, good to see you here... there is so much to learn. If not, good to meet you.

Steve Kuan , the GRM is just another way to look at the relationship of rent to purchase price. The "2% Rule" discussed in the Ultimate Beginner's Guide equates to a GRM of 4.17 if you do the math. Saying it doesn't work in your area isn't entirely accurate: the rule would say you shouldn't be buying most properties in your market for rental income. Whether one sticks to the rule is entirely up to them.

@Jody Powell , all of our discussion is basically mute because when I went back to the website just now to look at their wording, they have discontinued the EMD funding program.

In either case, I still think you were giving them too much credit. The "changes" you quoted in your initial post did NOT say "Hey guys, we've been getting too many marginal deals so before we accept it, we need you to provide more information to back up the ARV and rehab costs so we know it will be a viable deal." Instead, they were still willing to accept any deal as long as you put up a $500 non-refundable fee and they still had time to exercise contingency clauses and get back their EMD money.

Ultimately, I'd say they way they had things set up was way tipped in their favor and took advantage of inexperienced wholesalers. But that's just my belief and it doesn't really matter anymore because they are no longer offering that program.

@Braden Souder , did you listen to the current podcast episode (from last week)? This was discussed and the guest (Grant Kemp) says you can do as many as you want as long as you work with a residential mortgage loan originator who does the actual negotiation. Don't quote me on the details, check out the podcast, contact Grant and contact an attorney, but I got the definite impression from the discussion that DF isn't the death sentence to seller financing people have been led to believe.

@Account Closed , if you don't have a realtor to help you, you can use zillow. But NOT the zestimate. Search for the property itself, then in the right margin there should be a "nearby similar sales" link. When you click on that, you can see a bunch of recent sales. You can sort by date sold, size, etc. Look for very similar properties, as close as possible in distance, as recent as possible.

@J. Lancaster , it doesn't look like they are funding the projects, just the earnest money for the wholesalers to be able to assign the contract.

And see this topic for my concerns about them doing that.

@Jody Powell , I would be really careful here.

I just spent a few minutes on their site... seems like a great deal... for them.

Note that nowhere in their deal standards does it actually talk about the potential for end buyer to make a profit (ie must purchase at least x% below retail). Why? They don't care because they keep your $500 fee if no one will buy it.

If an end buyer is actually interested, that's even better for them because they keep at least $3500 ($4K if EMD < $16K minus the $500 they "bonus" you in addition to give back your initial $500). That's an amazing return for them in a few weeks time. For the wholesaler, however, that seriously eats into margins. Certainly if there was no other option to get the contract signed and it had a $10K assignment fee, then keeping $6500 is better than nothing, but what if the assignment fee was only $3000? Then you actually lose money.

And, their claim to work to help find an end buyer by contacting all their wholesalers would just add another person who is going to get a piece of that assignment fee.

Finally, I'm certainly not a lawyer, but I'd be more than a bit concerned with the process of immediately assigning the contract to them and their claim "it leaves total control over the deal... with you". I don't see how that is the case. My understanding (again, NOT a lawyer) is that if the contract is assigned to them, then they could cut you out of the loop.

Hi @Andrew Briones

I have been very happy with my Fidelity Investment Rewards Amex. It gives 2% cash back everywhere (no worrying about categories) and there is no limit. Also no annual fee.

Only issues are: Amex not accepted everywhere (but almost); it is not a true cash back card as you get less than 2% if you want straight cash, but if you deposit into a Fidelity account (ie IRA), you get the full 2%. I think you could also deposit into a normal brokerage account. For me, I plan to fully fund an IRA each year so I use the card for everything possible and then I don't have to come up with the full amount when it comes time to fund.

I know fatwallet.com has a finance forum where they discuss best credit card offers (among other things) so you might want to check it out.

@Jordan L. , I was starting to look into this also. It looks to me, though, like there isn't much difference between how the address will end up looking between UPS and USPS. In either case it is the address of the store/post office followed by # and then your box number. You don't ever get your own, personal street address.

Are you seeing something else different?

@Jay Mani , run fast from this deal.

Even if you got it for $400K and had a $300K mortgage, at 2.9% your principal and interest alone would be about $1250/month. That doesn't include property taxes or insurance or the HOA fee. Add to that all the maintenance, property management, vacancy costs and then putting some aside for future improvements and you would probably be losing a few hundred dollars a month. Even if you were positive $100/month (which I don't think you'd come close to), that would be about a 1% return per year on your $100K downpayment... better off just putting that money in a CD.