All Forum Posts by: Christopher Brainard

Of course. Its very common, especially for commercial multifamily (5+ Units). If you're asking how to structure such a deal, its important to find out what the seller's needs are. If they don't have an immediate use for the funds from the sale, its often more advantageous for them carry back paper.

-Christopher

Hi @Devin Wilkinson and welcome to BP!

If your buyer is legit, they are going to need a copy of the original contract before they agree to the assignment. As a wholesaler, you're selling the contract that you have with the buyer (not the house), so its important for the end buyer to understand what terms you've agreed to with the buyer, as they will have to fulfill them in the end. 

Also, before you or anyone else flips out, a good investor isn't going to care what you have the property under contract for - they care what their purchase price is and if it fits their investment criteria. As long as you're offering a fair deal and have a reputable buyer, you won't have any issues. 

As for the rest, the title company will take care of things and issue you a check upon closing.

-Christopher

Hi @Jack D Falkner and welcome to BP!

While your age limits what you can legally do, it shouldn't be holding you back in terms of real estate. You just need a partner who is of legal age or a real investor who will reliably buy your leads (not a random list of 600 people who may or may not be willing to close a deal with you). Because of your age, you do need to have this relationship established first - prior to making any offers on a house, as the offer will need to come from someone else or a business entity that can legally enter into a contract. I also highly recommend that you find someone experienced. While you may have read a lot or practiced the mechanics of making a deal, nothing is a substitute for actually going through the process and you need to safeguard yourself from as many mistakes as possible.   

-Christopher

P.S. About your parents - nobody believes that you can do something that they choose not to do. Everyone has a reason why you will fail. Few can imagine anything but working a 9 to 5 job for 40 years and hoping to save enough in a 401k to retire. Life is filled with this sort of ignorance and negativity. You should pay no attention to it from them, or anyone else.

When houses are on the fringe of the ghetto, you need to know if the ghetto is expanding or contracting. If its contracting, its a buy. If not, pass.

-Christopher

The first question is, what is the property zoned for? Just because you think that it would make a good multifamily property, doesn't mean that the government agrees.

-Christopher

The problem with your theory is that two years from now, real estate prices may not increase and could possibly even be lower. If you sell, you could end up losing money after you figure in all the real estate fees, realtor fees, etc. If you have flexibility or don't mind being a landlord longer term, this is a good strategy. Attempting to time the market two years from now could be problematic. Also, a single year probably isnt sufficient to cover the loan and closing costs to justify the buy.

-Christopher

Hi @Cerelia Bennett and welcome to BP!

Unless this is a Prime Class A property, most renters have lower credit scores than buyers, I wouldn't find this particularly alarming. 

Generally speaking, most landlords look for a score over 600.

-Christopher

@Neil Hunter

Hi Neil and welcome to BP!

You are correct that flipping has less long term risk and macro economic uncertainty attached to it. Unless you take forever to complete the project, your exposure to the market cycle is very limited. As long as you buy right and fix it up properly, you should be able to dump the property, even if the economy takes a header. It does carry more micro risk than you may realize - most fix and flip properties are highly distressed which means deferred maintenance. They tend to have more hidden problems than buying rental properties off the MLS. Additionally, Fixing and Flipping is more of a job than an investment. It requires a lot more hands on time and a lot more knowledge about the construction process.

With that said, since you have a full time job, I wouldn't recommend it at this point in the market. The market itself is highly competitive and I'm not sure you'll have the time to devote to finding and managing the property. This can me mitigated if you can find a reliable general contractor, but I think there are more bad apples these days than good ones.

-Christopher

P.S. Almost forgot, a traditional lender isn't going to finance a fix and flip unless its purely cosmetic problems and you can personally support the debt. Pure cosmetic flips these days are a rare breed.

@Ryan Saldanha

Have you attempted to work this out directly with the contractor? I'm not from Tampa, so I'm not familiar with the turn around for their building department. I've had this same issue just recently (bedroom without a window) and had plans kicked back. Everyone knows that the bedroom has to have a window, the architect just forgot it. 

So, if you go with Option 1, what do you do if he just ignores you and decides not to perform any additional work? Even if you take him to court and are awarded damages, do you have a plan in place to collect? Most contractors don't have much in the way of assets to go after. This is why a little more research is warranted - if the contractor isn't licensed or has significant assets, you have little leverage over him and you need to take a much softer approach. If he does have items you can legally go after, then maybe the lawyer is correct and hitting him with the stick might do the trick.

Option 2 seems like a waste of time to me for no potential positive outcome. You're basically giving him free reign to take a long as he feels like in writing, which is worse than your current situation. I assume that your take away from this is that you won't have to pay him the other 50% and can look for a new contractor after, but if he completed half the job, he's likely to complete the other half. What did the lawyer say the upside was to this?

With either solution, you should end your work with them as soon as possible with the minimum in losses. You can also approach the contractors and try to 'settle' and only pay them for the work completed. This is particularly problematic on your second situation, as you've already fronted him way more capital than he has performed work. 

-Christopher

Yes, there are companies that will list things online as well as companies that will sell things locally. Just do a search for estate sale companies or sell my stuff on eBay and I'll sure you'll get some local results.

-Christopher