All Forum Posts by: Charlie John

thanks for the replies @Vanno Vong @Percy N. and @Robert Wilson  

I agree with everyone's comments. My real question is: Is it bad etiquette to tell your realtor they have the listing but then go try to sell it yourself and one of those strategies is calling other agents that might have buyers? Yes I would pay the buyers agent a 3% commission. 

I told my realtor I plan to sell it before we finish renovations by fsbo. I did not say that I would call other agents to inform them of the property and that if they have a buyer, please bring an offer. I just thought about the option now. 

If I didn't get any luck with those methods, then I would list on MLS thru him.

Is that bad etiquette? It's my friend but hey it's real money on the line too. Let me know 

Hello BP,

Would like to get your opinion on a situation I am in.

I am currently flipping a house that will be a turn key ready product in a great neighborhood. The inventory in this area is (like everywhere else) very low. I believe it will have buyers ready to make an offer once available because I will price it slightly under market value at $175,000. I got this property directly from the seller thru direct mail.

I do not have my license but I know that I could market the property myself (flyers posted locally and craigslist) and try to secure a buyer. That is my plan while we are doing the renovations. I want to build a list of potential buyers and then when the renovations are complete, I can have an open house for these people and they would get first shot at it. I would be saving $10,500 by selling direct to buyer.

If I don't find a legitimate buyer with that plan, then I will list the property with my realtor who has also been a long time friend. I have told him this and he understands where I am coming from. 

Here is where it gets tricky:

- I also know a lot of other realtors in the area that perhaps have buyers for this home. Should I reach out to them and offer to pay 3% commission if they bring a buyer to me? I feel my friend would be upset with me if I did that, but in all seriousness its about the bottom here. Saving the listing 3% would be $5,250!

What would you do in this situation?

Thanks BP!

Fear = False Evidence Appeaing Real

I just had to explain to a worker of mine who hadn't filled a dumpster before how to do it. 

Think Tetris. Fill hallow spaces with rubble. He nailed it when I came back to check! 

I like your video! 

@Mike Clancy

I would love to have $2,000 month in funds to put towards marketing. 

How long are you going to be able to sustain this? 

I market to only 1 list- my custom built driving for dollars of distressed properties. this makes my list size smaller and more concentrated. I truly plan to mail these people for years until they either tell me to remove them or they sell it to someone else. For example, I market to a zip code with 28,000 people. I have driven every single street in that zip and made a list of the owners that have been there longer than 15 years (based on county website that shows last sale date). This list contains 438 properties with that criteria. I look for houses that need work. If I continue to mail this list over time and over the years, I know I will get a lot of deals! Plus every time someone calls, I already know I would want to buy it because I selected it so I can screen them easier. 

It's a shh ton of work but it's what's creating the foundation for my business. Just focus on whatever you are looking for and know that it will take time. 

I do like your list criteria but a lot of those could be retail ready houses and be a waste of your time and money. Everyone I send mail to is worth sending to because they potentially have equity and have a distressed home. That's the combo you need. Good luck!!! You got it! 

Hi @Acencion M., I think builders are willing to pay a little more (than rehabbers) for the dirt since they plan to scrape the house and create a new set of value.

Do a search for all of the new construction houses built in your older neighborhoods (most likely they were tear down houses before the new house). Then search for the sales history on each property. You will see a floor price for which builders bought these houses for. Organize the data and you will easily be able to see what the value of a tear down lot is to a builder. If you want to either wholesale the property to a builder or build a new one yourself, then just buy at a discount to that floor price and you will be good!

Thank you for all of the responses! @Jay Hinrichs, @Cameron Tope, @Ryan Dossey. All people who really do this business and opinions I value!

I have spoke with my closing attorney about the situation and they know exactly what I am looking to do and are ready to draft up the necessary documents to properly structure this deal.

Today, I am meeting with the seller to secure a purchase agreement for the 90k purchase price. I will inform the seller that my plan is to keep the existing mortgage in place while I renovate the house and then pay it off once I sell the property. Most importantly for them- the past due mortgage will become current at closing and they will get their cash and be done with it (which is what they ultimately want). I will give the signed PA to my attorney and then we will draft up a new document that allows us to close using the "sub-to" strategy and go back to the seller to have them sign the new documents at the end of the week. Attorney mentioned using a contract for deed.

The awesome part is that my closing attorney is willing to answer any questions from the seller just in case they are concerned about the process. 

Jay- after reading your posts, I can see exactly how this strategy can turn into a nightmare for the seller. Blind leading the blind! I am blind going into this.. but because I am committing to this business for the long run, it's important for me to be as truthful and ethical as I can be. It's just easier to do it the right way anyway.

I will definitely keep this thread updated on how it all plays out - how it all gets structured - so that this deal can hopefully help another newbie in the real estate business. 

Hello BP,

I currently have a verbal agreement to purchase a home for 90k. I met with the children over the weekend who inherited the property from mom. The house has already gone through probate and they are ready to sell. They were cleaning most of the junk out of it when I met with them.

At this point, they are 30 days behind on the mortgage and need to sell the property as-is and quickly because they do not want to put anymore energy or money toward it.

I offered them 90k and they gladly accepted. I told them on Monday I will draft up a purchase agreement and we can move forward.

The mortgage balance is 78k.

This house needs about 20-25k in repairs and I expect to retail it for 159k.

A couple questions:

• If I were to buy this house subject-to and keep the existing financing in place, how do they get paid at closing? Do they get a check for the difference? 12k.
• How much would this typically cost to have my title company draft this type of contract up?
• Is buying subject to as simple as changing the mailing/billing address with the mortgage company and now I make the payments for the next 3-6 months until the house sells?

Thanks for any help you can provide. I will continue to search the forums for more information, but it's always nice to have a thread of your own!

set up a website only if you want to send the people reading your direct mail to your site where they can learn more about your offer. 

And no, you need to have all of the calls sent to your phone and be prepared to answer them and talk to people. 

it's what people expect and how you will learn to talk with prospective sellers. It's sales man. 

Why do you need the letters handwritten anyway? because you hear that's what other people do?

You want the address on the envelope handwritten so that the seller sets aside and opens the letter to see what you have to say instead of tossing it in the trash with the other junk!

I would suggest a professional typed letter with their name and address mail merged into each letter. Maybe at the bottom you type Best Regards and then actually sign your signature. 

This shows that you are real and a professional. Not some weirdo writing hi my name is X and I want to buy your house for ca$h. Call me now. 

I do it and it has huge success.