All Forum Posts by: Christopher Vargas

@Rob Jones Thanks for the response. Will the title company take care of the all the paper work, including contracts and promissory notes? If she agrees to negotiate terms, I will need some signatures of course, but where can I get these forms?

@Rob Jones & @Malcolm Brown

Follow my discussion that I JUST posted. Rob please chime in if you can. Thanks

https://www.biggerpockets.com/forums/311/topics/288463-need-seller-financing-help

Hello BP, I have a deal about to go under contract, but hard money lenders will not loan the full amount required for the rehab & flip project.

The seller has an outstanding mortgage of $53k. I can borrow that amount using hard money with no problems. But if I do, that leaves $57k on the table that needs to be paid to the seller.

(Note: lenders are offering a loan amount no greater than $90k with 3 points and 13%. I only have $20k in cash reserves and a purchase price of $110k. If my numbers are correct, the total cash in the project would be $120-125k. I need $100k from a lender at the bare minimum. This is why this deal would not work for lenders.)

The property needs less than $10k worth of work, and can be flipped for a reasonable sales price within 3 months for $150 at the minimum.

How can I present this to the seller that would be beneficial to both of us? Are there any specific contracts that I could find here on BP?

If she agrees to seller financing for the remaining balance, WHAT NEXT?

Congratulation @Pavlos Kasselouris!  Very nice acquisition. I understand you are in South Florida, so if you need a good guy to help with all the rehab, my father-in-law does amazing work at the lowest prices possible. He currently works with 4 other investors, myself included, but this month has been a little slow for them, so his work has slowed down as a result. Shoot me a message if you want.

double closing will work just fine

I am negotiating a sale price from the moment I answer the phone. I will get all the pertanent info over the phone and tell them I will give them a call back shortly so that I can look up county records, sales history and comps. Call them back and find out how much they're looking for and we go from there. We end the call with a flimsy sales number to leave flexibility for the rehab work needed etc.

Good advise @Sandra Edmond. I thought about door knocking too but just didn't have time for it this time around. Its a great idea to initiate direct contact with potential sellers.

To answer your question, I mailed out around 230 letters to potential sellers. Still only three responses and now in the 2nd week. I will be mailing to my list once a month for the next 6 months. If I can close one more deal before than, I will use some of the profits toward a larger list.

UPDATE:

The lady that fell ill in Kissimmee have stayed in contact over the past week. I found out that her outstanding mortgage balance is $96k. My max offer to her was $110k cash and close within 30 days (ARV $150k). Unfortunately, she did not pay her attorney this month so this may drag on another week or two before I can get the contract signed while the paperwork settles.

If anyone has any advise on this situation, it would be greatly appreciated. Any real estate attorney wanna chime in?

@LaSaundra SpencerYes thats all I did.

Thanks everyone. 

Here is what I've found.

Every single call is a potential deal. Out of my 230 or so mailers, I've had 3 calls total the first week. The one in Lakeland, FL that turned a ghetto house into $1500 cash in my pocket, the call from Kissimmee, FL that has a $10-25k flip potential, and one message asking to take their name off the list (which is better for me because I don't want to spend anymore money marketing to people who have 0% response rate anyways).

Just be light and conversational to your sellers and buyers

You make your money on both ends of the deal, so negotiate the heck out of your seller's price (but be respectful and don't risk losing it) and use a realtor to give you true competitive comps on your sales price so you have supportive evidence for your price and cant get haggled too far down by your buyers, because they will try.

Every cash buyer on my list wants their deals to be acquired at 70% of market value, including purchase and rehab. Do this for them and they will keep coming back. Even if they don't buy the first or second time, theirs always the third time, etc. And if you're bringing deals like that to their ballpark, you won't have any problems.

I sent out 212 letters to Listsource absentee owner list and 20 or so letters to distressed houses I found when driving for dollars. Always have your eyes open! I take a lot of backroads for that reason. They are there just waiting to be cherry picked! For me, I keep it simple. I take down the address and look it up on Zillow to check out photos and past sales history. From Zillow I follow the link to the County Website and this is where I find the owners name and mailing address. If the owner's mailing address is different than the property address than BINGO! If not, I will refer back to my photos and probably mail to the owner anyways. You never know.