All Forum Posts by: Dell Schlabach

Buy, Sell , 52

Systematize, Simplify, Scale,

I personally would not be doing business with him at this point, after what he did. I would go direct to the seller and see if there is a way to buy direct. Seller might get creative,  if you offered him 130,000, and the wholesaler might learn his lesson.

Sounds like you may have snagged a sweet off market deal.

Congratulations! 

Not quite sure your question or concern, if you have done your homework and it's a good deal. 

I have only once done an assignment and it was a wholesale deal. 

We sell our wholesale deals to rehabbers with cash doing a simultaneous close. With an FHA loan, don't see how that could work for a couple reasons 1 would your seller wait to close for 30-45 days, otherwise it wouldn't be simultaneous, don't think the lender is going to want to see a 30k assignment fee on the hud either.

Someone asked may have experience I may be missing but I dont see it working to a retail.buyer using a government insured loan

Plus the 90day rule is in effect again on FHA loans so that pretty much knocks that out of the water up front.

We do simultaneous closes on most of our wholesale deals, about two a month. 

Talk to your title CO , if you explain to them what you want to do, they can best decide the methodology.

Be aware not all title companies will do them, but there are plenty that will. 

Using and or assigns you could assign the contract, and you would not have a simultaneous close. Your 30k profit would show up on the hud, on the buyers side, as a "___fee" some buyers might not like to see that.

Simultaneous close would prevent that. 

We use regular local mls purchase agreements, we close with that, no assignment.  Then we have a separate contract with our buyer and close five minutes later. Our buyers close at the same sitting, but we may be a bit unusual there. 

The deeds get recorded back to back. 

We have had some title companies that wouldn't do it at all, one that would need 24 hour period in between. Some won't use buyers funds, others will. 

Things are always a bit complicated until we work with people who make it easy. 

I know that in Ohio an agent has to disclose to buyer and seller that he is an agent any time he is acting as a principal in a transaction

Obviously you need to make sure seller understands you are buying it as a principal and not representing him as an agent, at a minimum.

A  call or email to your real estate attorney should get any other disclosure that may be required for your state. 

Welcome to BiggerPockets, fabulous resource for most things real estate. 

Not in the buy and hold business here, done that and didn't enjoy it much. In the buy rehab and sell business here. 

Most rehabbers biggest limiting step to growth expansion and scaling up is having good contractors or project managers, so your skill set and experience should go a long way in helping you achieve your real estate goals. 

The most successfully rehabbers I know locally come with a significant construction background. 

Good luck in your real estate adventures. 

We don't know what we don't know, I agree having a good septic guy is important if you are rehabbing in areas with septic systems. My guy has saved me a LOT  of money and headaches. 

Our group rehabs 40-50 houses a year and roughly 8-12 a year fail when we do a septic inspection when we buy. 

Yes we always write a septic contingency in when we buy properties if the property has one. 

About 90% of the time we are able to get the banks to give us septic credit to replace the system. 

If soil doesn't perk in our areaI,  am always glad to hear it, because then we can install an off lot aeration typically around 9,000, which is significantly cheaper then systems with leach lines. 

Even with leach lines we have never been more then 14,000. 

If you ever need to replace a system I would get a couple more opinions and quotes from installers. 

One strategy you may want to think about is buying a home during the owner occ period. 

In the greater stark and summit county area that we watch regurlarly there are a significant  number of hud deals that dont need much work, priced very low that always go to owner occ before we can buy as investors. 

Buy one if these and do as much work as you can yourself, sell it in a few years. Should be able to make 40-60k+

One of the guys that works for me bought one for 36,000 put about 10 into it, bunch of sweat equity himself and friends the first month before he moved is young family in. Today about two years later he could sell it for 110-120.

I think this strategy is one of the least risky that can add a lot of income with minimal work, and gives you experience rehabbing. 

Doing one of these every few years adds a a substantial chunk of  income.

I

At this point it looks like you will be somewhere between break even and making 20,000. 

I would do my best to keep costs down, get the rehab completed asap to keep the cost of money at a minimum. 

I would much rather be at break even, feel the pain, learn my lesson,  and move on  then refinane a property that doesn't cash flow, and drag the pain out for another 10 years or more and hope to break even then.