All Forum Posts by: Dustin Phillips

I read books and went to one boot camp (Steve Cook) and just took action. I quit my job and had to pawn some items to get the earnest money to do my first deal... Well it was really my third deal, but that is a long story. It was very difficult in the beginning and there were a lot of sleepless nights. However, for me jumping in head first made me focus and stop making excuses. This story below also helped me to take action..

In 210 BC, a Chinese commander named Xiang Yu led his troops across the Yangtze River to attack the army of the Qin (Ch'in) dynasty. Pausing on the banks of the river for the night, his troops awakened in the morning to find, to their horror, that their ships were burning. They hurried to their feet to fight off the attackers, but soon discovered that it was Xiang Yu himself who had set their ships on fire... With their ships gone, the soldiers had no route of retreat. Winning was the only option.

This story helped me to fight on while my fears lay burning and gave me only one option-win! Understand that this worked for me, and it is not for everyone. Judge your own risk tolerance. But realize action, specific action is needed to move forward!

We put tile in all of our units. Last longer, and is easy to cut out one tile if it gets messed up. Vinyl has to be ripped up each time.

Sure let me clarify...

Playing ball is simpley means finding a title company that will do the double close with your buyers funds. Most will not. If you do not have one yet, you are going to hear "Thats illegal" a lot. However, its not illegal as long as you are not defruading a lender. Simply move on... Ask other invesotrs in your area who they are using.

To your second question, yes... But again I have been in closings where its been tense and the seller was not happy about what I was making, but we get through it. I will say that with $50 grand, just go the double closing route, but use the assignment when you can...

Hope this helps...

Hi Sid,

Its late here so bare with me, but lets walk through the two.

Scenario 1- You will need an option agreement. Basically you say to the seller look I like the property but I'm not really sure if I can sell this. I want to put an option to buy on your home, and see what I come up with. That gives you time to find the end buyer. However, many buyers are not crazy about locking up their property without cash, so you can offer an option with the first right of refusal. Same thing but if the buyer finds a buyer it gives you the right to buy it or let them sell it. As far as selling it to an RE agency, um no. Realtors will list your home, but are not in the business of buying your home. Now some Realtors do buy, but I would not count on that. You need to find cash buyers first, and just ask what they want and go find those deals... Here in Indy I call my buyers every week and ask what they are looking for. Then I focus on finding those deals...

Scenario 2-Just do a double close. Then you can collect (via close) the "$200k" from your buyer and then close with the seller for "$150k". You just have to have a title company that will play ball and accommodate this type of closing, and your buyer will have to have cash, Hard-money, portfolio loan, or if its a private seller just assign the deal and skip the double closing.

So:

Find Your Buyers/What do they want
Find a title company that will play ball
market and find deals
put deals under contract
sell(double close) or assign deals
collect money
repeat!

Now above is a general overview, but just take it one step at a time and don't let the process over-load you...

Good Luck!

If you are using conv. financing then yes you have to wait on seasoning. Meaning if its an REO you must close first, and then sell it to your buyer using conv. funds.

However, if you want to do a double close than you can sell to your end buyer as long as they are bringing cash, or financing that does not have seasoning requirements, e.g. portfolio loans.

You close with your end buyer, and then with the bank the same day. The key to doing this successfully is finding a title company who is willing to play ball. Good Luck!

Listen to Ryan regarding the comps.

2miles is almost like asking "Will someone please scam me!" Not literally, but I know that if your working in low value neighborhoods I would not cross any major streets, railroads, and stay as close to the subject home as possible...

Quick example. I see some sellers stating that their homes are great deals. And they are looking for people who do not know the area. Here in Indy you can be on one street and its a war zone, make a right turn and blammo $200k homes. That can lead to big trouble if you buy into that without prior knowledge of the neighborhoods.. So bring in that comp, and it should keep you safe...

Contingencies--- I have none. I've done all the homework I need to before I make an offer, and if you know the area, and your exit strategy you should be golden! Good Luck

Just to build on the good advice Will gave.

Hit your local investors meeting. When I find time to go here in Indy there are two or three vendors there from mortgage companies.

However, if your looking for money to line up for yourself or for your buyers, you should be going to small local banks and looking for portfolio loans...

If someone is saying this market is too risky they do not understand investing and will miss the boat...

Just be direct with your "team" tell them what you are going to do and if they don't like it- thank them for their time and walk to the next. "Dime a dozen" is right!

This business will take time to get everything together, however, that is if your activly investing. If your waiting it will take forever! Now hit the street and get the team you want and leave the complainers on the side of the road...

Hi Suzanna,

Why wait for all of your "admin" stuff. Start making offers tomorrow. Just put them in your name. I have three LLC's and I still make offers in my name. It is fine to want to have everything in place and on some things it is nessicary, however, bank accounts and admin stuff should not keep you from putting in offers to get deals. And you can build your team while your moving forward... You will learn this business a lot faster by doing, than by waiting... Just my two cents, and good luck...

The thing to keep in mind is you want to use comparable properties to determin value. Like Josh said your SFH comps are not going to match your Duplex, so you'll need to throw them out.

You know that your duplex will rent for at least $1100 fully rented. And you have an idea of Taxes. Insurance is around 10% of the ARV and 10% for property management. So you can start to put numbers together. I would contact property managers in that area and get as much info as you can about rents, the area, turnover, and ask them if they are looking for more properties, or if they know anyone... Start networking in the area to build buyers!

Dustin

First off congrats...

Now, what type of neighborhood is it in? Is it a War Zone, on a scale of 1-10... The $37.9k sounds high to me, but that is only because if Im picking up a duplex that needs $20k in rehab here in Indy, I'm looking to get it for $5k-$7k and selling it for $10k $12k. However, this is because of the rental rates in my area. So, if they are higher in your area than that price may be fine. You need to work backwards and think about your end buyer. Put all of the numbers together, rents, payments, taxes, ect. and set it up so that it sells quickly.

Lastly, make sure you get your renovation cost down. Since we make our money when we buy it is a wise decision to spend some time getting all of the repair cost together, and it will make you more efficient when you go look at properties by cutting down on your time trying to figure the cost out. As an example I can walk through a house in less than 5 min and I'm always right on target or I'm just over what my contractor charges... However, when I first started I would spend a half hour trying to figure everything out...

Good Luck and don't forget to post your deal in the "Property Section" here on Bigger Pockets!