All Forum Posts by: Dominic Jones

Property is under contract. Will be looking to meet with my mentor to discuss the next steps. Going to start up a new topic to ask further questions on marketing to buyers, setting the right price, etc. Thanks again everyone who responded and helped me out here.

I never been to one of the seminars although I was tempted to go to the one closest to me in Harrisburg back when I joined BP and really started researching real estate in February. I couldn't make it because I hadn't gotten my license back yet and didn't find anyone to go with me. I started networking on my own and ended up with a group who had already bought into Fortune Builders and shared it with me to help make me more knowledgable and be able to contribute more to their mission. I haven't gotten through it all yet but for someone completely new to real estate I do believe it is beneficial; however, since I didn't pay for it, it is that much more of a win for me. I wouldn't advise paying 10s of thousands of dollars for access to it though.

Originally posted by @Mark Gallagher:

@Dominic Jones

I didn't intend to point out how much you would be making, rather that you'd be trying to resell it at the max amount investors are willing to pay in your market. 

Also, beauty is in the eye of the beholder. The seller is saying that it only needs "a little" work. But that could certainly turn out to be false. Get over there take some photos and let's take a look at it. 

Also, do you know why the owner is selling? Tired of landlording? 

 Appointment for the property walk through is set up for tomorrow at 6 P.M.

I spoke to my mentor this morning and he cleared up the contract that I will be presenting to the seller.

Seller is selling the property because, and I quote "That's my business buying and selling houses."

I explained today that I'll be looking to assign the contract and market it to my buyers list. He said it was fine and asked for me to put in a the contract that he will also be marketing the property and if he finds a buyer, we will give me the opportunity to exercise my option to buy and if I don't, move forward with his own buyer.

So it looks like it is all working out. Time to flex my marketing muscles and find someone who wants to pick this property up.

Thanks again for the help everyone!

Originally posted by @Mark Gallagher:

@Dominic Jones

You're going to put under contract at $13K and hope to assign it for? $2K? I just think your margins are a little thin here. If no one was biting at $17K, is $15K really going to make people jump on it? You say that's the max amount investors are paying in your market. I would make the assumption that it will be hard to sell for $15K. 

How much does this place need in repairs? What is it worth after repairs? What can you get in rent? Does the seller own it free and clear? I would be looking to perhaps take this down an owner financed route, rather than assigning it. 

Yes, the margin is very small; however, I need capital. Any is more than what I already have. So I'm willing to cut out this niche for very small gains just to build up capital to put towards marketing and re-invest into my the other strategy I want to operate in being multi-family buy & holds. I'm actually asking for less than the 2k on this deal. I believe the 15k will get people to bite on it, and hopefully with my mentor that I'm working with, he may be able to even sell it still at the 17k original asking price and increase the margin.

I appreciate the input. I haven't been to the property yet but I'm in the process of setting that up so I can go through a checklist and figure it out. The market rents in this area are between 550-750.

I believe the owner does own it free and clear, but I haven't thought of the owner-financed route as an exit strategy. It is one that I will now consider, and can offer paying between the 13k-17k range now if I'm unable to find an end buyer to take it off my hands. Thanks for your input, any more would be very helpful.

Originally posted by @Guy Gimenez:

@Dominic Jones

Regardless of what contract you end up using, I think you're aware that you won't understand what you're signing or how to convince a seller to sign something you're completely unfamiliar with. This is the wrong foot on which to start your journey. 

Do yourself a great favor and network with local, seasoned investors and bring potential deals on which they can partner with you. You will learn contracts, contract law, negotiations, acquisition and exit strategies and so much more.  

Guy, I understand your concern and I appreciate it.  I am already working with some seasoned investors in the area I just wanted to ask the forums (which I also envision as being a mentor) and see if I can get more answers and opinions. 

Originally posted by @Christian Marin:

look for your state approved sales contract that the realtors use. You can usually do a Google search for it. Here in Florida it also has an assignment section where you can select to assign it or not.

Thank you very much Christian, I've found the form online and am reading over it. Tonight, I'll be reading a lot about contracts and getting familiar with it. I appreciate your help here. I voted up your post. The PA sales contract also has an assignment section 

Originally posted by @Micah Copeland:

@Dominic Jones

Ya know I hate giving people contract advice unless they were here in my market. With that being said you can find contracts in the file place here on this site, and I definitely recommend going to your local REI meeting and networking with local wholesalers and see what contracts they use.

 Micah, thanks for your response and input. I have downloaded my 4 total contracts for the week so far (still using a basic subscription here on BP).

The ones I downloaded were the following:

Wholesale Purchase & Sale Contract	3704	34.5 KB	Gladstone Rennie
Assignment Of Contract (Wholesale)

Standard Purchase & Sales Agreement	1077	111 KB	Chris Piper
Assignment of Option To Purchase	876	35.5 KB	Brian Gibbons

Some were more helpful than others, but this is the first place that I came to look. I suppose it may have been more helpful I tried to tickle people's keywords by stating I am looking for contract help specific here in PA, Pennsylvania.

I have found another motivated seller who is willing to get rid of their city property for 13k minimum (market in my area for city property for investors to pounce is 5-15k). He had it advertised for 17k. So it fits the $ range of what I'm willing to get under contract and market to buyers.

Property needs full rehab on the bathroom, appliances and cosmetic work for the kitchen.

I have started looking up contracts but I'm just not very familiar with the language and which contract I am to use to tie up the property to then give me comfort in marketing this deal as "my deal" to my buyers list.

Should I be using a assign 2 contract or a regular sale and purchase agreement? I'm really confused but if anyone could offer me advice here and links to contracts they use for this stage of the deal, I would greatly appreciate it.

Originally posted by @Bill Gulley:

LOL, the only way to acquire a property with no credit extended or cash is to have it given to you or trade for it.

Joe's master lease is a good solution, but understand, a lease or promise to pay future payments is an extension of credit!

The time wasted with pipe dreams and how to get something for nothing you can actually learn the basics of real estate, the business, not how to move shells around for some convoluted ploy that in reality is likely never to materialize. Elephant hunting with a sling shot.

Reality check: If you owned an apartment building would you let someone off the street with no RE track record lease your entire building with no money or credit and allow them to manage it all along giving them an ownership interest?  Really???

Land, labor, capital and entrepreneurship, no business transaction takes place without 3 of these 4 functions. You can substitute any one of these functions for another function but you can never substitute land, it will always be on of the 3 functions. Land doesn't have to be the subject of the transaction, but you'll always be located someplace to conduct business, even if it's at your kitchen table on the phone.

Learn the basics or RE and what makes RE valuable, then how to manage those  functions to facilitate a transaction, if you have no capital it will take labor and management to make up for the lack of money. You can't provide labor without skills and you can't manage without an education in that industry. BTW, guru junk is not an education in RE.

Gurus show techniques to use in RE. 

There are many ways to bail out a sinking boat. You need to understand what makes the boat float to chose the right method to employ keeping the boat from sinking, use the wrong method and you're most likely sunk! :) 

 So after reading all this, I'm left wondering if you're point is that zero money down is a "wrong method" or if you'r encouraging the original poster to gain more knowledge of the industry through education and skills for management, the stages of the transactions, etc.?

@Brian Jones, search @Jon Deavers and connect with him. he liked the post I made above and he is a licensed agent in Richmond who is investor focused. I'm sure he will be willing to help you out. Hope this helps.