All Forum Posts by: Rachel Johnson

Thank you Mitch for your advice and education!  You've opened our eyes to an area we need to learn more about obviously!  We had not thought of doing it this way; we thought we would begin rehabbing the house once he got out and the deed wouldn't pass until we closed upon selling or refinancing the house, land contract style.  I do see that our fears revealed real risks based on what you said.

To finish the story on this opportunity, it was not a deal.  The seller was very rude and argumentative, no small talk at all.  He launched right into politics, wouldn't talk about anything else, monopolizing the whole thing, basically yelling in our faces for 40 minutes about it!  He was very hot about the election results. Very different from our 1st meeting.  We almost walked out, but then we finally got him to shut up long enough to talk about his house.  He obviously is not as distressed of a seller as we were led to believe.  He is going into rehab for alcoholism for 90 days, and said he just wanted to hear our "schpiel".  There are a lot of things to unpack in there, that I'll just leave unsaid.  He finally told us his mortgage balance was 50k.

Even though that was a very frustrating experience, we did learn from it.  I appreciate your advice to not be timid about getting that mortgage balance number.  We truly could have saved ourselves a lot of trouble if we knew that sooner, but we were trying to be respectful and sensitive, gain trust, etc.  So this teaches us how to read people a little better, if they're truly wanting to work something out vs just waste our time.  And to go ahead & walk out when necessary!!

Thank you for the invitation to call you!  Look forward to talking to you sometime soon!

Hello I'm searching for this answer also and have begun searching through the threads when I came upon yours.  I see you received no answers here.  What happened to this deal?  Did you get it?  What did you learn?
Thanks! Rachel

Some background...For the past 4 years, our investing experience has been exclusively purchasing & flipping homes, mostly off the MLS, most have been foreclosures, working on our 10th one now. Our goal has been to flip to grow working capital to eventually begin BRRRRing.

We were just approached to consider purchasing a neglected home from a distressed seller. 
Outside our comfort zone...time to grow!  Time to exercise what we've been up to now only been learning/hearing about...

We are preparing for a second conversation with this seller, and to present numbers. In our previous conversation, we discovered he is willing to accept a small down payment, monthly payments to cover his mortgage for the months while we rehab, and pay the balance after we refinance or sell it. We've determined ARV should be $110-120k if market stays high. It's a 3/1, 1066sf, decent area. We estimate $40-45k of rehab, $10-12k for profit, and another $8-10 for selling/refinance/holding costs, leaving a purchase price of $40-50k.

We have yet to discover his equity in the property, but expecting it to be pretty high considering he's lived there 20ish years, therefore I also don't feel too worried about his loan getting called due, since we should be in this arrangement for less than a year. But we don't know much he'll walk away with. In our 1st conversation he didn't want to tell us his mortgage balance, but I kinda jumped the gun and asked that question way too soon.

This being our first time to work directly with a seller, we're a little uncertain how to approach the seller with our offer.  Also, we're concerned about the risks we've never had to deal with before, such as:

1-how do we ensure he properly pays his mortgage and property tax payments while we rehab and not pocket the money instead?

2-how do we ensure he completes his end of the deal, i.e. he might change his mind once he sees his house getting fixed up and decides he doesn't want to give it up

3-how do we protect our rehab costs/our vested interest until it's fully ours?

Thanks for your advice!

Need some guidance/advice!  I am in negotiation with the attorney who is processing the foreclosure of a property I would like to purchase for rehab.  I have the option to be assigned the note and become the mortgagor, which would then give me opportunity to take control of the foreclosure process.  There are no occupants to evict.  The investor/owner, who was going to flip as investment but now is not, is an out-of-state investor, and wanted to sell it anyway.  Technically it's abandoned, so I could get the right of redemption reduced as well.

My question is how does one foreclose? What are the benefits/risks of foreclosing?  I'm told it's tricky, but it can be done and I'd like to learn.  What do I need to know going into this?  Also, I am very interested in the tax benefits this could provide.  My other option is to let it go to sheriff's sale and if they are the highest bidder, they will deed it to me with sheriff's deed, which I know is a lot safer/easier for me.  But I'd still like to know my options.  Thank you for your response!!

As a seller, let's say you have accepted an offer, buyer's financing is all approved, everything is  ready to close, just waiting on the final title/paperwork/close date, but then there's an issue with the title and it will delay the close, few weeks, few months.  Would you ever consider renting to this buyer prior to close? Why or why not?

Wow thanks for the welcome everybody! John Dudas, yes fairly local, although one was just inside Ohio. I'd say within a 40 minute drive radius is fair, although where we live it takes that long to get much of anywhere!  Thank you for the invite, Keri Middaugh, although I'd like to find something closer to Hillsdale or Adrian, so if you (or John Dudas) know of any out in those boondocks...!  Ryan Werner, yes the Market is just a few miles from us and I lived my senior year of high school (long time ago!!) in Monroe myself.

I would appreciate learning what ya'll do for accounting/tax strategy expertise. Do you do it yourself, do you hire a firm, does it specialize in real estate only, who is the firm you use, what kind of cost should one expect getting started, etc. I like to do my own bookkeeping & record keeping, and have done my own taxes up till now. We have a LLC for my husband's contracting business. But now that we're flipping...I realize we have a new game and I need some recommendations for professional guidance. Thanks!!

Hello ~ Greetings from southern Michigan, David & Rachel here, just starting out.  We are husband/wife team doing repair, remodel, and renovate for others while obtaining homes to do the same and to flip to first-time home buyers or start-overs.  We've never seen the TV shows, just always had interest in doing this, and after losing our home back in the '08-'12 ordeal, we wanted a way to help others in need of a home. Once husband got his contractor's license, and a tiny inheritance for starting capital, a whole new world of possibilities seemed to open up to us.  We had hope for the first time in a long time!

We need to learn a lot still in setting goals, getting structure and taxes in order, and the whole employee thing figured out, OSHA? etc. but we are here to learn and glean and grow!

As far as real estate experience, we've currently completely flipped one, almost closed on the 2nd, currently rehabbing the 3rd, and waiting for a close date for the 4th.