All Forum Posts by: John Stevenson

You are going to have a really hard time wholesaling through real estate listings. For one, the sellers are under contract and you do not want to see what will happen if the realtor figures out you stole their higher spending buyer.

Second, why would an investor that has access to the MLS pay you more for the property when he/she could just buy it straight from the listing agent? MLS Data is very public and is easy to access and most times they are being sold at or close to market value because the agent wants the highest commission.

It is not illegal to wholesale listings but it is going to be a hard sell.

To complete a HUD wholesale deal, you will need to do a double closing. Your title company can handle this for you. If they give you a hard time, just find one that is experienced in double closing.

Also, as to deed restrictions, you should be able to see them on the title. Check with the title insurance company and have your buyer pay for a title search. It is always a good idea to have a title insurance policy anyway.

The offer seems too good to be true. I would wonder why the wholesaler could not find a buyer in his area. Bells, whistles and alarms should be going off right now.

Since you say this is your first rental, I agree with you and advise you to start with something close by to get your feet wet. In this way you will be better able to deal with complications down the road and with rentals there is always complications down the road. Good luck and happy investing.

I am curious, why are you looking to buy properties in Tennessee, Georgia or Texas? Why not look into single family residential investment properties right there in Massachusetts or in a closer neighboring state? In terms of property management, it may be easier to oversee properties that are closer and you are more familiar with the legal requirements.

States mandate how much can be asked for a security deposit. This is usually one to one and a half month's rent. If they are charging exorbitant rent then they just increase the likelihood of further evictions.

I agree with Shanequa J. and Rob K that these are going to be dumpy properties in not so good areas. But, if you factor in keeping the security deposit for trashing the property (common with careless don't pay rent tenants) and you can fill the unit in under 30 days.,then your cash flow is still consistent and the numbers work.

Another option is to purchase investment properties and hold them for a period of time until the market fully rebounds. Your yield will dramatically increase. This could take several years, however, to reap the highest return.

Since cheap property (including foreclosures, REO and short sales) can be found just about everywhere, I would recommend finding markets where rental rates are high. These would include college towns and cities where either industry is expanding or tourism is increasing.

High market rent will give you positive cash flow until the market rebounds and thus increase your yield.

Okay, I start to understand the appeal here. Sounds like a really tight market. The problem is that when you try to flip a non-traditional houses, the risk factor increases dramatically. You like the property because of the low price, but will another buyer, who is looking for a place to live, like the property?

Another option if you have trouble selling, is to consider holding the property and renting it out. Would there be a market for that and how would the cash flow work for you?

Either way I would definitely get an appraisal on this one. Rather be safe than sorry. Let me know what you decide and how it works out.

I am glad you got it. I would hate to have you burn bridges with realtors before you ever get started. This can be a challenging field to jump into. It might be a good idea to look for a mentor or a wholesaler who is looking for a research assistant. Someone who can give you some guidance and experience. At least enough to get your feet wet until you feel experienced enough to go along.

I don't know what I would do in your position. A lot depends on your market. How long has this property been available? If you have a purchase price of 45k and rehab at 45K plus close to 10K in closing costs (if sold for 145k @ 7% fees, you are looking at a profit of around 45K. Not bad if you can pull it off.

I guess if I were you, I would get a hold of an appraiser and see what would be the market value of this unusual property plus how long it will take to sell it. That will give you some concrete numbers to work with.

My first thought is to find out what the land would be worth if it was vacant. Can you split it into smaller parcels? It may be a better idea to purchase the property and tear down the house and sell the land.

Have you figured out how much the repairs will cost you?

Also, you cannot compare an earth home to a standard frame house even if they are the same size. The market is different. Earth homes used to be popular in the 70's but they rarely build them these days and they can be a pain to resell.

If you are looking to purchase this as a personal residence and you plan to do much of the work yourself and you like this type of home, then maybe it will work. If you are looking to rehab the property to resell, I would advise you to consider another property - that is unless you can sell the land as vacant.