All Forum Posts by: Marcus Geiser

The questions I have always had in regard to these owner financed deals is how to convey title. Seems to me there always exists the possibility that something, anything goes wrong. Judgements, Liens, etc. I don’t really know so it somewhat based on the unknown. 

What are the ways these deals can be structured?

what protections do you have as a buyer? 

what can go wrong with land contracts, contract for deed, or other methods? 

Investment Info:

Single-family residence wholesale investment.

Purchase price: $25,000
Cash invested: $25,000
Sale price: $58,000

This was more of a clean and flip than a wholesale deal but it had many issues along the way. This was an opportunity to purchase a home near me. I put it under contract and had trouble getting the seller to act responsibly. It is a long sad story. I will write about it on my blog at marcusgeiser.com. After delays in closing I was getting a feel for what the house was worth and received an offer for $58,000. I accepted the offer and sold the home on November 15th, 2022.

What made you interested in investing in this type of deal?

The ease of the transaction. The idea of a contract having value and being assignable.

How did you find this deal and how did you negotiate it?

Drive by.

How did you finance this deal?

Personally

How did you add value to the deal?

We removed the contents of the building 90 yards. Rented a storage locker for homeowner and moved some property there. Basic cleaning.

What was the outcome?

I made an incredible profit at a huge cost personally. Stress cannot be compensated for.

Lessons learned? Challenges?

Rely on your team, be patient, and not get overly involved in the problems that are motivating the seller. Be as helpful, kind, and empathetic as possible but under no circumstances will I not follow to the letter a very well crafted offer.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Rachel Novalesi and Hilary Krescholiek

Investment Info:

Single-family residence wholesale investment.

Purchase price: $25,000
Cash invested: $25,000
Sale price: $58,000

This was more of a clean and flip than a wholesale deal but it had many issues along the way. This was an opportunity to purchase a home near me. I put it under contract and had trouble getting the seller to act responsibly. It is a long sad story. I will write about it on my blog at marcusgeiser.com. After delays in closing I was getting a feel for what the house was worth and received an offer for $58,000. I accepted the offer and sold the home on November 15th, 2022. My company Geiser Home Buyers would like to the Rachel Novalesi and Hilary Krescholiek for their assistance. Only thing better than with with a great agent working with 2!

What made you interested in investing in this type of deal?

The ease of the transaction. The idea of a contract having value and being assignable.

How did you find this deal and how did you negotiate it?

Drive by.

How did you finance this deal?

Personally

How did you add value to the deal?

We removed the contents of the building 90 yards. Rented a storage locker for homeowner and moved some property there. Basic cleaning.

What was the outcome?

I made an incredible profit at a huge cost personally. Stress cannot be compensated for.

Lessons learned? Challenges?

Rely on your team, be patient, and not get overly involved in the problems that are motivating the seller. Be as helpful, kind, and empathetic as possible but under no circumstances will I not follow to the letter a very well crafted offer.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Rachel Novalesi and Hilary Krescholiek

With a hard money loan (HML), if you don't have access to the capital to start the renovations it poses a real problem in managing the project. It points to be stretched really thin. which it was for me. I have remodeling experience, tools and help. All in if it was poker game. If you score well enough for HML you score well enough to get crappy credit cards with $300 limits, I did, do, and have them, unfortunately. You only really need access to enough capital, credit, materials, trades lines, favors, to get the roof materials $4000, or the dumpster for demo debris $550, or whatever gets you to the first draw.

Understand to the day when you get money to pay your contractor. On a larger project we will start with demolition, currently gutting a duplex to the studs, I have a $575 dumpster out front, may need another. Once this job is complete the line item for demo will be complete in theory this could trigger a draw, say payment of $5000 to $7500 upon completion. Your $1200 in dump fees plus 3 guys labor for 5 days $2000, you only need the dump fees up front, as the $2000 is payable from the draw check. This allows you to manage the work flow, use one draw to complete another. Make sure you know how the lender prefers to meet draws, then inform your guys as to how, when, and in what manner they get paid. This way they do not finish up on Friday night at 7:30pm working by truck lights in the dark to get done only to be informed that the check will be available on Tuesday morning. 

If at all possible find a contractor that has experience working with HML.

I have been involved in several hard money, private money, and out of town investor deals. The big deal is always with debt service, managing contractors, gas, electric, water, and sewage bills, garbage bill it sounds trivial but when it is time to write checks all the stuff you know the second is taking you to school for being the new kid. For me it added up quickly. Our last building permit was $455.00

I have access to several properties that fit the 2% rule in Aliquippa, PA and Beaver County. I would love to explore providing turn key rentals. Just not sure how the deal would or should work. At any rate we are out saving 2 houses from condemnation if you would like to stop by and talk come around have some pizza, talk real estate. 

UPDATE: Just arrived home from closing! 

After locating the motivated seller and dealing with her not so unique issues, I acquired 64 Plum Street Ambridge, Pa 15003. Due to the demands of the seller for immediate cash, I performed a lien search with Paige at PV Settlement. Once it came back I knew what was owed and to who. Ended up being $13,940 an amount I did not possess and couldn't borrow. My agent wrote up a Quitclaim deed, we signed it in front of a notary, I filed it at the County, I owned the house and the liens. 

Once the deed was filed I drove home and listed the property on Zillow as for sell by owner $69,000. The calls came streaming in, offers as low as $24,000 came in, lots of requests for owner financing, other creative strategies, and then... I got the call and walked through the house with agent, who knows my agent, has bought other properties from my little crew rehabbing them in Beaver County, and made and offer for $58,000, on October, 15th. 

For the record I shopped this deal to dozens of people. Asked about JV deals, requested loans, HML, worked every angle and couldn't even Wholesale the deal to anyone... Even when I was shopping it for $35,000???

We did go in and clean out all the possessions and got it cleaned. Once the buyer made offer we took out carpets as well. This buyer purchased a similar unit from a friend, this makes 2, I'd like to keep this relationship. The more value I ad as a wholesaler the the higher quality investor I seem to attract and retain. I have went to extreme's to get this deal across the finish line. I am a little less than $20,000 into the deal, with lump sum payments and the balance over the contract period. At the end of the day I locked on to this deal and worked as hard and smart as possible to bring it across the finish line. 

Here is my investment analysis: Purchase price under 

CASH: $20,000 - $5000 down, payment of balance over 90 days, clean out house.

                  This $20,000 is an amount I have no idea how I was able to grind up. It gives new meaning to sweat equity.

TIME: 4 Months - From start to finish but not just a regular REI process. Making the payments required finding an extra $20K...

ROI - I have a check from the closing company for $44,847.23 break the numbers down anyway you want, look at %. All I see is the bottom line of I have in 4 months taken my contract to purchase, quitclaim, clean, and close and from start to finish I had a few hundred dollars cash and a contract. Now I got $44,487.23.

Thank for all your help, and thank you for reading my celebration of success. This forum, a couple books, and tireless effort have changed everything.

Marcus
 

Always out and about that way, work mostly in Beaver County. I have friends out that way, don't think anywhere from Bridgeville to WV would be bad... All the South Hills areas seem to be in a position to enjoy the appreciation that will trickle down from all the new homes being built. IDK just seems to be the pattern I have seen. With access to 79, 70, the Casino, Outlets, that area will continue to grow and may out pace even Cranberry Township. Maybe a topic to discuss? Good luck

Update coming soon, have an offer.

DM me I can get you to a FB group that will help. 

Update: I think I have found a Joint Venture Partner that is going to work out very well. We are discussing the details but I think I have a source of funds and a mentor to help with how to structure deals.