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All Forum Posts by: ROBERT DEHAVEN

ROBERT DEHAVEN has started 4 posts and replied 6 times.

Post: Investor Wait Periods

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

Hi All -

My wife and I are just starting to make offers on properties here in Minneapolis.

We keep running into a fair amount of "HUD Houses" that only take offers from owner-occupants for the first 15 days, sometimes its even 30 days... Of course a LOT of them are gone by the time we can make an offer.

Is there any way around this...any creative way to get control of the property without actually living there..and without breaking the law?

Thanks everyone,
Bob in Minneapolis.

Post: Making lots of offers

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

Hi all -

Newbie here. Pursuing a fix and flip strategy...looking for the first deal. We have made a few offers in the last few weeks but keep whiffing.

I gather that this is pretty typical for a lot of folks in a lot of geographies.

I continue to hear and read things like, "You gotta make a lot of offers" or "We made 20 offers a month for a while before we snagged one."

Here's my question, and maybe I am missing something really obvious: What happens if you have several offers in (different properties) and several of them are accepted...but you aren't prepared to move ahead with more than one?

Great "problem" to have right!?

Do you simply use an inspection contingency or something to back out of the ones that are least desirable? Assign the contract? Other options?

Thanks all,
Bob in Minneapolis

Post: Hard Money vs. Cash

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

With the method above (making a cash offer using personal proof of funds) and having an addendum to use HM financing at buyers discretion...does it matter how the POF is provided?

Is it bush-league to have multiple statements from multiple financial institutions where the total balance is enough to buy the property?

I'd like the offer to be tidy...and just show one statement...but for me to show POF from a SINGLE source it'd have to be a 401k, which I assume is different than a straight equity account or straight cash. To show sufficient POF outside of a retirement account I'd be combining different savings and brokerage accounts which I presume will make things look messy. Is a retirement account (not self directed) even considered in this realm?

Any thoughts here? Or on my lingering questions from above.

Many thanks all,
Bob

Post: Hard Money vs. Cash

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

First - thanks to you all for the excellent and fast responses. This board is a great resource. I know it takes time to reply with a thoughtful and substantive response...so thank you.

Second - I completely understand what Will and Glenn are saying...however, as I understand the terms of the hard money folks I've been talking to, the funding IS contingent upon an appraisal of sorts...contingent on their guy agreeing that the ARV I'm seeking is realistic.

I suppose technically the funding is not contingent...its just that they'll only loan 70% of the ARV. Which is awesome of course, unless the ARV is too low to support both the purchase and a good chunk (ideally all) of the rehab. If the ARV "appraisal" is too low I could find myself in a tough spot or have to walk away from the deal and jeopardize any earnest money I've got into the deal.

So what's my takeaway here...? Is it proper to say that the financing is not contingent on appraisal (but understand that I will just not close if the ARV comes in too low)?

I like the idea of making a true cash offer with an addendum reserving the right to finance with hard money. As long as you can show proof of personal funds this seems like a smart move.

Post: Hard Money vs. Cash

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

Any ideas on how to best position your hard money offer to compete with cash offers? Ultimately...if you are pre-approved, the numbers work, and the lender can close super-fast there ought to be no material difference in the seller's eyes, right? Granted, there are fewer variables with the cash offer...

I'm not confident that all seller's agents even know what to make of a hard money offer (traditional sales).

Any useful language or tactics that folks have used with success?

Post: First Rehab Deal - Twin Cities

ROBERT DEHAVENPosted
  • Real Estate Investor
  • Minneapolis, MN
  • Posts 6
  • Votes 0

Hi all -

I'm new to the REI world...Eager, but with realistic expectations. I've got many of the basics down (I think). Started an LLC, working with a realtor, have a few leads on contractors, etc.

We've made one offer, but they took another based on our having an inspection contingency.

I was hoping to get some feedback from folks more seasoned than me on 2 items:

1) Inspection Contingency: For rehab deals, is including an inspection contingency usually going to be a deal-breaker? In our first case it was a short sale so potentially it was more detrimental in that scenario vs. a lender owner property.

2) Deal Analysis:Based on where I am seeing volume and on where we live, it is looking like our first deal will probably be a rambler type property, 3/1/1 when we purchase..and probably 3/2/1, or perhaps 4/2/1 when we relist.

I'm anticipating when one finally pops for us, we'll acquire it for about 100k, with ARV around 190k. The following assumptions also apply:

- 6 month hold from buy to resale
- 6% realtor commission
- Hard Money loan @ 4 points + 15% APR interest w/9 mo. balloon
- Rehab of ~ 35K

After accounting for some closing costs and other holding costs, my model is showing a "probable" pre-tax gross profit of about $12K, with potential upside to 25-ish if we only hold for 4 months, nail the rehab budget with no overage, get the list price, etc...

Do these numbers smell right to other folks? Would you do deals like this "all day long" or wait for something sweeter?

Thanks folks...great board here!