All Forum Posts by: Geoffrey Lessel

It's been awhile since I've been on the forum, but I see that this topic has continued in my absence. I appreciate everyone's encouragement! Wow!

As an update, the house is almost renovated (it was a burnout) and I'm planning on walking through it with the guy I assigned the contract to next week. I'm excited to see all the things he has done.

As for me, I'm still looking for the next deal. I was in the middle of a short sale deal that seemed to be going really well when the bank sold the house at auction out from under us. Neither the owner nor I was told of a date of auction and it seems that Chase's right hand didn't know what the left was doing: I was walking through the house with their appointed appraiser (BPO) 30 minutes before the thing was sold. The whole thing was odd and disappointing.

Right now I have 3 in the works, though 2 of them haven't made up their minds to go with me quite yet (still "looking at other options") and the other I'm a bit hesitant about because the current owners want me to owner finance it back to them. They had great payment history for 14 years until this medical emergency put them behind and they have a Realtor friend who has already worked out the short sale with the bank -- they just won't let him buy the property because he is such close friends with the owners. I'm trying to think up something creative where I buy it from the short sale, sell it owner-financed to the owners and sell the note to the Realtor (who really wanted to owner-finance it to them anyway). Maybe I can walk away with a could thousand. ???

Anyway, thanks again and good luck to those who are still working towards their first. Is it a relief to get it behind me. It will be another relief to get the second behind me, too. =)

My first deal closed today and I just deposited my check into the bank. Here's how it went down:

I found a burn-out that was being advertised for $15k. I saw the ad in the morning, went to look shortly after lunch, and agreed on a verbal offer that afternoon at $13k. It needed to be gutted to the studs on half the house and the roof needed replacing. The comps in the area showed that it would retail for ~$90k-$100k after rehab. Through another investor in the area that I had met, I found a guy who wanted to do the rehab himself. I ended up assigning the contract to him for $6500 a week and a half ago and everything closed this morning.

I am, of course, quite excited to have my first deal behind me. It helps that it was a quite profitable one!

Thanks to all the posters here that provided me information without even knowing it and for the encouragement in these pages.

So, things are going very well right now. =) In fact, I should have another signed contract on another opportunity this afternoon...

-geoffrey

Thanks to all that have replied. I will say that I found some other investors in the area and a REIA club meeting has taken place (finally!). We are in the organizational stages at this point, but there is activity.

The current website is http://lrreia.com/ . Note that when I say current, I certainly don't mean up-to-date. It has actually fallen on me to update the site and help maintain it, so soon there should be a redesign and relaunch. If anyone is interested in central AR, please contact me and I'll let you know when and where the next meeting is.

MikeOH

Thanks so much for your help so far. Do you know where I could find an example purchase option contract? Is it two seperate contracts: one purchase agreement and one option to exercise that agreement? Or is it just one?

I am currently talking to ~3 different owners and I think that this kind of contract may be the ticket to my first deal...

Right. That's what I meant! :lol: Thanks for trudging through that and sorting everything out. It was making my head hurt, too.

So have you ever done one? Do you have a contract example or know where I could find one?

I have read somewhere (and after a full afternoon of searching, can't find where) that you can negotiate a deal with a Purchase Option contract. Basically, you sign a contract that will give you the option to buy a property for $x in the next y days. It is usually non-exclusive.

You then do some marketing yourself on the property, find a buyer willing to pay $x + $z for the property and assign him the purchase option contract for $z - $x in consideration to you. So he pays you $z - $x and buys the property himself for $x. Does that make sense?

Is this possible? Has anyone done this? Can anyone point me towards contract documents that deal with this? Most of the options I've seen deal with leases.

Well, like I alluded to in my post, the property is cash-flow negative right now and is going to be much worse when the ARM adjusts in May. I think that rules out lease-options and subject-tos, correct?

My ideal exit would be a quick resell at retail. I want as little money in this as I can have. None sounds nice. =)

I got a call from a lady today in response to an ad I had on Craigslist. She moved out of the city a year ago and has a tenant in her house (his lease is up in May). She said the magic words on the phone "I just want out. I don't care if I make any money." =)

According to her, she has $70k left on her mortgage. From the analysis that I've done (which was through RealQuest), I think the house is worth ~$90k. In fact, there's a house just 4 doors down going for $93k. She said that there shouldn't be anything to fix up, but she hasn't been to the city in that year she's been away, so she can't confirm. I did a drive-by today and everything looks really nice. Roof looks perfect and the yard is even nice!

Her mortgage is an ARM and is about to adjust. She is afraid of going into foreclosure. I think that fact rules out a lease-option, correct? I'm not sure rents would cover her newly-rated mortgage.

Is this a good time to option? This would be my first deal, so I'm just looking for advice on how to proceed. What questions should I be asking?

Is it like real estate agents where I need a broker-type person above me? Or can I just go out on my own and do appraisals when I feel like it or just skip the job part of it if I'm more interested in my own investing activities?

Thanks for all your help.

I posted this in another forum, but wasn't sure which topic it should be under. Hopefully I'll get some responses here:

I am just getting started in the whole REI thing (excited!!) and some of the people I have talked to have said that becoming a licensed realtor is a good way to learn areas and start out. I'm not a fan of that idea at all. The whole point of me going out on my own is to be more flexible and have my nights and weekends reserved for my family. The idea of tromping around town with buyers at a moment's notice 7 days a week is the opposite of appealing to me.

So that brings up the question -- would it be just as good to become an appraiser? What is the life of an appraiser like? Don't they have the same MLS access that realtors do to allow them to do their work?

If anyone is an appraiser, knows an appraiser, or just generally knows more about the profession that I do (that would be about all of you), I would love your input.

Thanks!