All Forum Posts by: James C.

Jason, 

Call a few insurance companies until you get one you like. They should be responsive,  fairly priced and have good companies they broker or represent. 

Once you have done this 273 times, you will know about where you need to be on the 274th one.

Good luck! 

Jim 

Vishesh,

Its a bit tight for my taste. 250k -10K (commish) *.7= is 168k. 125k (purch)+60k (rehab) is 185k all in. Not much room for error here. You are projecting 60 Days on the market, But what about rehab time? What happens if your market time goes to 180 days (or more?)

You are probably looking at a price drop (this is market dependent) of at least the 30 year value of the monthly flood insurance premium, if not more. To get that solve for pv by using the monthly premium as the monthly payment, current interest rate and 30 year term. 

That number is the difference in affordability between a flood insurance property and one that carries no flood insurance premium. There is probably an additional risk premium for a buyer on top of the economic one, but that is anyone's guess. This all depends on what the compensating factors are, say water view, extra land, etc.

The best way is to see if you can find some comps that are in a flood zone, and get a price difference between those and ones that aren't. The difference is your flood risk premium, and you can adjust your building value using that number or %, however you do it.

If you can pull it out of the flood zone with your rehab, then you might be better off to do so. Your title company can tell you how to go about doing that.

Would I buy the deal? I don't know enough to go either way. I haven't seen the property, don't know what it needs for rehab etc. etc. etc. I can tell you on paper, it's pretty tight, and you'd better know what you are in for down to the penny.

Good Luck,

Jim

Jocelyn,

How's the business structured? You can have folks on the deed, but if he is managing partner, and he is the only one that has to sign, then he can do it.

You could try to play the "It's in everyone's best interest to avoid capital gains" card. They might not like each other, but capital preservation is a pretty powerful motivator. Divide and conquer?

They could redivide the properties so that instead of each having 1/3 of a property, they release claims to each other, such that everyone gets a property to themselves to do what they want with it. A minimal exchange of cash between them would compensate for any differences in value. It's a bit dicey if they can't agree on values, but maybe a fee appraisal will silence the critics.

You might end up playing peace broker in this one, or having to do partial owner financing, partial cash out etc. Getting creative might save the day.

Good Luck!

Jim

Chandra,

Have a look at:

Successful Real Estate Investing in a Boom or Bust Market- Loftis, Larry B. Its an older book, but its still got some good information. You can get it for free (ebook) at openlibrary.org.

Good Luck!

Jim

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SanJay, 

That's the place to start. Look for an experienced person as a guide and offer to help in anyway you can.

Figure out what cashflows. Being an hour or so South of Houston and 20 minutes from Freeport and close to the refuges means you might look at Air BNB or get a bit closer to Houston and see what's up there.

At any rate, start by looking around BiggerPockets,  and see what's going on in your local area. Find a property that you think would be good and work the numbers.  Once you do ~150 on paper,  find one that works and buy it. Work through the issues on that one and buy another.  Lather rinse and repeat until you have enough to satisfy you. 

That should be high enough level to get you started.  This business is  best done by doing not by theory.

Good luck! 

Jim 

Isaac,

The high level order of events;

Cold call, set appointment #1 (walk through), go to walk through  (leave brag book, take notes, get as much information from the seller as possible, get photos/videos of proprty, set appointment #2), go back do due diligence (comparables, title search, presentation etc.), return for appointment #2 (present findings, overcome objections, sign deal up).

When I say sign the deal up, I mean put it under contract right then and there. There is a standard NY contract for the purchase and sale of Real Estate that you can either fill out and present on paper, or better have them sign electronically. You set this up between appointments 1& 2 as part of your due diligence. You then present this as part of your presentation as a closing technique. 

Good Luck! 

Jim 

Chris, 

Just a thought, can you make the revocation subject to your actually closing the deal? Something along the lines of if the title is transferred,  the injunction is lifted.

Good luck, 

Jim 

Alex,

It would be helpful to know in reference to what part of the contract you are talking about.

That being said, it sounds like there is an issue with the property, and to compensate you, the seller is going to give you either a credit of money at closing, or lower the sale price of the property.

I'd make sure that I knew from the seller exactly how much the amount was in either case, and exactly what it applied to.

Good luck, 

Jim

Steve, 

First things first. Get your financial house in order. People with money don't like to lend to folks that don't know how to deal with it. 

Think about it this way,  would you give a chainsaw to someone who has already cut off an arm and leg with one? Any reasonable person would say "um... nope". Money, like a chainsaw, is nothing more than a tool. 

With a 6 figure income you should be able to come up with a plan to solve what ever the financial issues are,  provided you (and everyone in your family too) are dedicated to doing so. I would submit that if you really were committed to doing this,  you could live on half of your salary. 

In reality the only way forward is to change your relationship with money.  Learn how to more effectively use it like a tool. Once you can do that lenders will lend, and you will have more real weath than you can imagine. 

I know that it's probably hard to hear,  I know that it's hard to do, but anything worthwhile is hard all the way around. 

Good luck,

Jim