All Forum Posts by: Jared Franklin

Good morning, Everyone! 

My name is Jared, my question for you today is where do you find the bulk of your renters when you are trying to fill vacant units? Where do you advertise your units that you feel yields you the most qualified showings?

1. Correct

2. It is a small Job, $13,000, in construction costs. Not a typical deal we would buy but it was a good buy so we figured why not. 

4. You hit the nail on the head with this one and rushing.... The contract had been pushed to the back burner for the last two weeks, our fault. I agree. We also did add into the contract a specific time frame that the property would need to be renovated and sold in which should not be an issue as this is a smaller home and the job is small. 

5.I have a meeting with our lawyer tomorrow at 4, I'm sure this will all be figured out by that point. In our provisions we did go over the construction payments would come out as draws and that after each phase of the job it would need to be inspected to ensure that the scope of work we proposed to the realtor is being followed. 

Good morning!

Hope all is well with everyone and you're all keeping busy! 

I am wondering if anybody on BP could help me out. I am looking for a JV contract for a partner that we have not done business with yet, let me give you a little context.

We own the property, we secured the note and we have title. We decided after we closed on the purchase that we would try to wholesale the property to someone else who would like to renovate and flip. Why? Because we have 18 other properties currently lined up waiting to have construction started, so we felt we should shed a few layers and get rid of some houses instead of flipping ourselves. 

We were approached by a realtor who also does flips and this realtor was looking for funding (which we do). After the conversation we decided to present this property to this potential partner, however we do not want to sell a property of ours to someone and then lend them the money to buy and renovate. When we PML we prefer to lend on houses that an investor brought to us. Since the the realtor does not have the funds to buy + renovate the property we think we have structured the deal in a way that may make sense. We are going to continue to hold the note + title to the property, the realtor is going to do all the reno and pay for the reno with his own funds, the kicker we are going to allow him to keep 100% of the proceeds after settlement - our price we are "selling" the property to him for and some other costs. 

We are in the 11th hour right now and our attorney is reviewing a contract we came up with, however I'm asking if anyone has a JV contract they could forward on to me to review and possibly use. We are located in PA, we understand an out of state contract would probably need to adopt PA laws.

Thanks, and apologies for the lengthy read.

-Jared

@Kalimah Jenkins i understand. 

Just keep in mind, the family member if they decide to purchase and they obtain FHA financing, you wont be able to sell the house for 90 days because of the 90 day flip rule.

DISCLAIMER: I am not a wholesaler.

You have the funds to close on the home, you are a ready and able buyer so i wouldnt see an ethical issue.

Could you have a discussion with the seller to tear up the sales contract, put the home under assignment, you flip the paperwork to your buyer, you make your assignment fee and the buyer closes on the home. 

Wholesaler want to chime in on this? Apologies if i am completely in left field.

@Brett K. 

We have done 25+ deals where the 90 day flip rule was triggered. We have always gone 90 days from the date of acquisition. 

We also just dealt with it again in the dispo of one of our properties. The house was bought 1/11/17 and the AOS was signed 3/20/17 but the house settles on 5/9/17. When a sale is tied to a FHA file # that file # follows that property for its existence (basically) and it is dated and time stamped (a CTA does not fix this).

What we needed to do was have a new contract signed by the buyers reflecting a date that was passed the 90 days (buyer agent had it signed today which is over the 90 days) the lender then will re open it with FHA giving it a new FHA file # and all is good.

As for two appraisals, with FHA if the property is sold for 2x more than what it was bought for the lender requires a second appraisal, always.

@Leland S. renting the property is something to look into. Just be sure to vet the renters well, dont rush into just putting anybody into the house for you run the risk of getting crap tenets who may destroy the house after you just rehabbed it. 

Would you consider a "rent to own" scenerio? I tend to find that if you can find a tenet thats willing to "rent to own" they will do so because 1. they may not be able to obtain financing through a bank so the idea of being able to go this route and secure a home can make sense to renter/potential owner. 2. If someone is renting to own they generally will take more care of the property as they in their eyes believe it to already be theirs.

*^ not always the case and there will always be risk, but also is something to maybe look into. 

Hope it works out for you!

Leland Smith on your next project I would suggest running your numbers for worst case scenarios. When we do our numbers we account for everything- realtor fees, seller assist, construction, holding costs (6 months), taxes, transfer taxes, disposition fees etc. Everything. If the numbers work and make sense at worst case scenarios, then they work at best case. I also agree with everyone saying don't risk selling FSBO. Get a good realtor in your market, list the house and don't drag it out for the possibility of losing more money. Know how to win big, and know how to loose small.

Zillow is calling you non stop (prospecting YOU).

Trying to sell YOU on their "leads" that are mostly buyer leads IF they are any good.

Saying you don't need to prospect, WE will send leads to you, while they are doing the very thing they are trying to sell you on not having to do...

think about that..

@Mason Lopez I would find a realtor that is local to your market, preferably one that is investor friendly because they will be more knowledgeable (since you are just starting out) and be able to consult you with the best action you should take. They will also be able to help you with your local market and narrow in on what the home is worth in that market, how its trending and this should help you have a better understanding of what your exit strategy should be. 

+1 to everyone else that mentioned if they cant afford their mortgage chances are they will default on their rent as well. Family, i found, tends to be an up hill battle in these types of situations because they feel they can get one over on you because you are "family" or that you wont hold them accountable 100% time. Just be careful, and make sound judgement.