All Forum Posts by: Jeffery Neal

So I have a buyer for a wholesale deal who is trying to pull fast one on me. 

I have two great wholesale deals that I was selling at the same time. I told the buyers that were interested that I would be willing to take 10k total off both properties if they were interested in both. One buyer agrees, we get both houses under contract for 5k each under my offering price. House A had multiple offers over asking. I started house B off too high  hence the reason I was willing to take 10 K less.  He wanted a full inspection rider but I refused and settled for a clause that stated he could inspect the sewer lateral lines. Long story short he backs out of the house B (the one that I could take 10k less on) because it doesn’t work for us” after the inspection contingency date and is now trying to force me to sell him property A for 8k less than I had other offers. He took 9 days to tell me he didn’t want the other house which leaves me 13 days with a holiday weekend to get the other one under contract. I sent him mutual releases this morning. He signed the one he didn’t want and is refusing to sign the other. 

My question is.... What are my options to walk away from this buyer since he fundamentally changed our deal and sell it to the person who was interested in only Property A for 8k more. 

The only thing I can think of is. 

A) walk away from the deal with my seller. (Don’t want to do)

B) Change the closing date for the first contract with my seller to be a day later so that I legally don’t own the house before the other contract closing date expires.  

Thoughts? Advice?

I am a real estate investor in St. Louis as well and finding good contractors is definitely hard. I started self performing everything in house except for the MEP systems. I also own a drywall company that has been doing a lot of work in south city. If anyone is looking for a good drywaller private message me. 

@Simon W. I have so many questions! lol 

1. I need help setting up my chart of accounts for my rentals and for my flips
2. Need tax planning advice. I am about one month out on finishing my first flip and I want to make sure that I am not paying too much in taxes. 
3. I would most like like to set up a self employed retirement plan and need to understand what the limitations on what I can do with the money after its in the plan.
4. Basic entity questions. 

@Michael Henson I am looking for a new accountant and lawyer as well. Did you have any luck or have anyone you would recommend?

@Philip Pape, So are all great questions. So I am a buy and hold investor. I am flipping to raise capital to get more rentals. I have one duplex now and looking to increase that number. I have done the analysis and it will cash-flow about $150 with a 25K extract. I have private investor with 8% interest. I would be looking to refinance the property into a traditional loan if I were to keep it. 

If I sell it out right I will should make around 60K. If I am going to turn around and buy another one would it make sense to just keep this one ask I have completely gutted it and everything will be brand new. My original thought was to put the down payment on a 4plex or a couple more duplexes with the money I make from this flip. When I think about taxes on the money that I will gain I see that 60K start to shrink and I could defer the taxes and do a 1031 later if I decided to trade up. 

I was also thinking about a SERP and then purchasing another property with the retirement plan. I haven't had to make these decisions yet. I have read about all these different strategies but often time there are little requirements and things that can keep you from doing a certain strategy and I dont want to wait until the end of the project to determine that exit strategy. 

I started my first true flip about 3 weeks ago. Things are going pretty smooth. I am trying to decide if I should truly flip the property of apply the burr strategy. Below are the numbers let me know your thoughts.

ARV 160K

Total Investment 100k

Rent 1200

@Boris Grinberg Ya that makes a lot of sense. Yes I plan to fund the construction as well. You bring up a good point though, it's about the future relationship. Thanks for the advice. 

I want to fix and flip it myself. I have a degree in construction management and want the extra cash to jump start my buy and hold portfolio.

I have started applying some of the the things I have learn from BP and several books. I started driving dollars. I identified two properties, sent them letters and now have one under contract. The property had a house fire and the owner has received the insurance money. He is motivated to sell because the city is holding 1/4 of the insurance cost to insure that the property isn't abandoned.  

Here are the numbers

ARV 140k

Repair Cost 60k

Purchase Price 15k 

The previous rehab went over top of the lath and plaster with drywall so there was no damage to the structure. Only actual fire damage is in the kitchen and the rest is smoke damage, 

I contacted my first hard money lender and because the purchase price was too low they weren't interested. If I paid more for it they would lend me the money? I found a really good deal and because I was able to negotiate if for a good price now I can't get a loan. I will look for other lenders but I wanted to get any advice I can before I do. 

Does anyone in the St. Louis area know of a good hard money lender?

@Ralph Hunter Thanks for the link to landlord tenant laws that was very helpful.

@Ronald Perich Your idea on have a win-win situation is excellent advice. Its a small price to pay for movers when they could damage the unit. Like you said who knows they could be looking at another unit of mine in the future. I really hate that I have to have them move as well. 

@Maggie L. Please send me more information on the Tower Grove Neighborhoods Community Development Corporation. That sounds like a really great resource. The main reason that that I have decided to move into the unit that is month to month is because they are a family member to the previous owner and their rent is substantially lower than market for the area and the size of the unit. I think the low rent is one of the main reasons the tenant has stayed as long as she has. I would have to start raising the rent right out the gate and this would most likely force them to move and then I really would have concrete in my toilets. lol