All Forum Posts by: Jim Viens

It sounds like you're describing the strategy of wholesaling. You contract with a seller to purchase at a certain price, then line up a buyer for a slightly higher price. You then either use transactional funding to purchase the house and on the same day you close that purchase you close the sale to your buyer...OR...you simply assign the purchase contract you signed with the seller to your buyer with an "assignment fee" added in that you collect when your buyer closes with your seller. Just as @Jared K. mentioned above...the period between when you contract to purchase and when you close is commonly referred to as the "inspection period".

I would match materials to the area. I'm working on a deal near me in a neighborhood very much like where I grew up and where I now live (homes sell for $65-$100k). Granite countertops there would be WAY overdoing it, so we're going with a nice-looking laminate. Same with cabinets...full custom cabinets is overkill so we're going with basic contractor-grade. We are planning on stainless steel appliances, but only the entry-level. Hope that helps...and good luck!

I agree with what's being said above. I'm working my first deal right now purchasing a Fannie Mae REO and Fannie Mae requires POF to be sent concurrent with the offer. The big question right now for you is: Do you have a solid buyer lined up? If so, see if they will put their purchase money in an escrow account in your name...then provide POF from that escrow account. If the buyer won't do that or you don't have a buyer then transactional funding is what you'll have to do. If it were me I'd work my tail off to line up a solid buyer first, though. Do you have an EMD on the property? Or just an offer on paper?

...sorry...just fact-checked myself and I wasn't remembering right on the Zillow stuff. They don't guarantee any accuracy in the KC market. They don't even have a figure for what percentage of the homes are within 5%, 10% or 20% of true market value. Part of that is due to the fact that in Kansas, at least, sale prices don't have to be disclosed in public records.

@Daniel Bennison is right. If you look at the details on their page for how they do the Zestimates, the KC market is only rated at a 5% chance of being within 50% of the real value. I'm in KCK/Wyandotte County and the appraiser's website has a comps page that lists 4-5 properties with sales price and does the whole rundown like a regular appraisal...only thing is sometimes the sales data is a couple years old (2012-2013). If you learn the market well enough and look at what's on the market currently for what prices I think can get you in the right ballpark.

Dang it...@Russell Ponce beat me to it! :) But he has more good info anyway so it's all good. :)

As a newbie myself I'll do my best to make sure MY understanding is correct. 

1) As I'm in Kansas City I can't help you here...sorry. :)

2) I'll leave that to pros in CA as it will vary by state.

3) I believe there are good contract templates in the FilePlace under the Resources tab at the top fo the page.

4) Don't hold the contract any longer than you have to. If you can sell it in 24 hours...go for it. If it takes you a couple of weeks, that's fine too; but the quicker you can offload it the better.

5) You will definitely want to look at the property before you put in an offer. This way you can calculate the estimated repair costs (if applicable...and it usually is) so that you can offer it to your buyers at a fair price. Your buyers will want the same courtesy so they can verify your estimated repair costs and get a good basis for calculating comps on the ARV. You may eventually get to a point where you've worked with particular buyers enough and supplied them with enough solid deals they may start buying from you sight-unseen...but you should always allow them their opportunity to inspect the property.

Most cases the only parties involved will be the "motivated seller", you and your buyer. Professionally there may/may not be an attorney and/or title company that will handle the paperwork, escrow & closing.

One more thing...ALWAYS be up-front and above board with ALL parties on what you're doing. Let the seller know you may be working with other parties to make sure their house gets sold at the agreed-upon price, but the end buyer may not be you. Don't hide anything from anyone involved so there are no surprises for anyone. You'll establish and keep a good reputation that way.

Hope that helps! And if I'm off on anything I'm trusting the BP pros to let me know!

After researching and studying REI pretty heavily over the last 2-3 months (about 20-30 hours a week worth) and building up some good contacts, I'm partnering with another investor (he's providing the financing) and we've put an offer on a FannieMae Homepath property near me. We're planning on flipping this one for a projected $12-$15k profit on the backend and now I've got my eye on a vacant FSBO property a couple of blocks from me in a good area that I may try an owner-finance and then rent it out.

Wow...Just looked at the Zestimate accuracy page and see that the Kansas City market only has 1 out of 5 stars for accuracy. Basically going off the county appraised values, aka: "Your guess is as good as ours."

Thanks for the input guys. Didn't realize Zillow had that disclaimer @Matthew B.