All Forum Posts by: John Klahn

Doug,
Sorry for the slow response, I don't think I was following this thread (sometimes I forget to check the 'Notify' box). I will get you the numbers here shortly. The property just went under contract after < 2 weeks on the market for a near full price offer.

Cheers,
John

Jon,
Congrats on getting everything completed and getting on the market. Best wishes for a quick sale!

Mike,
I understand your concern. I will let you know that on my projects all of my work is done to current code - that is something that my integrity demands. However, I do not necessarily get permits. There a some rehabbers who cut corners without permits and that is a complete shame. My business is to make a profit but I will never do that by providing a substandard product.

I believe that you can request permits on any rehabbed property that you are purchasing if you know that work was done that needed permits. Someone correct me if I'm wrong. If you are under contract to buy a rehabbed house to live in you can request the permits when you believe that they are warranted - just terminate the contract.

Cheers,
John

Shazbot! Thanks for the reminder Jon. I have no relationship with PropertyLeadsNow.com or any other company or website mentioned in this thread.

Cheers,
John

I agree with Audley. Doing the right thing is somewhat absent from many of the people I bump into in this field. Doing the right thing helps me sleep better.

Still pulling for you Nick!

Cheers,
John

Thanks Tyler and Matthew! I appreciate the feedback. I was thinking of adding them to the leads that I generate on my own but I'll probably just save myself some money.

Cheers,
John

It's always good to have a back end investor who doesn't need to finance the deal, if they don't have cash the second best thing is a hard money loan. Vetting your end buyer for their ability to perform on the purchase is critical. I don't sell my wholesale properties to investors with no cash and/or no experience with a hard money lender - I absolutely won't sell to an investor who is trying to put any kind of conventional lending together.

You don't have to pay cash for the property if you get your cash offer accepted. In my experience, as long as the purchase gets funded they don't much care how. HOWEVER, if you make an all cash offer and can't perform (close) because of funding reasons then you will lose your earnest money and you shouldn't have been going after this property at this price in the first place. If you make all cash offers you should be certain that you can put your money (or financing) where your mouth is.

Cheers,
John

Good point Steve. I've only been asked by the title companies to provide the state docs. Just a matter of time I suppose.
I am fortunate that I can do all of this online in a matter of 5 minutes if need be - add an extra 2 minutes if I need an EIN.

Cheers,
John

Josh,
In my experience, if you have a relationship with someone who has cash to buy properties you can have that person draft and sign a document that says that you are authorized to use their cash to purchase real estate and that you have a working relationship. That person would also provide you with a bank letter reflecting their account balance or a printout of a recent bank statement. These 2 documents will serve as your POF.

Once you locate a property, have your agent submit a contract and I have done this 2 ways. The first way is my most common. I will have the name on my contract for purchase be an LLC that exists (or will soon exist) for the sole purpose of purchasing this property. If the contract is accepted, I have the end buyers (your investors with a ton of cash) sign a simple purchase agreement with me to buy the LLC that is named on the contract for purchase. Then they pay me and take over the contract and close as the buyer. The second way is to have your personal name as the buyer on the contract for purchase. If the contract is accepted, I have the end buyers (your investors with a ton of cash) sign a simple purchase agreement with me to buy the property in a double close situation. With this method you may or may not need to arrange for transactional funding.

With both methods above, I make the offer a cash offer and do not have a financing contingency. Also, I have the investor pay me a non-refundable deposit that is equal to $500-$1000 more than my earnest money check.

I hope that helps!

Cheers,
John

Nick,
Thanks for the candid and raw info. This will help me (and many others) immensely. It really sucks that the families that you were trying to help got the short end of the stick, but with this posting hopefully you are helping a lot more families make the best of a bad situation. It's great that you are taking this nasty situation and making a good lesson and business requirement from it - for all of us.

Here's to bouncing back...

Cheers,
John

Craig,
Be sure to research the HOA that this condo is in. If they are in a financial bind with a small cash reserve you would be better off not buying this condo. Weak HOAs are a pain in the rear and can be costly with random assessments. Just my 2 cents.

Cheers,
John