All Forum Posts by: John K.

@Gus Muller
The unfortunate real truth in all of this, is that if a wholesaler has a very successful business already they are not actively looking for buyers, because they have all they need. 

The "wholesalers" that rain down the ads for "sign up here", most likely are doing nothing but passing on a property that has 10 other people in front of them, thus making it not likely that it's a real deal, or stands no reasonable chance of being investable. 

With that being said, you can try some of these:

1. Local FB marketplace groups. Just be very very careful in them. Don't take anything at face value.
2. Check BP marketplace for any active listings.
3. I did see you attended local REI meetings, continue that approach. It will pay off, eventually. You might try talking to investors there and see if they will give up any wholesalers they work with, but that might be tough going.

4. If you have 1 day per week where you can work some leads yourself, do it. There are plenty of hardship situations to choose from, pick one and work it. When you get efficient at it, you will have no need for wholesalers. 

What i see in this, is a seller that is not money motivated. He simply wants his debt cleared. 
It's time to get creative.

Option 1:  Confirm the numbers and wholesale the deal. quick easy cash.

Option 2:  If you have the cash to rehab, offer him an 12 month balloon, at 4-7% interest. This should allow you plenty of time to rehab and get it sold. 

Option 3: If Option 2 fails, offer him a JV position in the deal. I would start at 15-20% equity.

Remember, 80% of a watermelon is much better than 100% of a grape.

Option 4:  If the seller is capable and willing to be your banker, make him a deal. Offer him equity in exchange for the funds to rehab or a simple interest agreement.

Option 5:  Get Hard money involved. If you need the cash to even rehab the project, see if they will fund only the renovation, if your seller will do Option 2. You will need to look at the numbers closely for Option 3. 

Good Luck!

My immediate concern would be how long was the sewage backing up, and has it caused irreversible damage. If this sewage problem has been ongoing for months/years, which is not uncommon in hoarding situations, you could be looking at so much contamination, that a complete gut is necessary. 

I would call the city and fully understand what their expectations would be in this scenario. I would suspect they are fully aware of this home and have probably visited and deemed it unsafe to occupy. 

My guess for the delay of showing the property, is just to get the home cleaned out of the hoard. This would allow the home to "show" better, rather than have piles of trash for the buyers to climb over. 

@Camron Cottam

If a simple POF letter from your PL will not suffice, the title company would probably have no issue in verifying the funds are available for your seller. I would not go down the road of asking for bank statements and then handing them over to complete strangers, you could get into a really ugly legal problem with that.

@Christian Cardamone

I have seen similar products like this used on homes, but have never used them myself.
https://www.dawgsinc.com/

Correct. So just reverse engineer the balloon payment and put that amount into an interest earning account, as your buyer makes their monthly payment, put "X" into that account to accumulate.  There should be more than enough cash flow to do this, if the deal is structured on the back end, correctly.  

@Jeff Montanya

As far a structuring the note, you will definitely want to hire an attorney to help you draw the papers. This is not an arena you want to trust to some random downloaded form off the internet. 

As far as the terms, I have to ask why would would want to refi out of a I/O note, to get into a full P&I note. Unless the purchase price makes the payment too high to perform on the back end, there is no way I would give up those terms. The fact you will only be paying interest for 10 years, if you wrap that note to a buyer, you should be producing some serious cash flow.

@Joshua Nabours

You just fill in the blanks. Whatever it's asking, you provide it with that information.

Buyer - Individual(s) Name or company Name

Seller - Individual(s) Name or company Name

Earnest Money - Amount and how many days you have to get it to title

Option Period - How much are you/they paying for it? How long is it good for?

Survey - Do you/they want one and if so, who's paying?

Address of Property

Legal Description of Property

Price of Home

Cash buyer or not

etc...

Just go line by line and communicate the wants/needs of your buyers, to title. If something is off, they will clarify it or ask you to correct. 

EMD should always go to title. This provides some reassurance to the buyer that there is an actual deal to close, presuming all things check out on the title, as you mentioned. Unfortunately, there are far too many stories of EMDs being handed directly to the "seller", then they disappear.

@Cirilo Villar

I can't speak to whether or not it would cash flow, as I am not familiar with that market. I also can't speak to whether or not you can afford it, as I don't know your financial information.

What I can speak to is that zero or no credit, is only relevant if you need a bank involved, or the seller makes an issue of it. 

1. The simplest way is to get the seller to carry a note, with your 10K down. I won't lie, it's probably not going to be easy to convince them to do this, with minimal down. If you have excellent negotiation skills, you might stand a fighting chance. You will really have to sweeten this deal for them, higher interest, higher purchase price or both. Get creative!
2.  What may be the best option for you, is to offer the seller some equity into the deal. Discuss what a partnership would look like and where you will benefit the partnership, outside of cash contributions. Construction? Management Experience?  

3. Bring in an outside cash partner to fund it and workout the partnership agreement with them. 

Hopefully that gives you some ideas. Take some time to really get creative with your offer, and make them think really hard before saying no.