All Forum Posts by: John K.

@Charles Hunnewell

As @Paul Beets mentioned, it depends on your motivation.

If you want to do some deals to generate some quick income, then wholesaling is a great place to start.

However, if you want to build a scalable wholesale business, doing 100s of transactions per year, you will need systems. These systems will need to be tweaked to deliver large quantities of leads, daily. This business is about finding opportunities, quickly. Unfortunately, we can't just visit the MLS or Zillow, and start buying houses.

To really capitalize on those leads, you need a reliable list of buyers, not just a list of email addresses. You need to understand exactly what your buyers are looking for, individually. You need to be adept at many strategies, not just the typical rental units or flip units. As you grow, you will be contacted by a variety of investors with different strategies, if you want them to become a client, you better know the process of that strategy. This will help you broaden your horizons, and tap into those investors that don't take the traditional roads of investing. 

You need to identify and bring value to an investor, beyond simply a great deal. The more valuable you appear to them, the more business and referrals they bring. This can especially be true, if you can be creative and structure financing or even favorable cash positions into the deals. 

Whether you want to do a dozen deals a year, or 200, it takes a lot of work. I will say this, it takes substantially more work to do a dozen deals, than it does 200. If you're only doing a dozen deals, you don't need a sophisticated system in place, simply drive some streets weekly, and you will have plenty of opportunities. You will most likely being doing the all the leg work, manually. This means a lot of spent hours, looking up information. However, when you have automated systems in place, all the leg work is done for you. You just have to figure out what method of contacting the owners, works for you.

@Andrew White

It needs to find its way to title.

You did get it signed by the buyer, correct?

@Lafayette Harris, Jr.

LE = low/little equity

@Freddy Pettiford

You're welcome. I am sorry to hear that this one didn't work out for you.

Just keep pushing forward, there are plenty of these deals out there. As you get more comfortable, they get much easier. 

Since the original topic was the validity of sub 2, i chose to keep my answers inline with the topic of discussion. 

A short sale is just as bad to FICO, as a foreclosure is. Where as, a properly executed sub 2, is actually helpful to the seller. This is because the payments will be made on time, every time. Thus, helping that seller overcome the late payments that got them into the foreclosure bubble, in the first place. 

That is not a solution to protecting the FICO. A short sale and foreclosure are both detrimental to the FICO, where as a properly executed sub 2 will protect the total demolishing of a FICO, and actually help the seller re-establish good credit. 

@Jon Mason

1. Yes, you can offer them anything you want. Just work the numbers backwards, to come up with the payment you desire.

2. This also allows them to NOT pay fees associated with selling a property, the conventional way. When you add in all the fees, it's quite expensive to actually sell a home. 

3. Owner financing can work on homes that need repairs, presuming you have the funds to repair it. If this is the case, it's always better to use this, as the money paid to the seller should always be cheaper than borrowed money from institutions. 

If they are not CASH motivated, this is a great option for them. 

 Well, of course you can keep dropping the price, and it will sell. 

Now if we could only get the bank to agree to that logic, if more is owed on the house than the offer made.  

@Freddy Pettiford

Ok. This is what I would attempt to do, with this deal.

It's time for some reverse engineering. 

The problem with this deal, is the interest rate. That is an extremely high rate, for owner financing. My rates, are usually secured in the 4-6% range, mostly on the lower side. The seller deserves to be paid a premium, but not a 5 point premium. 

Since you know what the seller wants, 100k, this is how I would now approach her. 

Principal:  85,000

Term: 15 years

Dn Payment: 10%

Int. Rate:  4.5%

This makes your principal, $585 per month. I don't know your taxes or insurance, so you will need to add that in, to get your true payment.

This term, pays her just over 105K, in half the time. She of course gives up a ton of interest, doing it this way, but if you frame it correctly, she just may realize that 30 years, is a really long time to be holding a note. 

Obviously, you can play with these terms, however you want, to make it a bit more enticing for her. 

You're welcome.

I appreciate the offer, however I do not do JV wholesale deals.