All Forum Posts by: Jon Mason

Any wholesalers out there have any stories of how you've been able to help homeowners through wholesaling?  I know the general ways in which wholesaling can help the homeowner, such as not having to repair the house to retail condition, and not having to pay an agent's commission, etc. but I'd love to hear the specific scenarios of how you've gotten people out of a bind, or in some way really helped to the point that they were grateful that you came along?  If you don't mind sharing some of the numbers of the deal and what you walked away with, that would be cool too.

I'm interested in wholesaling as a starting point in REI, but only if can help people first and foremost, and still make good money doing it.

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Great tips! I'll be keeping an eye on this thread!

ok, yeah that makes sense.  I'm going to research it a bit and try and figure out the best route to take.  Low time investment with lesser returns sounds good to me because of my current situation, but I definitely don't want to miss out on the possibility of bigger money..

@Garret Chiaramonte - nevermind my questions above regarding the finders fee.  I found out its called an assignment fee and the amount depends on what I would write the contract for with the seller.  

What am I risking by going into a contract with the seller and then trying to find a buyer? 

I just got an email this morning from the owner and then he called me this afternoon.  One home he owns by himself, and on the other 6 he has a partner.  His partner has a disability and is "just wanting out", so I'm getting the impression that there is at least the possibility of a deal.  The properties are all pretty close to each other in south Nashville.  He sent me addresses and current rent amounts.

Where could I find information on how I would go about getting into a contract with the seller?  Is there a name for this type of arrangement that would make searching easy?  

Also, what is a typical finders fee?  A % or flat $ amount?  

Hello All - I just met a guy who is retiring and has 7 rental properties in my area that he wants to get rid of.  We just sold our house (closing on 5/1) and will have $20K set aside to use for real estate investment (rental or perhaps a less-intensive flip?).  Having discovered this deal, do I have any options?  I don't need 7 rental properties right now, nor could I remotely afford 7 rental properties, but maybe there's an opportunity to make money of this deal on a finder's fee, and/or perhaps get a property (or 2?) out of it in the process.

thoughts?

Originally posted by @Sterling Britt:

We have twor sfr in Franklin about that size at that price. They rent very easy to well qualified tenants. One thing that really helps us is the elementary school.  I suggest you call the rentals in your neighborhood.  Ask how long they have been for rent. If they are owner landlords ask how their experience has been. Most people love talking real estate and don't mind sharing. 

 So, the rent figures I've mentioned are pretty reasonable then.  

We're zoned for Liberty Elementary, which is a great school from what I've heard (we don't have any kids).

How would I find rentals in my neighborhood?  I know I could go look for "for rent" signs, but if the house is currently rented, they won't have a sign out, right?

Originally posted by @Brandon Hall:

Jon Mason I'm struggling to understand your numbers here. You say it will rent for $2100 and your payment will potentially be $1200. That's a $900 net difference that you are looking at which isn't bad, you just need to make sure your numbers are accurate.

You say you want to find a place to rent so that you can save up for a downpayment. How much will rent cost you per month? How much of that $900 will be remaining to actually save? **Edit: How much of the $1400 payment you no longer have will you be able to save?** It's very hard for people to downgrade, so keep that in mind.

Additionally, has the property seen any appreciation since you've owned it? If so, you will want to factor the section 121 capital gains exclusion into your decision making.

My $500 figure was assuming I couldn't get PMI removed, so $1400 mortgage payment, and assuming the conservative end of the rent figures I mentioned, so $1900 rent. If that were the case, it would be $500 per month left over. You are correct though, if I could get PMI removed, and rent it for $2100, there would $900 left over.

All of the money we'd make on the rental would be saved, at least for the time being.  Of course later we may want to put some of that into another property or something.  Rent on an apartment would be like, $1000 probably (haven't looked around a lot yet).  I failed to mention that the the primary goal of this wouldn't be for immediate cashflow (although I hope it makes money, obviously), but for long-term wealth building.  As it currently stands, we could pay the mortgage on this house and rent an apartment in addition to that on our current income and still be fine.  It wouldn't be ideal, but it wouldn't ruin us by any stretch.  

As far as appreciation, we bought the house for $234K about 2 years ago and we owe $212.  Zillow's estimate says it's worth $265, but again, I don't know how accurate that is.

Originally posted by @Josh Caldwell:

Your strategy can work

1 you assumption is wrong a bigger house will not rent slowly   As for how fast it will rent, that is a local sub-market question that I cant answer.  To pull rental comps, you can go to rentometer.com  they are pretty accurate.

2 you can pull your equity out but I would rather work a little bit to find a flexible seller, who would woner finance the house to me with zero down.  The trick in my house is keeping my wife from seeing properties that she would want to move into.  That is how I make my living.  You can learn how to do that on BP

3 if you are looking at this as a long term idea, then you need to consider vacancy rate in your calculation. If you lose a renter every year, and it takes you 3 months to get a new one after you turn the property over, then you have a problem. So try to get a feel for vacancy rate. Talk to other investors in your area. Visit your local REIA club and network.

To your success

Josh

2) We'd like to purchase a new home (not really for investment purposes) and using some of our equity in our current house is the quickest way to make that happen, just not sure if it's a good idea or not.  We're both very happy in our careers, so not trying to do real estate investing full-time (at least not right now), but just wanting to build wealth.

3) When doing my calculations, I've factored in 2 months rent per year for vacancies and maintenance.