All Forum Posts by: Jonathan Marcus

I've been seeing ads for Handyman.com which is guess is similar to Angie's List. Haven't used it myself but might be worth a try to get quotes from all types of contractors.  

Approaching every real estate deal with an open mind without any preconceived notions should serve you very well. Always gather as much information you can on very deal because it will help you to structure something that works for all parties involved. Listening to sellers about their real estate situation helps build rapport with them. Many times sellers choose to work with me even though my offer may not be the highest but because they trust me and feel comfortable working with me, I get the deal. 

It looks like you're on the right track just never stop educating yourself. After many years in this business, I still learn myself. Education never stops. Cheers! 

Also, join your local Utah REIA (Real Estate Investors Association). You'll get to know other investors in your area.

Here is a simple way to get started wholesaling or assigning deals without making a major commitment to buy the property; and you can back out at anytime with no legal repercussions and only risk anywhere from $10 to $100 or even $1,000 in certain cases. I used this myself with success when I was getting started. It is "THE OPTION CONTRACT". 

When I find a property where I know I will be flipping it to another investor, I will tell the owner that I am very interested in his property. I let him know that I have a number of investor partners who I would like to show this deal to and select one who would partner with me. We will buy it as-is and close quickly but before I can speak to them I would like to agree on the price and if you would be willing to give me an option to buy it at that price within the next 10 days (or 20, 30 days).

An option contract gives you the right to buy an asset (house) but not the obligation to buy it until you exercise your option. At that point your option contract gets replaced by Purchase and Sale contract. I usually pay anywhere from $10 to $100 on average for my option consideration. The longer the option the more consideration I will give. Consideration is not a down payment or deposit and it is not refundable. 

Once I have a signed option contract on hand, I then contact my investors who may be interested in the deal. I tell them that I have a contract on the property (I don't tell them that it is an option contract) and proceed to show them the deal. If the property is vacant, I even do a walk thru with my investors. If I cannot unload my contract then I will simply let it expire and lose the option consideration. I do call the seller though and explain to him that unfortunately I will not be able to exercise my option. 

This technique is a good way for someone new to get out there and speak to sellers, negotiate with them and make offers. You don't need good credit, hard money or private money lined up beforehand. You just need to begin marketing and meet with sellers.  

The title company ran the title with the wholesaler as the buyer. First tell them to change that and send them an amended contract showing them that you're the buyer; you bought the contract. Have the wholesaler issue an invoice for the amount of his/her cut and send it to the title company; he will then be added to the HUD-1 on the seller side of the transaction as an additional payee. At closing, the title company wires funds to the seller, wholesaler, tax authorities, etc...They create a new deed in your name.

Attend the next San Diego County Sheriff Property Sale (Foreclosure). Usually there will be tons of cash buyers there. If you truly have a wholesale deal (which means your numbers are spot on) you should be able to sell it fast. Print some flyers of your deal and after the auction speak to the people that bid on the property. Looks like there is an auction on July 30th.

https://www.sdsheriff.net/courts/property-sales.html

 

Now you know. The deal is harder to find than the money. Your next step is marketing. Figure out the type of properties you want to target and find ways to reach out to those property owners. Attend networking events that can lead you to potential deals.   

The deal always dictate the type of financing you would use not the other way around. 

Here's an example -- I did a deal where the property was in good condition (just needed paint, carpet, cleaning and some landscaping). The owner was moving to Texas from NJ. His main concern was not being an out of state land lord; but he can't afford 2 house payments, one in TX and his NJ house. He was not behind on the mortgage and has $100k in equity (appraised at $275k, mortgage balance at $175K; monthly payments was about $1k). The house was originally listed with a Realtor for $275k and was lowered to $230k by the time he called me. 

I asked him how much he wants over and above his mortgage and he said $25k, which means I can buy the house for $200k. I asked if he needs the entire $25k to move to TX and he said no; only needs $5k now. 

I simply took control of the property, we signed an agreement that I will pay his monthly mortgage payments (PITI) and any maintenance on the property. I locked in the purchase price of $200k with the right to lease; $5k down payment, balance of $20k payable in 2 years. This is almost a Subject-to deal but I did not transfer the deed so as not to break the due-on-sale clause on the mortgage agreement. Spent another $5k for paint, carpet, cleaning and landscaping. I had a renter lined up for $1,800/month which would give me a net income of $800 monthly. However, a buyer showed up and made an offer of $265k and I accepted the offer. Took about 45 days from taking control of the property to selling it.

When you market for properties people will come to you with all sorts of real estate problems. Your JOB is to solve their problems, not take it over or create new problems for yourself; which is why I say, the deal determines the financing. The deal above did not necessitate getting a new loan, hard money or otherwise. 

Learn to solve people's real estate problems and you would be able to do deals others wouldn't know how to put together because they lead with financing in mind. By the way the seller above spoke to 4 other real estate investors before me and no one offered the solution I presented to him.  

Sell the property using creative means such as offering partial owner financing to attract buyers. Even if you end up just breaking even or even losing a little bit, that's fine but get out of the deal. Don't let this situation turn into a giant alligator. 

Good luck. 

Which goes back to the problem you asked, because they're not close together a commercial lender does not want to touch it. This leaves you with a residential lender/portfolio lender. You may also want to try going to a Credit Union.

All the best. 

The title company will reach out to you to ask for a payoff letter and instructions on where to send the funds. The title company will be preparing a satisfaction of mortgage and just let them guide you on what else is required. Also, it's best to consult your accountant regarding taxes.