All Forum Posts by: Guy M.

I'm not sure how you jumped to the conclusion that the OP was "stealing" from the buyers, but I think your first response should have been in the form of a few questions. Maybe your judgement would have been different.

I think what Fitzgerald accomplished was phenomenal, don't you? Paying the tax bill? Helping with moving expenses? These sellers had their backs up against the wall and Fitzgerald provided a way out. Regardless of the payday for our fellow investor, the sellers are currently and will be in a better position than if they had not found help in Fitzgerald.

We want to bring up regulations... well, I'm pretty sure these "regulations" can't stop real people from losing a real house in real life. Do the regulations consider ALL transaction scenarios? The investor was the one in the trenches and had the better point of view to formulate a plan to make a soup-sandwich into a hero. I just got licensed and I can tell you that less than a few agents would have been useful in this situation.

Hi, Steven.

It was $500 a month, no interest, until balance was paid. I bought in April and closed this afternoon.

@Dana Whicker and @Joshua Springer

Thanks! The ad only showed the outside of the house and didn't really express just how well kept it was for the area it was in. So I was fortunate to have such little repair costs!

I am sitting here spinning a bunch of ideas. I thought I'd come on here and put one of them on blast...

Sale & Rent-back

So, with the sale & rent-back, a buyer would purchase a property and rent it back to the original owners for a period of time. I can see how this would help people that need time to move their belongings and maybe find another place to move into.

But I don't see how this would work if a seller is distressed and really needs to offload the house because they can no longer make the payments or they are behind on payments. If they can't afford the monthly mortgage payment, then they can't afford a rent payment that is just as high or higher.

Better than Sale & Rent-back?

Does it make sense to purchase a rent-ready property subject-to for the amount a seller is behind on payments (and use that purchase payment to bring the seller's mortgage current), give the seller a, let's say, 5-year option to purchase, and rent the property out to someone else for a few years up to 5 years when the original seller is ready to buy back the title?

The way I see it there are some risks such as the seller incurring liens on the property during that 5-year period. Also, the market rent will have to be high enough to justify me taking over payments.

Any other thoughts?

I am happy to say that I completed my first fix and flip today! In summary, here's how it all went down:

I saw an ad on Craigslist for a home in North County, MO selling for $15k. I shot the seller a message stating that I'd like to buy it for $9500; comps were at $46k, but realistically, $25k since some comps were a couple of years old in that area. I set up a time to meet the seller to take a look at the house.

When the meeting time came, I was happy to find out that the house was in pretty good shape and simply needed a few touch-ups to make it rent-ready. I sited the repairs needed and negotiated to pay $7500 and have the seller carry the remaining $2000 balance to allow me time to fix the place up. We agreed, closed and went our separate ways for a time. 

I immediately got an initial repair estimate for around $5500. I beat that estimate and eventually got what needed to be repaired/replaced for roughly $1550 (new furnace, new carpet, new tile, new paint, mowed the grass, cut down some shrubs, and added a porch light).

I paid the note off with the seller and put the property up for sale. The property sold for $22,500 and we closed today.

This was great since I didn't have to spend a ton of money and I got a feel for fixing and flipping. 

I'm happy.

Now, on to the next project...

@Eduardo C.

Good to see you're putting together a business plan. I completed a few of them and I am working on one now (about 30 pages+ and it's actually a marketing plan). I would for sure add some research to why you're going to be executing some of the initiatives in your plan. For example, research supporting why you're focusing on homes in the price range of $100K-180K, why you plan to market your properties through Craigslist, etc. because someone other than yourself may be looking at your plan at some point and they need to know the method to the madness.

Good points to research are:

- How fast are homes selling in your target price range

- What is the median income of the local population

- What is the median family size of each household

- Where are the best neighborhoods located; best schools

- Marketing: how are you going to convert leads into sales? What will be your process?

- Priority of funding sources: dip into savings over a 401k? Or vice versa? No money down possibilities

- Identify title companies in your area and what they can provide; prioritize

- Identify contractors, agents, lawyers (talk to them personally and find out what they're about); identify reputation

 - Financials: is your business going to establish it's own credit and ways to find funding without your personal funds? Research ways to obtain business funding

This is time consuming but it's worth it and important. As a matter of fact, I think for this business, a marketing plan is more appropriate since REI focuses heavily on marketing. The bottom line is know your local area and understand it. To do that, you may have to do some valid and valuable research and add it to your plan to back up everything you're saying you're going to to.

I sure would run checks on the elderly. Norman Bates' mother got into her son's head...

Hi, Brittney.

To unscramble your brain, I would narrow down your REI knowledge to a specific type of REI that you think you might be good at or have the resources for. My first REI was a lease-option in Virginia Beach. I've been a landlord for pretty much the better portion of 8 years or so. I'm comfortable with this type of investing and can do it with little anxiety about what to do. I just recently completed my first fix-n-flip in the St. Louis, MO area and I learned a lot about dealing with contractors, incorporated areas, permits, etc. and now I'm looking for another fix-n-flip in the Richmond, VA area. I'll continue doing this type of transaction until I'm proficient at it.

The bottom line is to pick an area of REI and get good at it THEN try another area of REI. A lot of new investors choose wholesaling because it often requires little to no money, but it's not for everyone.

Do what you have to do with all your might, but always be FOCUSED in going about your business.  

If I could offer two bits of advice... never, ever, ever, never accept a tenant off of a gut feeling or because they told a compelling sob story. I did this in 2008 and will NEVER do it again. I got my lashes for it. Secondly, and like you said, know the eviction process BEFORE you accept one application.

Set your "rules" and processes and make sure they make sense for your market. Stick to them!

Hi, Rhondalette.

I agree with Steve Babiak's response to this. You definitely need to develop some metrics to judge whether or not an applicant is acceptable. It seems like you know your market and understand that in your area someone will have some type of issue. Figure out what's acceptable and what's not for your area and stick to that standard. If you need to ask more questions about the issues, so be it. Sometimes people mess up or circumstances cause unintended decisions.

If I were you, I'd refer to your metrics first, then ask probing questions, if necessary, second.

In this case, I think this decision is up to you, though. I wouldn't tell you to toss them, nor would I tell you to accept them. Seven years is a long time ago, but then again, they've been living with family since?... Hmmm.