All Forum Posts by: Kelly Byrd

I started at podcast #1 around August of 2016 and just got caught up...wait no. I'm a week behind. Damn! Being completely honest, I didn't listen to every single one. I skipped 3 or 4 of the early ones based on the title. But somewhere around #30 I just dug in and listened to all the rest. There is almost always something useful in each and at the very least, having the constant stream of REI talk in my daily life finally moved me to make a plan with my wife and get our first property...which closes today!

A tip that helped me:

The podcast app I was using lets me speed up or slow down the audio speed. Try slowly increasing it, but make sure you can still understand it. For some guests that naturally speak quickly, I had to slow back down to 1.0x speed. If you find yourself asking: "what did she just say?" stop the podcast, concentrate on driving instead and the remember to re-listen at a slower speed.

Ahh, got it. So that process would work like this?

• Wholesaler finds a deal, puts it under an assignable contract, files the Memorandum of Contract with the county

• Wholesaler markets the deal to buyers.

• If a buyer shady and tries to circumvent the wholesaler, the title search will show the MoC and a title company won't write a policy?

Ok, so it sounds like it is unusual for a buyer to have to sign an agreement up front explaining the relationship and spelling out that the buyer won't go around the wholesaler.

@Joe Splitrock: The property was currently being managed by a PM so we got rent roll and T12 showing income and expenses from the PM. The PM sat down with us and went thru individual invoices or explained charges that looked odd. We did end up with last year's tax form and matched it as best we could.

As it turns out, before finding this property, I had separately interviewed and decided to use the same PM that is currently managing the place, so in this case transferring deposits and rent payments is easier than it otherwise would be.

Thanks @Chris Bounds. What is a "Memorandum of Contract"? 

I'm a new investor about to close on my first property. It's out of state and as part of looking for my next deal, I've begun talking to a few different people local to the area to find wholesale deals in addition to my RE agent. 

One concern I have run across is that people are nervous about me going around them directly to the seller. I totally understand this concern, I will not go around anyone, it's just the wrong thing to do, but since I'm new, I haven't built a reputation yet or a relationship with these specific people. 

How do wholesalers typically handle this with new buyers? Is there a buyer's agreement or similar?  I've heard the term "non-circumvent" agreement, is this done per property or for a set period of time?

Things are moving along fine, we should close in a few weeks. Regarding forgetting stuff, I've got notes in Evernote for "here are all the things to make sure you don't forget" it seems like I add to it every week.

Think about would you do with the results of a credit check. If it comes out below 700, what would you do?  What about 600? 500? If your answer is the same regardless, doing the credit check may be a waste of time of and money. 

Here is where I ended up. I decided to just build what I want for now from spreadsheets, getting a feel for what I actually want the data to tell me. We're only dealing with a single property right now, and have a  property manager for it, so I really only need the financials not a PM software. I'm sure I'll outgrow this, but by then I'll at least know what it is that I want.

Congratulations to you!

Before our offer, we did little on the property itself. We took a look at the neighborhood, crime data, average rents, Google street view, and the pro forma from the seller, which I then turned into a "worst case" set of numbers I believed in. Based on that, we made the offer.

Since then, we have asked for things like this:

- Current rent roll

- Last twelve months of income and expenses (sometimes called a trailing 12 or T12)

- Bills to match against the T12

- Last two years of IRS Schedule E for this property.

- Evidence of property taxes being paid (the county website will tell you this)

- Leases, tenant application info

- Home/Building inspection

- Appraisal

- Bank statements

I'm very new at this, but from what I have read, the idea is that few owners will have every document, and you don't actually need everything because some documents have duplicate info. What I am trying to do is look at all the expenses, income, and security deposits and then trace it back to an actual bank deposit or bill. We ended up asking for explanations for several categories on the T12 in an effort to figure out what was an improvement vs what is likely to be recurring expenses, then I re-ran my spreadsheet with those numbers to make sure we still wanted to purchase. For the leases and tenant info, I wanted to know who I was inheriting and verify actual rents being paid in the T12 vs the lease.

I'm sure I missed something we asked for, or missed something altogether. Hopefully others will chime in with better info.

Thanks @Amy Atkinson, we've analyzed several places in the last few months, and I even managed to go to a REIA meeting and met @Pete Krentz in person. We're under contract on a multifamily now, hopefully everything gets sorted out and we can close on it, then move on to the next!