All Forum Posts by: Marion Edwards

Jerron,

Thanks for the response. No better intel on an area than from someone who lives there. I will take your advice to heart. 

Marion

Thanks for the responses. The neighborhood is blue collar with a mix of renters and owners. The crime rate is low (compared to other locations around the area)  and the rental rates have risen in the same range as the sold values (3-5%). The house hasn't been appraised since it was built in 2004, so I don't have that data yet. With it being a newer built home, it's hard to get comps that's truly apples to apples. I agree with Matt and Dana that playing the appreciation game is more like playing the slots, so I've decided to ignore this as a factor in my buy decision. At this point, I also agree with Matt and Dana that the numbers are tight and it's probably not a deal worth pursuing. Just thought I'd ask the pros to see if there was a strategy out there that I'm not familiar with for this kind of situation.

I have a potential deal with a seller that has a 3 BR 1 Bath ranch in Roseville MI. The house is 1050 sq ft, sits on a crawl and has no garage. It was built in 2004 in an area where most houses were built in the 1950s. The overall area is predicted to appreciate at a rate of 4.2% in 2016 and this property may appreciate above the market prediction. The house is very clean and only needs about $3000 in maintenance. Its currently tenanted at $850 per month and is scheduled for a rate increase to $900 in the fall. The seller has a current mortgage balance of $80,000 and is only looking to get out of the mortgage. His current payments are around $800 based on the mortgage he took out in 2004. This looks like it may work for a buy and hold scenario (cash flow and appreciation), if the property could be bought with a 30 year fixed mortgage, 7% or less interest rate, and a 10-20% down payment. Based on this scenario, any recommendations?

Hi Vicki. There's at least 3 lessons here that you probably have picked up on by now. First one is to use your own contractor agreement, wherever possible (I believe there's a good example in the BP FilePlace). Secondly, secure your funding before you start work. Stopping/suspending a project due to a lack of funds is hard to recover from, for both you and the contractor (especially from a scheduling perspective). Third, estimates for labor, time and materials are always best guesses, which can change for a multitude of reasons. Accusing a contractor of overcharging, without firm facts and figures, is tantamount to accusing him of stealing and that never goes over well. If it were me, I'd send him a letter with whatever data you have to support your claim and ask him for whatever you think is a fair settlement. This would at a minimum, document your attempts to resolve the dispute, should you ultimately decide to go to small claims court. The best outcome from my perspective is to secure the funding you need and have him complete the job within the original contract price. Good Luck. - Marion

Thanks Renee. Same to you!

Thanks for all the feedback. Im starting to see the real complexities of wholesaling and need to have many business processes in place. I'm undeterred and will keep doing this until I get it right. It's great to have so many mentors in one place.

Wayne. Thanks for the feedback.

Does anyone have a wholesale transaction checklist? Who starts the title work, the end buyer or the wholesaler?

Thanks,

Gents. Thanks for the response. I had planned to market it to a buy and hold investor. Was just wondering if I should structure the assignment agreement any particular way. I was thinking as a minimum to attach an addendum indicating that the tenant will occupy the property until his lease expires in Jul 14.