All Forum Posts by: Kevin Kaczmarek

Shania,

We make it a requirement when a potential buyer submits an offer that they include proof of funds. I know exactly why the speaker mentioned that tip, as we are also a wholesale specialist and trust me, when you are doing your deals, and you have your $1000 EMD and a signed purchase agreement, you want to make sure your buyer can close. The proof of funds letter is one more piece of security to let you know that your buyer can close.

Why did he recommend this? Imagine a scenario where you have accepted a deposit on a property, have a signed purchase agreement. You are not sure if they have the cash to close. Along the waiting period for the close, you get contacted by an older buyer you talked to who wants to pay $2000 more for the house, and has proof of funds.

At this point you are stuck. You can't back out of your purchase agreement, nor would you want to for reputation sake, but now its killing you inside because you have a buyer you know would close on the property for $2000 more and your under contract buyer that you are nervous about.

Just an example of why we always require proof of funds.

Thanks for sharing Brent! Good concise post with information we all can use.

Bryan,

I know we mentioned this, but wanted to put it out there for debate. We could have a feedback system similar to eBay in that both parties of a transaction completed thru biggerpockets.com could rate each other. It would do a couple of things.
#1. Separate the doers from the talkers
#2. Give Relevance to posts by people actually doing deals (the whole guru mentality, that anyone can dish out advice, but are they doing it themselves?)
#3. Great way to track deals done through the site
#4. Improves information flow

I know eBay's system is not perfect, but it sure turned that company into a billion dollar business with a lot of that credit coming from the feedback system.

Karim,

We generally do some basic work to all the properties we sell on contract. Paint, carpet and work on the kitchen and bath are pretty standard for us. We realize land contract buyers are looking to own a home and not a project!

Ron,

I couldn't have said it better myself! Thanks for bringing clarity to my responses. I appreciate it!!

Cheers,
Kevin

Financexaminer,

I think at this point you are just trying to flame any response on this thread.

Let's get back to informative discussions to better this site. If you disagree with something I or someone else says, then state your case, but calling people scammers, and wishing people go to jail do not benefit this community.

I know you have made more positive impacts on this site than most of us, and I respect you for that. Let's just take a step back, and hope for all to have a better day!

Cheers,
Kevin

Karim,

We just sold a property at the 800 block of Shadowlawn in Inkster last week on land contract. We found the buyer by sending out postcards within a 5 block radius of the property address. Inkster is a family oriented city in that families like to live close to each other. In this case a mother received our postcard and her daughter ended up buying the property on contract. Postcards in and around the property might be a great investment. I can connect you with who we use for printing and distribution. I want to say the total cost for that marketing campaign will be less than $150

We have done other deals in Inkster and another successful marketing campaign is contacting the pastors of the churches in the area. They know their community needs better than most and can be helpful in matching your property with a potential buyer.

What area in NW Detroit?

Financeexaminer, I take offense to that reply. If we are financing a deal for an extended period of time, and the Time Value of Money says that a dollar today is worth more than a dollar tomorrow, then why would anyone assume the cash price and the financing price are the same.

Oh and I guess I failed to mention in my example, that, that same house that we would ask $25K cash on, would be sold on a mortgage for a lot more than our $50K financed price.

I just gave an example using a simple rule of thumb.

If it takes 8 years to get $50K or instantly get $25K what is your lost opportunity cost or your time value of money between the examples?

I am proud that we sell on contract terms. We create home ownership, allow for fair payment terms, and never change rates or payment amounts.

Ted,

For me its a personal choice. I firmly believe the market for the Alt-A loan market has yet to see the worst of times, and therefore I don't want to get involved in a property that fails to appreciate in value.

When I see houses selling for the same price in neighborhoods as they were in the 80's it makes me question what those families are feeling right now, when their biggest asset lost its value.

I would much rather hedge my investments with lower cost cash flow machines and save the mortgage interest myself, so I can buy more properties.

Karim.

We specialize in the city but also do a lot of deals in the surrounding suburbs like Redford, Southfield, Dearborn Heights, just to mention a few.
We have found the highest down payments come from buyers who want to live in Detroit, believe it or not!

Our price point on land contracts is generally 2x our cash price. For example we had a house in the city that we would accept a $25K cash price, we also would finance that same property for $50K with at a min. of $6K down.

For us, most areas are good for contracts because so many people have lost homes, there is a glut of inventory, and the banks just are not helping people, so we have found land contracts to be the best fit for them and us!

The $500 payment is a combination of principle and interest. We do our contracts a little different in that we amortize based on the payment amount and not a timeline, timeframe.

Let me know if you would like to talk further on Land Contracts. They are my favorite subject!