All Forum Posts by: Nawaz A.

@Jason D. Thanks for the info. I eventually found out it was a wholesale deal. 

Team,

I'm going to pull out of the deal. Thanks for the feedback.

Quick question on Wholesale deals - Is there a way to find out what the wholesale cost is and not my cost to the realtor?

Team,

Thanks for the input, He is my real estate agent and this is the first deal he has proposed to me. 

I gave him a proposal to have his commission cost baked into the end profit of the flip so he has more skin in the game and incentive to get us the proposed $325k after reno sale. He did not go for it. 

He's wording it as a foreclosure. It's not listed in the MLS. The original occupants are in the home, but will be sold to me as vacant. He mentioned they will need to pay them to move which is a hidden fee he's taking on.

Nghi - 

Rehab would be out of pocket. 

I have 0 experience. 

This is not a wholesale deal. 

I just had a conversation with him and he said the $30k is a finders fee given it's a exclusive deal, he has to pay his people that helps him find these. 

They are also looking to relist and collect the bank-end commission. 

Not too sure on the extra 3% in closing costs. 

I asked him about property taxes, this area is about $10k which is not included, he said it would be included in the Misc section. 

Jason - Thanks for the input, no explanation, yet. I plan on asking more about these numbers late this evening, hoping to get some feedback so I can get the right questions answered. 

Ron - Thanks for the feedback. I'll confirm if this is a hard money loan, the deal can only go through as a cash deal. What do you think about the $30k commission fee? Seems extraordinary. 

Hi Team,

I'm working with a Real Estate agent that found a Foreclosure for a fix n flip deal. He gave me the numbers below and I'm not sure I understand the Commission piece. Does this look shady? The "Mortgage" section is really just me borrowing money as a loan. 

Thanks for your help!

Out of Pocket

20% Downpayment

$150,000 - $30,000 = $120,000

"Mortgage"

$120,000 x 12% = $14,400

$14,000/12 = $1,200 monthly

3% Points = $3,600 Upfront

6 months x $1,200 = $7,200

Buying Closing Cost (title) etc.

$120,000 x 3% = $3,600

Attorney Fee = $1,500

Property Insurance 1 Year = $1,200

Repairs = $40,000

Commissions = $30,000

Resale Closing Cost

$325,000 x 3% = $3,600

Sales Commission = $19,500 ($325,000 x 6%)

Resale Attorney's Fees = $1,500

Miscellaneous = $3,000

Totale out of Pocket = $144,700

Total Profit: $325,000 - $264,700 = $60,300

Return on Cash: ($144,700) = 41.67% Profit

Team,

Thanks for taking the time to read this. I'd like to invest in a multifamily home in the tristate area. I currently reside in Queens and would like something close by if possible. Not sure if being close by is necessary, but given this is my first investment I figure I'd want it close. 

I have access to about 150k to invest and looking for some advice. Took a look at loopnet and didn't find anything interesting. 

- Are there other markets I should look into even though I won't be living in the state? 

- I'm looking to create a LLC to purchase the property.