All Forum Posts by: Nancy Brook

Distressed owners who are good candidates for lease option typically owe more than the property is worth and want to get out. They don't list with an agent because there's not enough proceeds to pay the 6% commission. If they do list, the asking price may be more than market value.  I'd ask the Realtor if she would share expired listings. Many times, listings expire because the seller is overpriced for the market. (But first ask her advice as to how to get started.)

I'm sure there are also people who would do a lease/option just to get rid of a property in a hurry, maybe due to a move. Those homeowners would be more challenging to target. 

I don't see how a Realtor could make money until the property closes. A lease option is a rental contract with an option to buy. There may be people who are experts in the field who might have additional insight. 

It absolutely is fine to meet Realtors. If I were in your shoes I'd be completely honest. Tell the person you're new to real estate. Explain that you are looking for no money down opportunities and ask how he/she would recommend you get started. Recruit him as a mentor. That might be your best approach. 

If you are assigning a contract to the agent, that does not fall into a commissioned sale scenario. Personally, I split my wholesale fee 50/50. If I find the seller and the agent finds the buyer it takes an equal amount of work/pipeline development. I work with an agent on my wholesale deals and he helps me immensely with value of properties. Plus, he'll also go look at them for me. (I wholesale in a market that I don't live most times.)

Take it from someone who is getting her butt kicked on a historic reno, this is not a good strategy for someone new unless you are a contractor and know the construction numbers. Run away from this deal.

No. I would not have agreed to his request without a contract in place. You told him how you do business and if he doesn't like it, I'm sure you have others who will gladly work with you on a turnkey property with a good return.

You've got to look at it from a Realtor's point of view. If they did find a terrific no money down opportunity, why would they give it to you? Are they going to make a commission on a lease option? If I were working with an investor who said "no money down," I'd think that this person would not be able to close on a deal and I'd waste a lot of time scouring listings. If your strategy is no money down, it's a bit like finding a needle in a haystack. I'd work on strategies you could use to find your own opportunities. You could do postcard mailings, bandit signs, Craigslist ads. Figure out who would be motivated to offer no money down and come up with strategies to market to them. You could also take out a home equity line to get some funds, assuming you have a personal residence. With the money, you could either buy an inexpensive property outright or use as a down payment with traditional financing.

Hi. Sounds like you are in a great position. I began investing while working at a lucrative corporate job. What I learned is that the "bargain" MLS deals tended to need a lot of renovations. It's been a real hassle fixing up all these houses, especially when I was working. (I've since left the job.) I didn't do the work myself but it's still effort managing a handyman or construction crew. I'm currently in a financial dispute with contractor which is even less fun. So, my advice for a new investor who has a full time job: 1) If you want to get into rentals, do turnkey rentals. We have two turnkey properties (already fixed up with tenants in place) and they have been zero hassle. You could get two houses for that money in the right market. 2) If you are looking for a good return with even less hassle, consider doing private money lending. 3) If you want to understand finding good deals and making some cash, get into wholesaling. Definitely rentals are awesome but I'd never encourage anyone to use my approach of finding rentals that needed rehabilitation. It's not conducive to a full-time job. But if you are set on a rental, find a turnkey property with a good property manager to be your quarterback.

I think insurance is an individual question based on risk tolerance. 

I insure somewhere between purchase price and property value. If something happens to the property I want to make sure I can recoup my investment. This is a riskier position than having full replacement value but I'm willing to do it because I don't want to be insurance poor. That's me. You might be different.

I have gone through difficult contractors but I have not gone through a flip that isn't selling.

My advice would be to stay calm and give things another few weeks. See if you can talk to your lender or find another lender to bridge things. Know it's not an easy situation but you are where you are. Be proud of yourself for taking a risk and taking action. It didn't turn out how you wanted but I bet you've learned a lot. 

Wholesaling can be great in any area. You just need to understand what investors will buy.