All Forum Posts by: Account Closed

Good point. It is always good to be safe. And I Don't want to take advantage of contractors, but they  also know they don't get all jobs they bid on. 

If u are dealing with a small job, hiring ur own crew may reduce ur cost. 

Charles 

I believe it is safe for the beginning investor to learn how to control real estate with a delayed settlement contract with right of possession and subject to assignment to a third party during the delayed contract period (you can delay a settlement for as long as you want, 2 months, 2 years or longer), when you have the "right of possession", you have an opportunity to fix it up, put it on MLS, have an auction or assign your rights to someone else for more money.

Control is the key word here.

Charles

That's a good questions; we are developing a three story in 2 buildings into a night club, the demo crew are professionals, removing walls, floors, roof and removal of asbestos from the building.  Our contract with the contractor is under $500,000.  The contractor selected the demo company, I don't know what the charge was, but I am sure the contractor negotiated a good price.

A suggestion;  get bids from demo contractors, than see if you can hire your own people at an hourly rate to get the job done.

Charles

Sounds like you are knowledgeable with tax and the IRS, Welcome to BP. I have conducted a number of public auction in your area (Gwynn Oak). I have a friend who is an IRS Field Representative.  He tells some very interesting stories about his field audits.  Stay in touch,

Charles

Chattel for Equity

Unlock the potential of your old stamp collection, jet ski, or RV. Identify the seller’s passion, hobby or interests and barter your down payment. Use chattel in place of money, “As good and valuable consideration for this Agreement, Seller accepts a 23’ fishing boat with motor and three boxes of tools as a down payment valued at $12,000.”Barter items that you already own or purchase them at a discount, and you’ll be ahead of the game.

Alternative; offer stuff to the seller as part payment for their property  - a car, truck tools, antiques and other stuff you have laying around or neat stuff you can buy on time.

The seller wants more than you are willing to pay, so offer him things that will reduce his asking price and will give the you a reasonable equity position.  The seller can always tell his neighbors and friends he got what he wanted for the property. 

You got what you want and emptied your garage of stuff you didn't want anyhow.

Charles

Seller “Refi” for Takeover

This no-money-down technique is as amazing as it is simple. Ask the seller to refinance the property for your offered price,  (for 30 years fixed at no more than X%) subject to a one-time qualified assumption by you. Take over their loan at closing. The seller walks with cash, and you buy with no money down!

If a seller has equity in the property and has been unable to sell it, ask him to get a loan on it, let all parties know that once the property is refinanced, you are going to assume the mortgage with a release of liability for the owner.  

An alternative; the seller pulls as much cash out of the property from a refinance as he can and the investor takes title subject to the new existing financing.

The seller has the cash and the investors has the property.

Another alternative ---- ask the seller to give you X$ for repairs at time of settlement.

Another alternative ---  agree to give the seller a Hybrid bonus once the property is sold....10- 20 - 30%.

The hybrid usually works when a seller is accepting less than what he wants and the informal  partnerships works great.

Charles

Creative finance and creative negotiating is about the same thing.  

There are many definitions for the so called creative stuff, so what it is? In my opinion, it is a buyer attempting to put together a transaction that is going to benefit himself, while trying to get an agreement from the seller to go alone with the purposed offer. 

Some times an investor is compelled to think way out side the (so called) box, to be able to reach real deep in order to put together a deal that makes sense. Many times the investors is working with little or no money or ability to get a loan......but he is motivated to make a deal work and make money.

Here are a creative idea that may work for you............

Control and Roll:  Control a property with a delayed settlement with the right of possession and contingent on assignment. What this means is that the investor is offering an amount that he feels he can assign his contract for more, while having the right to occupy the property, improve it, market it by MLS, World Wide Web, mailings, signs on the property or newspaper ads or by public auction.

Once a contract is ratified by all parties, the buyer is considered to have an equity position in the property.

Here are some clauses that should be in the offer; "It is understood that the buyer is making this offer with the intent to make a profit by short term assignment, the buyer will have the right to improve the property and to advertise it for sale." 

Once the property is "Controlled" with a long form or a skinny contract or a hybrid contract, the investor's job is to find an someone he can assign his contract to......for all cash and in "as is" condition. (If there is a hole in the roof, the buyer gets the hole and the roof.)

You may want to consider a public auction (with a reserve) ..........so.....if you are in for $150,000 and the assignee takes it off your hands for $160,000 (hopefully more), at settlement, your name is on the HUD-1 to collect a $10,000 assignment fee.

This system is known as selling real estate you don't own!  Think about it, you cant get any better leverage.

Charles

Over 40 years ago I started because of fear of poverty. I fear no more. 

Take it one day at a time,  look at three properties per day, keep a journal keep a list of the cost per square foot for every property looked at, make comparisons.

Read everything you can about real estate investing, find a local mentor.

Charles

Thank you Ned for mentioning my name, what is old-school? Does that mean I'm an old man, an old real estate fox, or  working in an old building? 😂

We have some good equity based properties coming up for public auction. Hope to see you soon. Getting back on the bike. 

Charles