All Forum Posts by: Pedro Amador

1 - So it depends how the leaseback was written. By the 'hold', my assumption is you're referring to a deposit? Just like any rental situation, there is a security deposit that sits with the new buyers while the former sellers live in the home for x amount of days. After the time is up on the leaseback, the funds are returned to the seller as long as it is deemed the house was taken care of within reason. The 'rent' section for the length of time is typically separate from this deposit so that's my answer with the assumption you're referring to the 'hold' as the security deposit.

2 - Discuss what your plans are with the sellers turned tenants. Technically, it is your house so you can do some work but you also should respect their space while they gather their items to move. Usually in lease agreements, there are sections saying the owner can only access the house with prior notice, sometimes it says during business hours, and with proper notification before entering the premises. It all depends on how your lease back is structured in Texas. So in my experience, it's been more about open communication with what the sellers are comfortable with during the lease term.

3 - The main concern with the leaseback is that you have strangers living in your home. Sometimes people begin to not care when that's the case and they may not take great care over the next 45 days. Also, the worst is on your final walkthrough, all the appliances are working. Then you have the leaseback and 45 days later, when you get into the house, or simply anytime after the initial closing date within those 45 days, your water heater breaks and it's still your responsibility to fix even though you haven't stepped foot into the home. With that, home warranties are incredible. I usually get mine for clients as closing gifts through American Home Shield. 

thank you for your time sir!, so this is a property a local investor came across and he says he doesnt want to deal w it cause its too far so im assuming i will have to make accomidations with him ? 

my worries are this, i have to wait 45 days before i can even get started w demo. then anpther 4 months before its sold so idk if i want to run a 5-6 month project looking at maybe maybe a 45 spread after taxes and closing cost.

also the house needs heavy remodel. roof ,foundation, hvac, landscaping everything. so im not worried about the ppl taking care of the home at this point because its trashed. 

I would just focus on doing a deal by JVing with the flipper and building your flipping skills. Use whoever the flipper uses for the funding initially. Get the experience first then it will be easier to find your private money lender. As others have stated, it's going to be hard to get funding when you have no experience so focus on getting experience. 

 Great advice Jay. Especially the part about concentrating on your skill level and executing. In order to get the skills then you have to get experience. So perhaps a good approach would be to find a deal then bring that deal to a flipper and work something out between you and him. That way you can see the process from start to finish and build up your skills.

For your example 50k at 10% annual is 416.67. 

If you are trying to get gap funding, the private guy is going to be 2nd position. Some people dont like that OR they will require a higher interest rate than that. I have used a 2nd a few times. I usually pay 12% interest only. It is usually a project went way over budget and I have 1 or 2 other projects going and need to conserve on hand cash.

yes annually but i was thinking maybe 6 months . To start and show him i can be trusted to move his money . I have not done an actual flip on my own but i have been around i have a mentor i have a construction team etc . What i wanted to use the funds was really for the down payment for the HML with whatever is left over I will use to pay for the rehabs all upfront now having said that I do have a good amount of capital myself im just trying to use OPM