All Forum Posts by: Pratik P.

@Deneuve Brutus Thank you!

@Scott Vogeli Thanks! It was in Elk Grove

@Account Closed Thanks! I didn't know their service charge varies based on location. Yeah they definitely had some big repairs in their assessment that I wasn't expecting. 

@Bill B. I know right! Didn't make much sense to continue rehabbing it.  Thank you :]

We recently unexpectedly sold a property to Open Door and wanted to share the experience. 

We got a call from a seller that needed to sell her house very quickly. She wouldn't tell us exactly why but she was willing to sell the house to us at a discount if we could buy it in 4 days. We see the house and say okay let's do it....we close. 

The house needed maybe 15k in work. New carpet, paint, landscaping and other minor repairs, then it's ready to be listed. But it was already in "livable" condition. 

Purchased: $280,000

Rehab: $15,000

ARV: $360,000

I heard about Open Door so I put in an offer request on their website just out of curiosity and they came back with a pretty high price. After running some numbers it made more sense to just sell it to them instead of spend 2-3 months rehabbing and listing it to net maybe a bit more. 

Their offer: $376,000

After their 6.5% service charge and closing costs: $349,000

Their repair assessment came in around $14,000 which I felt was high. So I asked them to reduce to $10,000 which they agreed to. 

So Net proceeds ~ $340,000

I was pretty surprised with how much they offered and how fast they went. Did the assessment a few days after contract. The fastest they could close was 2 weeks, which they did right on time. And their contract said the seller could back out at any time???

Seems like their business model is basically "wholetailing". Buy houses that are already in decent shape, get a repair credit from the seller, do the repairs quickly and put it right back on the market. Their profit margin seems to be pretty thin though.

@Elijah O. There is no way to get a POF if you don't have a bank account, CD, brokerage account with those funds.

The best thing to do from the start is be upfront and let the seller know that you will be using someone else's money for the transaction. Don't create a fake POF, that's fraud.

@David Iniguez I would be cold calling the tax delinquent list if I were you. If you have the budget to also mail, it would be a good strategy to mail and call at the same time. High equity out of state leads are good too. Check out taxdelinquentlist.net, tax data is updated frequently

Yeah we need to borrow money if we want to do more than one or two deals at a time. I'm curious to know how that would work, although I prefer not to be put in a situation to find out lol

@Jay Hinrichs Now are you saying you have to have the cash sit in escrow for the whole process in all cases or just in cases where your initial contract says you're paying cash? Our contracts say that we have the choice of using cash or hard money for our purchases. I would think that most people trying to buy a house won't be able to leave cash in escrow.

I had this conversation with my attorney after I let this lady back out of a contract and then she goes and sells it to someone next month for 5k more....That was a 60k profit deal. He said as long as you and your lender are ready and willing to close on the agreed date, you have a strong case for specific performance, although an expensive and time consuming one. 

I don't ever want to sit through a 1-2 year legal process but starting the lawsuit would cloud title and at least make it painful to the party in breach of contract. They might decide opening up a discussion with you would be the best way to go, instead of just go dark. Might be worth a couple grand to save a big deal. 

@James Galla If your breaks are squealing and a mechanic approaches you "hey I heard your breaks need some work, I can help you with that if you'd like" Is that being a vulture? I don't think so. There's definitely a certain way to approach probates with respect. It's better to have a "hey we are here if you need us" approach than "We want to buy your house asap! NOw!!!"

Wholesaling has a bad reputation because 99% of people who call themselves "wholesalers" don't do a single deal and understand very little on how to run the numbers. The term wholesaling itself is very vague so you can label any sleezeball a "wholesaler" and there's no barrier to entry. 

Is there a lot of flipping activity going on in your market? If so, then there are wholesaling opportunities. 

Wholesaling is about finding DEALS. You can move to fix and flip, but then you still need to source deals. You can go to buy and hold....but you still need to find deals that cashflow. Whether it's rehabs, assignments, buy and holds, you have to find a good deal. 

The most successful investors in real estate have an effective marketing machine that feeds them opportunities constantly. I would re-visit your marketing plan. 

I wish but you can't.

Imagine all those sweet sweet amex points you'd get. Free flights and hotels all day lol