All Forum Posts by: Rich Urban

Yeah..if 200 bucks is all that you have, I'd save my money and buy some bandit signs..:) Check out supercheapsigns.com (I am in no way affiliated with this company), and order 100 of their large blank signs. Cut them in half and write "Cash For Your House" or "We Buy Houses Cash" with your phone number in dark magic marker. Go down to Home Depot and pick up a few bundles of wooden stakes and some nails. Attach the sign to the stake and put them all over town..:)

Read everything you can on these forums (you'll find a quite a bit of information online for free).

Join a local real estate club and network..ask tons of questions and get out there.

As far as courses go - I personally like Ron Legrand's "Wholesale/Retail" course. You can sometimes pick it up on Ebay pretty cheap.

That Assignment Contract is fine. It's pretty simple. For a double closing, you'll just use a standard contract & explain to the title company that a double closing is to take place. Find an investor friendly title company, and if they'll do a double closing...make sure that they've done them before!!

Your best bet is to do a simple assignment UNLESS your profit is over $20,000. I've found that people start to get a little testy when they know that you're making more than that on a quick wholesale. That's my personal experience and you may have success otherwise. I just made that my own personal rule..:)

I've tried several different types of Standard Buying Contracts & found that Florida's standard "FARBAR" that realtors use, works the best for me (I'm in Florida). It seems to calm the seller when I show them that I'm using the local standard and not something that I created on my computer. I've found that those "Real Estate Investor Friendly" contracts are overly in the investors favor. The problem is that anyone with a brain could read that and think that you're trying to scam them. After all, who wants to sign something that is absolutely geared to protect me & screw them over..:) I then, attach an addendum explaining the details of the transaction & any "weasel clauses" as well as the inspection period that I may need. I then have the seller initial each line and sign the bottom. While they're signing paperwork, make sure that they sign your "Authorization To Release Information Form". This makes it easier when getting payoff figures on mtg's & liens.

As a side note, my addendum has numerous weasel clauses that I don't really need. I cross them off in front of the seller to look like I'm giving up more concessions.

I'm pretty sure that the BiggerPockets "Forms & Contracts" link on the left has a few standard contracts available to you. If they don't, or you want a copy of what I use, just PM me and I'll email you one.

Very important - When you are writing up the contract between you and the original seller, be sure to put the words "And / Or Assigns" directly after your name. This is saying that "YOU" and or whoever you assign the contract will have the right to fulfill the agreement.

Primo_Coach - I'd say you're probably correct. When I first started out investing in real estate, I was quite fearful of getting involved in a "Bad Deal".

What really helped me immensely was finding a mentor at my local real estate investing club. For the new investors that are reading this, I would first find a local real estate club and shadow someone that is doing it day in and out. Just make sure that you don't get caught up with a "BS'er"..there are tons of them in this business..:) This will give you the confidence to move forward if it's a good deal.

Keep in mind though, a local investor that is making a ton of money in this field will probably not be so fast to give up their secrets. You have to make it win-win. When I started out, I drove through neighborhoods looking for vacants and wrote down addresses and info on about 100 houses. After that, I took the top investor in my area out to lunch and showed him what I was working on. Obviously, he saw that I was willing to work and bring something to the table. A great partnership formed after that.

Too many new investors try to find a mentor and have nothing to bring to the table. Let's be realistic here..if you have nothing to offer, they have no reason to help you. If you have cash, offer to fund their next deal...if you have good credit, offer to use your credit on a deal...if you have time, put in the time first and then SHOW them your efforts or bring them a deal.

Have you ever wondered who's getting all of the mind blowingly profitable Real Estate deals in your community? Well I'm "That Guy"..Talking to owners in distress has really become my thing because I follow a system that none of my competition has been able to recognize.

It's quite simple actually, and I want to show you a few of my tactics so you too can be the one in town that grabs deals that all of the local investors are grabbing for.

Allow me to set the stage for you. Mrs. Johnson, a motivated seller with only 30 days until her auction, has called every single investor in town. If you had a bandit sign or an ad in the paper, you got a call from her. Every investor in town has also run the numbers on the deal to find that it's a whopper. The kind of deal that would let them put their wholesaling business on cruise control for a few months. You've received that very same call.

What do you do?

First off, "Other Investors" are irrelevant because you're going to be the one that closes the deal. For me, I like to be the first one to the house....I try to find out if she's meeting with other investors and what time, then I make sure that I'm scheduled in to be first....

A few things I would do:

1. Do research on the property and make sure you know the neighborhood comps. Print up the lowest comps that you can find...bring them with you. Print up the property appraisor's sheet on the property that you are visiting. You will look prepared and efficient.

2. Build rapport before you start even talking about the house.

3. Emphasize how you get things done quickly and easily. You're the best home buyer in your area. Let her know that she can have confidence that you'll handle everything right away and correctly. Your offer is really the best deal for her..she may get slightly higher, but they're not experts like you are.

4. If she balks at your offer, be sure to whip out those old comps and say..."I know Ms. Seller...I thought that I could pay more than that too...I really wish I could...EXCEPT...whoever bought 101 Maple Street really screwed it up for all of us. He paid so little that he brought down everyone's property value. John Doe at 202 Maple Street did the same thing..." You get the idea..make sure that you're on her team working against a greater evil. In this case the NEIGHBORS that forced you to offer such a low price....:)

5. Don't leave her with a copy of your contract EVER!!! If you leave her with an unsigned contract, she'll shop that bad boy around town so fast and every other shark will have a copy of your contract. You'll be used for leverage and you don't want that. You want to be the guy that gets the deal. I personally don't leave without a signed contract....but if you're not as ballsy as I am, you could always tell her to speak with the others and give her the courtesy of a call before she signs with anyone.

6. Make sure that you put "AND/OR Assigns" on your contract so that you can flip that contract to another investor.

Now go close that deal!

Well, where I live in South Florida, you've just described the status quo..:)

I guess it really depends on your location and how the judges / clerks / support staff treat their cases. Depending on where you live, there are laws in place to protect the tenant in situations like this...requiring the judge to have the landlord present his entire case. Believe me, if they can bust a "Greedy Landlord" on something, they'll do it in a heart beat. EVEN IF the tenant destroyed the place and hadn't paid rent for 3 months. It's just the way it is.. :D

Anna makes a great point that I'm always trying to impress on our mentoring students. If the numbers work and you know that it's a good deal after analyzing it, you can always lock it up under contract with some contingencies, and a good amount of time to back out (I usually give myself 15 days). If you discover that it's not such a great deal..you just let them know how it doesn't fit into your buying criteria and move on to the next.

HOWEVER, if it is a good deal and you're sitting around wondering..someone will snatch it up and have control of the property.

I'm a real estate investor in Jensen Beach, FL - I try to concentrate my deals from: Vero Beach down to Miami. If you have anything that you want to partner up on, or need some help on a deal let me know!

Regards,

Rich

I'm located in Jensen Beach, FL...about 45 minutes north of West Palm Beach. You can add me as a Colleague on here and let me know when you're in town.

I'm always open to partnering up on good deals.

Regards,

Rich

PS - You'll absolutely Love It Here! :0)

Maureen,

Because you have 0 savings and a low credit score, Wholesaling is your very best option. Wholesaling (commonly referred to as flipping houses) is the fastest way to create cash to fund your long term deals.

What you'll be doing is finding a great deal on a property- getting it under contract - and then assigning your position in the deal to another investor that HAS the good credit and cash.

You should expect $10k - $25k per wholesale deal. Some wholesalers are happy with $5k...it's a point of personal preference and how good the deals are that you are able to find.

I wouldn't recommend getting involved in a rental property until you have at the very least, twenty thousand dollars sitting in the bank available to you. If you don’t have these kinds of funds available, how do you expect to fix an air conditioner when it breaks or solve a leaky roof issue, or pay the plumber that comes out at 2 in the morning on a Saturday night to stop the flood in your basement? These things all cost money and there will be a time when you’ll have to plunk down a nice piece of change.

Feel Free To Ask Questions Along The Way...

Rich

Although the post above is a great idea, and wholesaling has made me quite a bit of money, that's not going to really help you here. This guy doesn't want to do the rehab or any work for that matter...he just wants a return on his money.

Since you'll be holding this property for a long term, you DO NOT want to use him as a hard money lender either. Going back to "Everything is negotiable", there are a few ways that you can go about doing this deal. Actually, there's hundreds of strategies that you can use for this...entire books are written on the topic. Here's a few that I'm most comfortable with:

1. You can use this investor to secure immediate financing on deals at the high rate of interest above, and then you can refinance out to more reasonable terms.

2. You can do a complete partnership where the investor puts up his capital, and in return for: finding the deal, managing the deal, and maintaining the property will receive a 50% share in profits and equity in the property.

3. You could see if he wants to act as "The Bank". He's going to want a bit higher interest rate than the average bank will pay, but not quite so much as hard money would cost you. I don't know how your credit history is, so it's hard to give you a figure on what you'll be paying in interest. Prime is at 5% right now..you're probably looking at 9%-10% interest...but see what he has to offer. "He Who Speaks First, Loses"..:)

Points should be minimal, I try to pay no points, but he may want 1 or 2 points. These are just guidelines and can be tweaked to ensure that both parties are satisfied.

Make sure that there is not a Prepayment Penalty clause. Chances are, you'll eventually want to refinance or maybe cash out early. Even with great planning, life can tend to be somewhat unpredictable. What if you desperately need cash and you decide to sell this rental property for the capital. You don't want to have him cutting into your profits because you are paying him back too soon. If he insists on a Prepayment Penalty, make it is short as possible.

4. You could even have your investor purchase the property, and lease option it to you at a low monthly rent (with rights to sublease the property). You would then sub lease the property to your tenant & exercise your option, purchasing the house at a later date when you can get more traditional financing. (This would be the last pick because you have very little control over the deal in this one).

Best Of Luck,

Rich