All Forum Posts by: Rob Brewer

Does anyone use radio advertising to market for leads? Are there legal issues with this?

Hello all!

My most recent post was in regards to the FHA "90 day flipping rule" and had I read J Scott's book (which I have since purchased and read) I would have known the answers. But anyway...

Here is my situation that I'm seeking advice about. My first flip is on the market waiting for its new owner. I have most of my $$ wrapped up in this guy so I'm a little nervous about getting another flip until it sells. But, I'm SO anxious to get my next flip going and think I have the next deal lined up.

I have an opportunity that I feel will give my business a little traction.

Purchase Price - $130k
Fixed costs - $25k
Rehab costs - $60k
ARV - $250k

Option 1 - My buddy is buying the property (closing scheduled for 7/31/13)and is okay with doing a JV deal. His only reason for buying this property is to section off 2 of the 4 acres of land for himself. He would purchase the property and pay all carrying costs. I would supply rehab money (which I don't have right now as mentioned above) for a determined profit split.

Option 2 - My buddy buys the property and I would buy it on contract from him. I would pay all carrying costs (he still gets 2 acres). But, I would find another partner to bring the rehab money to the deal for a determined profit split.

Option 3 - I put the property under contract and wholesale to another investor.

My main goal, obviously, is to put as much money in my own bank account as possible to help grow my REI business. I think "option 1" is the best way to do that. The $60k rehab money is my biggest hurdle. I've already tapped my private money person for the first rehab and would feel a bit uncomfortable asking for more money until I have her paid off from the first deal. Do HML offer rehab money only...since they wouldn't be listed on the deed? I've thought about a construction loan...

This is why I think this deal could give me some traction....money would be less of a hurdle on future deals!

What advice can you seasoned investors give me in this scenario?

Thanks for the replies everyone. I will definitely be more aware of this situation on future deals. I've worked with this wholesaler on other deals so perhaps we can work something out like.

Hey BP friends! First let me send a shout out to J Scott for the podcast he did with BP (episode #10 I believe). I thought you were describing my first flip!!

Here's my dilemma. Wholesaler purchased a home 4/4/13, I bought the home from wholesaler on contract and transferred title to my company 5/24/13. During that time I rehabbed it. I accepted an offer after only 7 days on the market! I was excited to say the least!

Buyers are using FHA financing as they don't qualify for conventional financing. Their lender says they can't underwrite the mortgage because there have been multiple title transfers and HUD rules say

"no pattern of previous flipping activity for the subject property as evidenced by multiple title transfers within a 12 month time frame".

How to other wholesale deals get around this issue? Do you just not sell to FHA financed buyers?

Thanks!

I've noticed a LOT more short sales here in the Des Moines market compared to REOs.

I've never done a SS deal, but my understanding is it's just a "throw a bunch of offers at the wall and see what sticks". With so many SS coming thru the system it makes it hard to plan.

Hey Brian! Welcome to BP!

I know just how you feel. I'm a newb too....haven't done my first deal yet. There is so much info for real estate investing including these forums that you should read. I recommend attending a local REI club meeting and just start talking to people. I found a local investor that is successful to take me under his wing. Take them to lunch and just talk with them.

In my opinion a mentor will be my best resource to start my investing career.

This thread has been fantastic!

I agree that the BEST way to get started is to apprentice under a seasoned rehabber. However, what about the person that needs to earn money now? The low-cost/low risk benefits of wholesaling are very attractive to a newbie like myself.

I'm unemployed and we'll be using the last of our savings to get into REI.....seems logical to me to learn wholesaling to make the cash.

Am I wrong?

Hey Kyle! Welcome to BP. I'm new as well. I've heard a lot of people use bandit signs, websites, word of mouth.

Thanks Phillip Dwyer. The market is on the upswing here. There are still good deals to be made though.

Yeah, Des Moines is making some nice improvements for many of the demographics here.....families, nightlife, downtown housing, etc.

I'm looking at SW side because I know the area a little better.

Thanks guys.

Will - thanks for the advice.