All Forum Posts by: Rob Golob

Thanks in advance - I need some guidance on a sale that is effectively a "transfer" to a family member.

In 2010 I bought a lot with a shell of a double wide trailer on it.  We fixed it up (quite extravagantly, I might add) and my mother-in-law lived in it until her passing.  Now I am selling to one of her sons.

It will be a no contingencies, no inspections, no nothing deal.  We will spell out a cash price and handling of taxes. 

I have warranty deed for the land - no title for the trailer.  That in itself will not be a problem.

I have a copy of the as is / where is contract from which I purchased the property.

Should I simply refill in the blanks?  If so, do I just call 1800-Title Company?

Should I pay a realtor a commission to draw up the contract and present it to a title company?

Any other questions I should I be asking?

Sub $20K purchase.

Thank you

@Jake Recz

Your comment:

"It gets better. The grandmother pitches in asking if the rent is negotiable. My answer is obvious. She keeps pushing. I tell her that I will call my bank and the town to see if I my taxes and mortgage is negotiable."

should be in a thread entitled "the dumbest things landlords say."

Agree with above - And yes, replace the carpet.

You will also have to closely inspect the baseboards in the area as well as lower levels of the dry wall.

Also. if you have any floor vents, I'd bet a nickle they are trashed as well.  And possibly well into the duct work.

Does this sound like experience?? - Yes.....

Unfortunately - Pull carpet and pad and discard.  Painstakingly Kills ALL potentially contaminated areas.

Replace flooring.

I guess I'm confused.  Who is selling the house?  How was the $189K asking price conveyed to you.  You want to offer $55-$60?

Play along...

Your sister: "Hi Daniel.  I just listed my house with XYZ for $189K.  My realtor thinks it may be a little high, but we think we've already discounted it for some repairs I think it will need - probably $10K."

You: "Well sis, I've looked at the house and it really needs $25K.  And I think your $189K is optimistic if it were already fixed."

Sister: So you are saying its really only worth $164 tops as it sits?"

You:  "Yes, I'm afraid it is.  And don't forget, someone buying it will still want a little more discount to account for the time and risk of fixing it up."

Sister:  "Wow, so if my 189 should be only 180 and take off 25 for repairs and arbitrarily another 25 for risk etc, I can only expect $130.?"

You:  "Yes - I'd say that's about as much as you will get." 

You:  "But wait, I've got a great idea.  I can buy it from you and rent it out.  After my calculations I think I can offer you $55 - $60K - after all,  taxes, and ins, and maint, and lawn, and vacancies are pretty high ya know."

Sister: "Oh Daniel, You're such a sweetheart.  I'll take it!!!"

Part of the problem may the the term "wholesale."

Typically a wholesaler buys items in quantity and then sells to a retailer (or possibly an upstream wholesaler).  In real estate I envision this as buying the block of 10 houses from the bank and then offering them individually to the market.   That would be a wholesaler.  An issue may be that in real estate, there is typically a level that actually alters (fixes up) the property.  That is known as the flipper.

The reality is that what we call a wholesaler is a broker (Oh my......)

I guess since the work broker has legal implications, we cannot call this entity a broker, but that is the function they perform.

Heck of a market if "$135k is not really profitable on this property."

Your numbers:

240k ARV, 135k buy, 20k "work"

That's all in at 65% of ARV

Exit:

230k discount sale, 23k commission and selling / holding costs, 155K all in

$52,000 profit - not bad for not profitable.

By the way, I'm not picking nits on your whole philosophy / thread - Just commenting on your not profitable post.

I'd love a few of these bad deals......

Most of the previous posts not withstanding - Nice post and explanation, @Jason Timmerman.