All Forum Posts by: Ryan ODonnell

I haven't found a lot of accuracy with online value sites. Check the sold comps in the last 3-6 months to get a real idea of what it will sell for. If that's somewhat accurate it doesn't seem too bad except maybe the area if they're taking the plumbing and copper. There's buyers out there that have their own crazy version of what a deal is, so the question becomes can you sell it.

Ok...most of what you're saying I understand as true. Keep in mind though that the bank will not allow you to assign a contract and I've done deals where they don't state that you CAN'T and it's not specified either way.
So how can a bank deny an assignment on a contract that doesn't state that it can't be?
I'm more inclined to try wholesaling after this because as long as it doesn't say I can't assign it then I don't have to disclose any part of the assignment to the seller. I see why it's such a controversial practice.
No, I don't think my agent deserved more. He should have worked harder to find the right price. Don't get me too wrong, I'm not upset so much as using my mistakes and how this went down to learn and educate the people in my business that I think deserve to know that this can happen. I'm not a "newbie" so to speak but this was my first actual experience with a wholesale so the dots in the "strategy" of wholesaling just got connected. See, you can learn how the strategy works, but when you live it, it can be different and you can end up with questions. Also proof that no education, no matter how good, can make for a perfect experience.

Thank god for BP!
THANKS EVERYONE!

My agent is also my property manager. He may not be the smartest guy in the world, but he's honest and works hard. In real estate sometimes that's hard to find. I hated to see him take a 1500 commission and watch this lady make 3400 on it. So I thought well if what she did wasn't legal according to the contract then maybe the recourse is her fee.
So are you saying that the Assignment clause doesn't need written approval by me? I feel like the title company should have sent that over to my agent when they got it. Ignorance doesn't get you off of a crime so why should ignorance allow a title company to not disclose parts of a transaction?

The contract was a standard Indiana contract. Does anyone know if those are automatically assignable? I talked to an attorney who said no and one who said it has to be stated "not assignable" leaving me confused.

She would have bought the property, but my thought is that she knew if the Assignment clause (which she put together AFTER the "unassignable contract" was signed) was disclosed, we would know both the end buyers name and the amount she was making. What made me upset was that I didn't even have the real option of saying yes or no. Shouldn't I have legally needed to approve that?

So here's a scenario for y'all. I did a dumb thing and didn't use a lawyer on a sale, and because I was too busy it came back to bite me.
I sold a property as a cash deal on a standard Indiana real estate contract. Everything was pretty normal. The person who bought it didn't seem to have any intention of wholesaling it (so I thought). We get close to closing and she tells the title company that she is going to assign the contract to someone else. The title company says they've never really done a transaction like that, but she sent over the assignment signed by her and the end buyer. The title company calls my agent and tells him that she plans to assign the contract at closing. He doesn't understand that means there is a fee and terms to that and thinks she just didn't want it, but found someone who did at the same price =) (I've since explained to him the real intention of assigning a contract.) So he tells the title company that as long as what they are doing is legal he doesn't believe I will have a problem with it (and I wouldn't have).
The closing comes and we sign the few closing documents with the end buyers name on them. I paid no attention to the name or questioned who it was. Then I find out through some research that it is a company owned by someone I know.
The point is, I called the title company to ask how she was able to assign the contract without my approval. My agent nor I never saw the Assignment paper because they never disclosed it to my agent. The title company now is putting responsibility on my agent because it's "part of the contract" and they don't deal with that. The contract never stated "or assigns" either.

In this scenario, is there any recourse?

Mogi,
You can get the best of both world's using someone else's cash and then qualify for refi's through a bank (or part yours/part theirs). I started out by buying properties with my brother-in-law's money and then refinancing into longer term bank and private money loans. The only thing you're up against there is qualifying (should be no problem with a 9-5 and no debt GOOD FOR YOU!) and making sure you keep your loan-to-value under 60% (that's just my number, and I keep it lower if I can). You sound like a smart dude so just be patient and make sure you're doing something you understand. I've gotten anxious about deals and it always clouded my judgement about some aspect and I ended up mis-stepping on some part of the deal. That is the best way to learn though, cuz you never want to do it again!

RyanOD

Keep your money, educate yourself by reading. Talk to a lot of EXPERIENCED real estate investors that you will find are more than willing to share real knowledge based on experience. Don't listen to theory about how a deal or strategy should work. Take action on a small deal and always always always be willing to WALK away!

"Rehabbing will provide a good living and lifestyle. I don't see how it will make me a millionaire though."

To me, it's about what you do with the money once you make it. It's not how much you make, but how much you keep. That's a whole 'nother thread though. =)

I would say No to both. Depending on the area, and 500-525 doesn't sound like it could be a great area but I could be wrong, you can burn through 18k on turnover real easy on 3 props. Then again, if you have your team together, then you may be fine if you can do fix-ups cheap. You never know what a renter will do!

You might look into the commercial loans first. I haven't been able to find many lenders willing to write commercial loans on property that small nor residential. I wouldn't worry about the discount you're getting off the list price. Focus on the property and what the top dollar your willing to pay for it is. Later you'll notice some are 5% off list and some are 20%. As long as you don't overpay considering the work it needs and how long it will take to rent.