All Forum Posts by: Scott Dwyer

Hi Tim,

Thanks for your response. I appreciate and understand what you're saying.

Fortunately for us all the wedding plans have already been made. So it isn't as stressful as it was a month or two ago. I'm sure the week before the wedding we'll be pretty stressed but once it's over we''l have a lot off of our minds.

I do understand that deals are all over the place right now but why pass up an opportunity to make good cash if it's sitting on the table. No matter the timing. I've invested a lot of time in this over the last few months and I don't want to get cold feet just because of the timing. Some people look for excuses to not do deals out of fear. If it wasn't a wedding there could easily be something else that I could think of to make me hesitant. Basically what I'm saying is money comes to those who act regardless of fear and circumstances..

I'm not doing the rehab myself. I have a very good contractor who is a client of mine and who comes very highly recommended from a couple of my REI mentors. I understand I'm still going to need to check up on the property a few times a week to make sure we're still on the correct timetable and to make sure the work is being done to my standards.

As I'm typing this I received confirmation that the seller has accepted the addendum and has agreed to close early. Two weeks before the wedding. Her we go.

Thanks Josh i appreciate it. Still haven't heard back on the addendum so I have no idea If I'm going through with it. If the seller isn't willing to budge to 65K I'm not buying. That simple.

I'm not a motivated buyer and I don't want to get emotionally attached to any deal. There are simply too many out there to fall in love with one. When I hear something I'll let you guys know.

Will,

This is why this forum is my new favorite place. So many great ideas all in one place.

Will, is what you're describing also called a lease option? Unfortunately I don't think my parents want to wait two years to get their money back. They're retiring in two years and looking to purchase a new home out of state so I'm pretty sure they would like to have their money back in a reasonable and timely fashion.

Couple questions about lease options. Where do you generally find people in need of lease options? Do you contact local mortgage brokers for people who were denied for a home loan? Are the ideal candidates for this people who make a decent living but have bad credit for any number of reasons? Can you explain what a balloon payment is. Also, is the 10% up front payment then deducted from the final sale price or is that strictly payment for the option? I'm a little confused.

I don't think in this early stage of my REI
I'm in the position to be the bank but maybe a few more years down the road this could be an option.

See there you go. Now I'm going to scour the lease option section to learn a little more about it.

Thanks again for your input Wheatie. I really appreciate it.

You're correct, I forgot to add the .75% for title insurance. Which is around $900. Even If I sold for 115K I'd still be profiting in the 15-16K range. Which is pretty good for me since my current business is pretty slow right now.

Yes it is going to be tough juggling the new marriage and the rehab but I figure if we can get through this unscathed there aren't too many things that will be able to get between us.

As far as other junk fees that realtors and title companies try to pass off as necessary, I'm not buying. Everything is negotiable. I find it reprehensible that realtors try to charge a broker fee when they are getting paid from commissions. My realtor tried to include these in the preliminary closing sheets and I told him I will never be paying these so don't try.

Again thanks for your input. This site is truly a WEALTH of information my only regret is I didn't find it sooner. Keep up the good work guys.

Hi Guys,

Thanks alot for the responses. Just to answer a couple of your questions. I'm not using hard money I'm borrowing from a private source(parents) at a very good rate. No origination fees.

I have 7 good comps from the last few months all recent rehabs. All sold within 50 days in the range of 115K- 121K.

My Closing Costs out I calculated at 7%. 5% to commissions and 2% transfer tax. My Realtor is getting the commission on the way win in and out so I told him he would have to sell it for 5% but still offer the buyer's agent the full 3%. Of course he sounded hesitant at first but then realized he's going to be making a lot more money with me down the road and agreed.

What kind of ROI do you guys look for when doing flips? Does anyone even do flips anymore? All the people around me who know nothing about REI think I'm crazy. I keep telling them you can do anything you want if you buy right. And now is the perfect time for buying right.

Wheatie, I wouldn't mind having to pay $400-500 for three months. If it sold quicker I'd be pretty happy and wouldn't mind the couple hundred extra in premiums. Thanks alot guys. Still awaiting word on the addendum.

Hi,

I've been reading these forums for a little while now and have learned a tremendous amount in the short time I've been here. I was wondering if anyone could help analyze my first RE deal?

I put a 4 BR/1.5B house under contract 10 days ago. I have it under contract for 70K. My ARV is 123K(Appraisal). My rehab costs are 21K.(not to exceed quote)

Since rents in the area aren't as high as I'd like, around 1,000/month, the property doesn't cashflow. I'm thinking about flipping this property since it seems like the only option I may have at this point.

I've sent an addendum to the seller today to drop her price to 65K to compensate for overages in repair estimates. I have an inspection/contractors clause in the contract where I can back out after the 15 day inspection period and recoup my deposit.

If she accepts the addendum at 65K my total in money is 88K(65K+21K rehab+2K CC) = 88K

If I sell the house for 123K my gross profit is 35K. Subtracting 7% CC out ($8,610) my margin is $26,390.

My monthly holding costs are approx. $500/month.(incl. taxes, ins., utilities & interest on loan).

Is this a deal? Should I be pressing the seller to 60K?

If the property doesn't sell for six months my holding costs are ~3K. Bringing my net profit to $23,390.

I'm having trouble sleeping the last few nights overanalyzing this in my head. I understand fear is a good thing and is very natural when doing something like this for the first time, but I keep hearing this voice in the back of my head telling me to pull out.

As an avid poker player I understand that scared money doesn't make money, but I can't shake this voice. It seems to get louder and louder as each day goes by.

Oh, I almost forgot to mention I'm getting married in 4 weeks. Yeah I know I'm crazy. The closing is scheduled for the day before my wedding, although I'm trying to move it up 2 weeks.

I thank you in advance for your responses.