All Forum Posts by: Kris Walker

@Patrick L. Thanks that makes me feel better!  I'm believe my Agent mentioned that he wouldn't be taking both commissions.  Not sure if he just made a mistake or if he does have some other angle he is working. 

@Andrew Jordan  Agreed I'm definitely learning from this one!

What could I have done differently in this case to avoid these issues?  Agent brought me a deal, I made an offer and the seller accepted. 

@Bill Gulley   Thanks very informative!  Not sure I understand your comment about the fee agreement,  I'll have to read up on that.  I believe I'll just flip the property as originally planned.  I'm sure I'll learn a lot going through the process of flipping it.

@Brent Coombs I question why the other investors are offering so much. I assume they know something the Agent and I do not. The property is in really bad shape and by my calculations needs around 35k for the rehab. Agent thinks ARV should be around 155k but I question that. I believe it should sell for around 135k but what do I know I'm the newbie here. Anyway I don't believe the Agent should have known a higher offer would come in. Seller is an elderly gentleman that just wants out of this run-down house. He is closing on another property at the same time he is selling this one.

Thanks for all the responses! Please keep them coming so I can make a decision on this. Seems like something that should have been simple has become complicated because the Agent listed the property when he didn't have to.

Not a short sale. 

If the property isn't listed on the MLS does he still get his commission? I figured it had something to do with that. I asked him why he needed to list it and he said that it would just be easier that way. At the time it sounded weird but I didn't follow up.

I don't feel like he is trying to do anything wrong.  With that said I think he probably learned a lesson on this one.  If there is no reason for him to list it I doubt he will take that route again.  He is a relatively new Agent, maybe 5 years experience.

With that said the seller had agreed to my offer verbally several weeks before it was listed. An then the day it was listed my contract was written up and signed.  So in that case would he still be required to present offers to the seller?

Should I just go ahead with my plan to flip the property instead of opening a "can of worms" by trying to go the wholesale route?

Hello everyone!  I posted a few months ago that it's time to get started. 

So here I am with my first deal under contract. My realtor brought it to my attention when the seller approached him. We walked the property with a contractor and I made the seller an offer, which he accepted. At this point the property was not on the MLS.

My realtor said that he needed to put the property on the MLS and then as soon as he listed it he would write up my contract to purchase.

Did he really have to list the property first?

Shortly after he listed the property he started receiving calls about the property from other investors.  My contract is written up to purchase the property for 68k and my agent is saying that he is getting offers up to 85k.  I was initially planning to flip this property but this seems like a prime opportunity to get my feet wet and wholesale this deal. 

Does anyone see any reason why I couldn't wholesale this deal?

Since my profit would be so good I would plan on doing a double closing.  The contract indicates that to assign the contract I would need the sellers written approval.  If I double close would I need the sellers approval for that as well?  Even so getting the sellers approval shouldn't be a problem.

@Rachel Gill Don't give up!  I am just starting out also and have came across several naysayers.  If they aren't your spouse, great, more deals for you.  If they are then communication is key.  Point them to the forums, pod-casts and the Ultimate Beginners Guide.  

For me having a salary and investing in my 401k isn't something I want to count on exclusively. Diversification is a term usually applied to stock market/retirement investing but is something I want to apply to my income.  Income diversification to me is the key independence.  If I lose my job, no problem I got another income stream via rental cash flow.  That's the plan anyway, now I just need to get that first deal! 

@Crystal Smith While working with a broker for pre-approval this issue came up.  Basically it seemed like if I was only planning to flip that they may do it but only if I planned to do future business with them.  Since then I decided do business with another broker.  Mainly I just want to do the right thing and build a healthy relationships.  

@Doug Shapiro My intention is definitely to go the buy and hold rental route but I figured a few flips could help build my cash reserves. I guess my fear is that once I reach 4 properties or so I would be maxed out with mortgages and not be able to continue investing. I agree about looking at this property as a rental though. If I reduce the reno costs to around 20k and refinanace 80% LTV then I could walk with around 15K cash. What do you think about this approach? The place should rent for $1250 - $1300 which by my calculations should cash flow around $200 a month using the 50/50 method.

@Wane Tango  I agree the 15k is a narrow margin but it is an amount that I would be proud to make on my first deal.  My calculations actually put the number closer to around 18k with a conservative approach.  That number is before holding costs and capital gains taxes though.  So I would be expecting around 12k cash.  Also this house is not even listed.  My Realtor brought it to my attention.  Evidently the owner is an elderly gentlemen that is looking to downsize.  As far as the inspection goes the house is pretty much destroyed inside and needs a complete remodel, hence the 30k reno estimate.  

Thanks or the responses from everyone.  As I said before I am really just trying to find that one that gets me started.  

So as the subject says I finally have a deal that might get me off the fence.  It's on a 3/1.5 townhouse that I am looking to flip.  Take a look at my numbers and let me know what you think.  Take it easy, I'm one of those newbies!

Purchase 75,000

Reno 30,000

Cost to Sell 15,000

Holding Costs / Taxes 5000

ARV 140,000

Profit 15000

Agent thinks he can get closer to 145k but I used 140k in my calculations to be safe. Anyone see any issue with my calculations?  I would be using cash for the purchase and reno.  Another option I am contemplating is to finance and keep it as a rental and reduce reno to around 15k.

Also I have a question on financing flips.  If an investor cannot purchase a flip all cash is it a bad idea to finance?  The reason I ask is because I know the broker doesn't make any money on the deal if you sell it within six months.  Do you worry about that?

Looking forward to your comments!

Thanks

Hello everyone! I too am one of the many lurkers around the forums.  Just reviewed my old emails and realized that I joined the forum in January 2011.  Guess it's time to get started investing!!  I have been working with a real estate agent and looking around for the past six months or so but haven't found any deals to get me off the fence.  Anyway figured I would introduce myself and start participating.  Finally 2015 will be the year I start!!  Mainly looking to be a buy and hold investor but flipping could help build some extra cash to build my portfolio.