All Forum Posts by: Account Closed

@Ember Meadows

In the buyer section of the contract, I write

ABC Fund, LLC &/or assigns

When it comes to "opening title" I then take the contract to the title company that I wrote into the contract with the earnest money check made out to them. I always do options so I make sure to give my option check to the motivated seller the day I sign up the deal. 

It takes 3-5 days where I am for a commitment to come back, assuming it is clean, I do the following three things:

Take the original contract, cut a tiny strip of paper and scotch tape it over the price and make a copy. Now I have the contract that my new buyer will have "attached" to them through assignment but without a lower price than they are paying. Anyone who says it is okay to let the other side know what you are making has not dealt with dozens of assignments for large chunks. You do enough where you make 20-25k per assignment and you will get the investor who can make things messy. May or may not blow up your deal but it's much easier if...

Meet the investor with a clear title, a copy of the contract the investor that is being assigned (you can even meet at title so they can confirm that it is the contract), and an assignment form. My form ONLY has their total price, is 1 page, and is one that a former President of a large title company helped me create years ago. The assignment form has worked everywhere.

Have the deal in my LLC. Investors will buck and pout because they really want the money to go to title where it won't be as easy for you to access it if they cancel- they will try to get it back. Large title companies will "accidentally" release to someone who is a legitimate player when they know the broke wholesaler is not. So now, if I meet up with the potential buyer, I have the assignment form, the contract, and they have to make out the $5000 non-refundable earnest money to my LLC if they want the deal. I tell them, "this is how it works if you are a builder, we aren't agents representing homeowner clients, so if you want to take my place on this contract and have the right to purchase, the check needs to be made to my LLC.

Good luck

@Jerry Thompson

Finding a good deal is really what matters. It's tough to tell how good of a deal this would be. I don't know Dallas well but would agree with others comments that you are potentially buying in what is probably an area most do not find desirable. I would highly recommend making sure your numbers are accurate. If you are wanting to landlord, you need to get houses where people need to live near good schools, universities, etc.. Flipping is wherever you can liquidate, right now that is anywhere in Waco under 150k.  Where you are I have to assume you are describing a not so hot area or a dump because Dallas is I think like Austin- where 250k houses are scarce. 

If this is off market, I can totally see you picking up a house for 80k that rents for $1250 or will sell as is for 125k. I just did that last week. But I live in Waco and it is Midway ISD, the school district here where every kid gets an ipad. So while it is technically a 2/2 (with a cute 3rd bedroom that was permitted but is kind of a patio so I am using 2/2's for comps) @ 1316 sq ft it is as nice as the comp that sold last Thursday that is a 2/2 1195 sq ft for $124,700- IF I do zero repairs

So if your rent is accurate, you should know about your deal what I know about my deal that- that it's a killer freaking deal! Families can't get into this school district and trip all over themselves for affordable housing. I'll probably get 135k cash to an investor off the MLS! Do you feel yourself as excited as I sound? Then you need money for repairs because again, no way you don't have a slam dunk if you could buy it and get it to $1200 in rents.

If the place needs repairs, I'm not sure how you make it happen. If it needs no repairs why not list that sucker for 125k after you buy it? Then do a couple more. Have you looked at why it might be available? For how long? Does it back up to a busy street? Across from a school? Garage conversion? Sit at that "T" thing where the stop sign is in front of your house? Have the ugly facade in the neighborhood that none of the buyers or tenants want and you're using comps with the premium cut stone builder upgrade? I just realized most of these don't apply to what is likely a sugar shack but I just started hammering away on this contraption. Good luck either way, your attention to details shows why you are in a position to make investment decisions. 

@Jody Schnurrenberger

Thanks! It's fun, I'm sure I'll be active (new shiny toy) on here for a while then fade out and back in. Right now, as a new visitor I'm really enjoying hearing everyone share their experiences, thanks for sharing yours. 

And yes, a burner phone. They are a beautiful, magical, and sanity saving creation.

@Caleb Rigby

I would say the number one tip for the discounts is to make your list ahead of time, print it out and pull it out of the back pocket when it is time to show them what you are specifically talking about- "If I get the items to you like this, would this work for you?" When they see the detailed way you will bring your orders they get pumped to work with you because a lot of people really don't make it easy for them. I think we make money for sure by making vendors lives easier to work with us! 

It's funny- the more work a house requires the less we want to pay. The more work we require out of suppliers, the less likely they are to discount. I guess we all want to maximize our bucks! Congrats again on such a solid start-

@Jody Schnurrenberger

Glad to have helped get you re-energized. Success, business, relationships, you name it- I'm a big believer all get built on energy and excitement. As energy and excitement wane, so does the strength and growth of the construct (whatever the form be it physical, mental, or emotional). Now that you are back to propelling forward with optimism, might I offer a few suggestions? 

Build from the paint job out, i.e, look for a handyman type that can paint plus do some light non licensed fixture replacement, door replacement, blinds, etc. To get the best prices, craigslist can be a good tool. But not how most use it. 

Picking up a burner phone (the calls will come like you wouldn't believe for weeks :) and placing an ad for "Handyman needed for several make readies" helps find the people in the area that are looking. With a little common sense and a few hours on the phone, many can be weeded out. There is always someone good who just moved to your area or wants to just fill a Wed-Fri for their 4th crew on the 2 week of next month. Once you have your gal or guy or whomever  you can take your time getting bids on the big ticket items. Some very reputable vendors may be the ones to answer your ads. 

Roofs, foundations, A/C, Plumbing, Electrical, etc. are all big ticket items and the more bids the better. Since you already own the home you are in a great spot. I've also met MANY top notch ready to go GC's and licensed you-name-its by doing the ads. The key is the burner phone, I don't recommend the google number approach for this. It only costs $50 with minutes at Wal Mart and then you have tons of people calling YOU. Just put it on vibrate and slide it under the bed when you have talked to all of the ones you need and for them it works like a normal phone. 

Excited for you!

@Khalil Gio

Should have just pulled these other links for you, again, Waco store but prices are the same in Austin so hopefully the same for you where you are. Here is the microwave with vent hood for $199 before any additional discount 

https://www.lowes.com/pd/Frigidaire-1-6-cu-ft-Over...

Dishwasher

$249 before discount

https://www.biggerpockets.com/forums/67/topics/502...

That's $850 total. Frigidaire is a great product for the price in my 100-200k first time buyer range. So whether or not a 5 burner is much better, or there is more black trim on the top of the dishwasher than I'd like, it's still a stainless package, looks great, and makes it easy for me to know going in that I'm going to put my stainless package in no matter what. Of course you'll get stuck with the slide in on some houses but Lowe's tends to run these and cabinets specials at least once a month for about two weeks. Basically half the time these are the prices. 

@Khalil Gio

https://www.lowes.com/pd/Frigidaire-Freestanding-5...

Thank you. This link shows $399 here in Waco at the only Lowes :). They run these specials often, and then I'll get the max discount, 5-15% from this discounted price. So I end up in the low 220's to 230's for a dishwasher and the high 180's for a microwave w/vent hood. Hope this helps

Yes, take the taxes and insurance costs (I do this with excel) for expected hold time in your area and use 6% of resale to figure out a very rough net before cost of financing. The 6% is of resale to cover - 3% to buyer's agent, and another 3% in closing fees to BOTH the buy and sell side costs. Listing houses with agents can be pretty expensive long term but if you are going that route then I'd use 9% plus taxes and insurance. I never factor in financing. If the deal meets the criteria- a lot of people use 70%, then I recommend securing the ability to purchase before shopping for capital. 

Way to go Caleb. Take it from someone who will flip 25+ houses at an average of 30k net-net per house, you have to learn and pay for the learning one way or another. If you are profitable and make a living doing something that is what matters most. I spent a few years working with some top investors- the number 1 auction buyer in and around Austin and then the number one motivated seller buyer (think large national company) for Austin. During this time I made a fraction of what my bosses did, even on the deals I figured out better than they did. But that is okay, they were both masters at what they did, truly masters- so I traded making more money doing less deals for myself in order to learn. I paid for my education this way. 

One way or another we all pay for education. Truly, way to go on making it happen. Going forward, keep focused on price levels. It is more important to try and buy homes in the lower price ranges in areas that will move than it is to get the big home runs. Pricing pressure is from the bottom and these will be your safest deals. 

Few tips- negotiate directly with Lowe's or Home Depot. Make an Excel sheet and shop the store online in your area. Go meet the head of the pro desk and show him a sample spreadsheet and ask if he wouldn't mind working with you to pull your orders (they of course say yes). I either get free delivery or pay $20 delivery. I get Behr that is on the shelf for $22 delivered direct from Behr factory for $10.92, cabinets at Lowe's for as much as 24.4% off, my appliance package is Frigidaire stainless and is a 4 burner gas or electric freestanding range, a microwave with vent, and a dishwasher. It was $808 but it the other day I noticed it was $811 before taxes. From one of the big box stores I use a flooring product that costs me a total of $2.40 labor and materials installed. I don't even want to give more details on the flooring because it is truly amazing how much people love the look of it, I can put it in 125k or 400k houses and it still works. It's a trade secret!

Last tip is to learn the cabinet placement and other details as much as humanly possible. Measure your own blinds, count up your privacy/passage, your knobs/pulls for cabinets, toilets, main ceiling (is it a flush or a drop down? you want to know these things- high ceiling it's a drop, regular type ceiling it is flush or small drop), some sort of pendant light for the breakfast area, flat flush mount light for the kitchen area (not the over the sink light), new 6 panel doors unless you are going retro in which case it is usually better to stay flat doors, etc... I could go on and on but you get the idea. YOU ARE THE SMART ONE. You figured out the deal, financing, acquired enough education to even do A DEAL. So- try and turn over as little as you can to people who might just not be as smart or as talented as you. Maybe they are but why risk it? Try and spell things out for vendors and make their life very "plug and play" when handling your orders. I talk a bit more about this here, hope this helps https://www.youtube.com/watch?v=A_uP8F8eBKY&feature=youtu.be

I've closed about 10 with auction.com over the past 12 months. For me it is easier to just use their title company, I've never had them try to make me close on one with exceptions or had one not come with a clear title. I have one now where I happened to use my title company and they haven't been able to clear the title for 4 months. I had one that was a 90 day process last fall using auction .com's title company. Not sure that helps. But yes, wire the money the way they say if you want it.