All Forum Posts by: George Ramsay

Figure ill throw this out there and see what everyone thinks, and if im missing anything
This is an owner financing deal with 500$ monthly payments. I was going to fund the rehab out of pocket, since the banks are just stupid and worthless.

ARV=170,000

INITIAL OFFER TO ESTATE 10,000
-Includes sales commission, closing costs and 2,000 for each heir
REHAB= 60,000

So total cost to me to rehab and acquire property is 70,000

Once property sells for 170,000

30,000 to the estate (10K per heir)
40,000 to pay off remaining mortgage
100,000 to me to pay off my 70,000 investment +
30,000 Profit minus listing commission

I feel like im missing someting since a lot of investors use huge worksheets and mathematical formulas to figure stuff like this out. Then i talk to other older investors who just keep it real simple like this

Good thread for newbies like myself.
Ive been getting outbid, or no response from REO offers this month and ws questioning if i needed to adjust my thinking.
I try to look at propeties in the 150K range.
For Flips id like to make 20K.
And for Buy and hold properties i try to get abotu 250+ cash flow per month.
This was based on conversations i had in some networking groups when i first started getting into this, but like i said wasnt sure if that was still applicable in this market.

Me and my buyers agent are having a bit of a disagreement, and i would appreciate some feedback
As a general precaution ive always put in the special stipulations
"subject to partner's approval"
She feels that this weakens our offer & perfers to add a financing contigency sheet, with financing terms that are all but impossible to get.
I think this adds more unnecessary complexity to the offer, to acheive the same purpose

thoughts?

Mitsu brings up good points, an interview might educate me a bit.
However i like to think that ive failed at enough short sales, and have analyzed and had others look at my presentations, that i now present very professional offers. Hence why i partnered with a very experienced buyers agent. Thus i see no need for me to reduce my price by 1% to accommodate this.

If i had a dollar for ever REI who told me i needed their services to do deals id be retired...Show me your going to bring some skills to the table and id consider it.

Good conversation, im very much enjoying everyone's response.

Thanks SeeMO,
Now i understand!!

We had told the selling agent that we were going to reduce our offer based on the dollar amount of the 1% fee. Thats when they said the bank would pay it and move it over to them on the HUD statement at closing.

also appreciate the comments regarding closing. I know legally im not liable, but from a business perspective knowingly participating in a suspect deal isnt the way i want to run my business.

Hence the point of my post.

As always grateful for the feedback

eh, i was a bit irritable last night when i checked out this 3rd party.

Although i'm grateful for all the responses, this doesn't sooth my concern that a 3rd party is getting cash at closing. But perhaps thats just the way it goes in theese economic times

Seemo i replied to you PM, would appreciate your feedback

hey guys thanks for the reply
Im becoming more concerned regarding this deal and am on the verge of walking away, due to this issue.

The listing agent provided this link for the company
http://www.bgs3.com

At the end of the day the links are dead, the youtube video is" no longer available"
And i have no idea what service this company provides, or even how they will be paid at closing....

Ive been working on a possible short sale and received the following from the listing agent

--------------------------------------------------------------------------------------------
**** and I work with a 3rd party company that negotiates
all our short sales...They have the relationships with the lenders and are able to make the process of getting each deal to closing that much smoother...Should you make an offer, please keep in mind there is a 1% buyers fee. The VALUE to you and your client is less headache and time on working this deal out with the lender. Not to be presumtuous, but you
would want to make an offer that considers this cost.
--------------------------------------------------------------------------------------------

I called BS and that fee has been now negotiated to the seller on the HUD statement

However any 3rd party that receives money at closing raises red flags that there is some sort of mortgage fraud involved. So im looking every where i can find for second thoughts and on this, and would appreciate any feedback.

What are the chances of raising the rent on the duplex tenets and making it a cashflowing property?

Are there Repairs or improvements that would be worth making?

Also have you analyzed the negative cashflow as a tax consideration?

is there additional land on the property that could be utilized?

many other variables that could be considered here

But as the other posters have said buying a negative cashflowing proeprty usually isnt a good deal

Thanks guys appreciate your insight

I was given the advice that an appraisal isnt worth the paper its printed on....

Ive comped the neighboorhood based on websites like Zillow/cyberhomes/ etc....

All it does is raise more red flags....220K home next to 7 120K homes. ???Built within a few years apart??? hmmmm......

I guess that speaks for itself

But I was just wondering if there was any more specific info then that.

Like a website that listed hard hit zipcodes ripe with fraud..