All Forum Posts by: Tim Shin

 Hey Chris, thanks. I contributed a bit to that discussion as I'm a geologist by day in Houston. I noticed that people were saying NW neighborhoods. I'm going to invite that person to comment on our discussion here!

 Hahahaha. I got a good laugh from that. I'm glad we had this discussion because this was not really something I thought about before. Lindsey, given that your deductible is somewhere between $2100-3100... would you still try to take off this $800/yr if you could? I mean that erodes part of that $5600 for 5 months of rent. Leaving you with $2500 in case of catastrophic unihabitability. Given your reserve structure, would you use insurance to fix the house in the case of catastrophe and pay the deductible? Or do it yourself?

Happy Valentine's  Day y'all. 

Hey Cal! Going well so far but really looking to diversify income streams with rental properties asap! My wife has jumped in to the partnership with both feet now so we're ramping up our goals for 2016. 10X'ing it @Grant Cardone style. 

@Simon Shih 

What do you expect rent to be for that house? Deer Park is really far for me but I may be interested in partnering also. Congrats on a great workflow!

 Happy Valentine's Day! Wholesaling is hard so I wouldn't recommend quitting your job to do it. So figure out if you can afford to not take a job. It took me months to get my first deal. 

1. Figure out your hourly rate at work and replicate that for your minimum wholesale deal per month. 

2. Don't give up. Keep calling them every 2 weeks.

3. Write/type your script and build it with blanks for the house details I told you so when you get called you have it there. Carry it with you

4. You can get a virtual answering service that will take some details down and email you the contact info. This will give you some time to think, look up the property, and make you seem more legitimate and fronted by non accented people. Then accent boss calls the lead back. 

5. PM me if you want more specific help

 This house is zoned to 5 elementary schools? That seems odd. Which is the one is actually zoned to? 

 Hey Simon good luck and congratulations! What kind of repairs are needed? 3/2? Is it zoned to Deer Park school district? How'd you find it?

What's the elementary school?

I haven't done of these but theoretically this  how:

You can represent yourself in the transaction with a purchase and sale agreement or you can use an agent. If you represent yourself, nothing changes on your offer side besides that you need to inform the seller or make sure the seller's agent informs them that they are taking their commission from your offer. You can suggest to the seller's agent that they only take 3% (out of the normal 6%) from the buyer or you can say that you are representing yourself so they get the full 6%. This might sway the seller's agent to push the seller to your price. (Don't try to get me on this one @Jay Hinrichs, like I said I've never done this and it's not really my job to suggest whether or not this is ethical of a real estate agent). Also doesn't change a whole lot if you are using a buyer's agent if you're not going to list your deal on the MLS. If you list your deal on the MLS with another seller's agent you need to adjust the formula. If you're using a generic formula like this:

ARV*.7 - REPAIR COSTS - GROSS INVESTOR PROFITS (can range between 15%-35% of ARV depending on how risky the flip is, lower % for higher end flips in a hot market) - WHOLESALE FEE = MAXIMUM ALLOWABLE OFFER (MAO)

You then would advertise the property (non-MLS) for MAO + WHOLESALE FEE = asking price to your investor.

When selling on MLS you then also have to add in your agency fee of 6% of your your asking price so then you have to adjust the MAO accordingly to maintain your wholesale fee.

You may also have to show certification of funds which requires you to use transactional lending. They can give you a certificate of funds for any amount but charge you a percentage for you to use at closing which can be like 1.25% of actual sold price. 

Depending on the laws in your state, you may be required to do a double close. See @Sharon Vornholt's article: https://www.biggerpockets.com/renewsblog/2012/12/1... and https://www.biggerpockets.com/renewsblog/2012/12/1...

There's a little more risk if you're required to do a double closing with transactional funding because you may be stuck with the property if the buyer backs out.

 Lindsey, what is the deductible for this insurance? That will help us settle a lot of this. Thing is, I still don't see how it's worth saving that $800/yr which translates into 2.5 months of rent after 4 years of saving this small $800/yr. That indicates your rent is $1280/mo. If tomorrow the neighbor next door to your rental burns their house down, a tree falls on it, there's a major flood like @Brandon Turner experienced that only happens once in 100 years you would be better off having spent this $800 to cover 5 months of rent which is equivalent to $6400. You would then still have achieved $5600 in rent over that 5 months which will also cover your taxes... freeing you to use that $5600 to invest in more properties/your business when it would have taken you a lot longer to put that $800 to work. It would take you 8 years of saving that $800/mo to make up for that lost rent for that 5 months. In other words, you would have egg on your face for spending that money $800/yr if nothing at all ever happens in 8 years to a SINGLE one of your properties when this insurance plan covers multiple ones. Also, $5600 this year should you incur uninhabitability (let's hope you don't) is a lot more powerful to invest than $800 wouldn't you say?

 Yes, Sarah, I do mean she. :-) Originally Lindsey didn't have a photo when she started this post! My mistake.