All Forum Posts by: Tonya Sanders

Hello. My wife and I are just starting out in real estate, and we're in a pickle with our first property. We found someone who is willing to buy if we owner finance, but we're hesitant. If all comes back well with background/credit checks, and if we could set favorable terms, is there any real risk with owner financing that we cannot see?  (this is in oklahoma) For instance, is there a type of bankruptcy that the buyer could file in which he would get the house?  If he defaulted on the loan, and we got the house back, that would be fine. It would be a headache of course, but we'll ask for a sizeable down payment and interest rate to protect our time. I'm less interested in those scenarios.  Mostly we just want to assure that there's no way we can lose the house or a portion of the house for any reason until the buyer pays us in full. 

Thank you! 

Andy

thanks for the additional input! We are still working on closing the deal on the property first, but that should hopefully be finalized tomorrow. 

Jack - I am interested in this arrangement you have. Do you basically loan the money from your investor and thus the property is in your name?

For our situation, we actually think that instead of fixing and then flipping the property, we are going to try just putting it right back on the market and selling it as is. Because we are getting such an incredible deal on the property, we think we could sell it for about $75k more than what we bought it for and the next owner/investor will still have the potential of making a 6 figure profit if they sell it or gain 6 figures in equity if they keep it and update it. Win-win.

In this instance, we are still deciding how much to compensate this couple. The wife will get both commissions for the sales, and really, all of the work that they have done so far falls under the umbrella of what a realtor would do. They found the property, and potentially have already found us a buyer. However, if the buyer they found for us works out, perhaps we will give them a bonus of sorts for finding them so quickly? That is where we currently are in this situation though. 

I will post an update once we finalize things. Thanks again for the helpful input! 

Thanks so much for the replies! In this case, we would be the one also footing the bill for the remodel costs. So they would have NO financial risk at all invested in the project. They did find the deal though... but it was simply a house in foreclosure that came up on the MLS. Any realtor would have been able to send it our way.

My husband and I live in California currently but are planning to move to Tulsa, OK over the next year. Given the allure of the cheaper housing in Tulsa we started looking for a property that we could flip. Living in California, that obviously presents a bit of a challenge. In the process of networking and looking at possible property deals, we connected with a husband and wife who live in Tulsa and often flip properties. She is a Realtor, and he is a contractor. We discussed the possibility of working together to flip a house remotely. We would provide the capital to buy a property and renovate the property. They would help us find a good property, evaluate it's potential, oversee the renovation, and find a buyer for the property.  The question I have for the community relates to how much you feel is fair to compensate this couple.   My husband and I feel like in essence, they are acting within their professions of realtor & contractor and that their compensation should simply be the commission from the purchase and sale of the property, and the contractor fee for managing the renovation. This couple has suggested that they receive that compensation, AND a percentage of the profits from the sale. Given that we are carrying ALL of the financial risk, I am having a hard time seeing why this would be reasonable or fair. We have never done a flip before and have obviously not worked in partnership with anyone to do one. I'd love to get the thoughts of anyone with some experience in working with partners for flips. How have you structured your deals? How is the risk generally distributed? And do you think a percentage of the profits is a fair ask by this couple. We are under contract on a property that feels like is a great deal, so we have started talking this out with the couple to see if we can come up with an agreement. Thanks for any insights you can send our way.

My husband and I live in California currently but are planning to move to Tulsa, OK over the next year. Given the allure of the cheaper housing in Tulsa we started looking for a property that we could flip. Living in California, that obviously presents a bit of a challenge. In the process of networking and looking at possibly property deals, we connected with a husband and wife who live in Tulsa and often flip properties. She is a Realtor, and he is a contractor. We discussed the possibility of working together to flip a house remotely. We would provide the capital to buy a property and renovate the property. They would help us find a good property, evaluate it's potential, oversee the renovation, and find a buyer for the property. 

The question I have for the community relates to how much you feel is fair to compensate this couple.  

My husband and I feel like in essence, they are acting within their professions of realtor & contractor and that their compensation should simply be the commission from the purchase and sale of the property, and the contractor fee for managing the renovation. This couple has suggested that they receive that compensation, AND a percentage of the profits from the sale. Given that we are carrying ALL of the financial risk, I am having a hard time seeing why this would be reasonable or fair. We have never done a flip before and have obviously not worked in partnership with anyone to do one. I'd love to get the thoughts of anyone with some experience in working with partners for flips. How have you structured your deals? How is the risk generally distributed? And do you think a percentage of the profits is a fair ask by this couple.

We are under contract on a property that feels like is a great deal, so we have started talking this out with the couple to see if we can come up with an agreement. Thanks for any insights you can send our way.