All Forum Posts by: Justin S.

Jeff-

I'm a beginner (started serious about 9 months ago), but I would get a mentor from the start. I only started working with one for the last 3 or 4 weeks but learned more in that time than the previous 8 months. Learn from them and their mistakes before you make them.

Also, I found if a guru has a class and a book. Buy the book, skip the class. Some may disagree with that...

Jeff

You probably need to show them:

1. Exit strategy - When and how are they getting thier money back.
2. Interest rate you plan to give them.
3. Mitigation plan - What happens if you get hit by a beer truck? How will they get thier money back.
4. Deed of Trust and Promissory Note. This will secure it but does not guarentee a payback if item 3 happens.
5. Loan to value - Showing that if it goes to foreclosure, there is enough spread that they get paid as the 2nd or 3rd lien.
6. Some may ask for a proforma or financial analysis showing you've thought this through.

Not many will lend if they are not in first position.

Or ask a family member or friend to lend you the money. Thats always easier, but they may eventually dislike you. ;)

Randal-

I use a virtual assistant to answer my calls during the day, and I call them back that evening. I just forward my business cell to her cell number. She goes through the questionnaire I provided her and scans them to me every night. Most service providers all you to pick up an additional line for $10 (the business line). You can probably even find a virtual assistant that will let you use thier number. I tried the voicemail route but having someone there to answer is much better. Do a websearch for area and you'll find someone with a fair price.

I validate Nick's post. I was on the phone call with Nick this morning (he's mentoring me) and he did ask him "are trying to sell negative cash flow negative equity properties?" The gentleman on the other end said "yes". Nick replied, "I'm not interested in buying negative cash flow properties." They exchanged pleasentries and "click".

Yes, but you most likely need to submit a lot of offers to get the price you need. Concentrate on properties that have been on the market for a long time. A lot of offers is in the 30-100 range. Not 5-10 range.

Do you have money to buy REO's? You will generally need 20-25% plus repair and holding costs. If you do not have a lot of capital, you may want to concentrate on shortsales or Subject To deals.

I appreciate all the input. Thanks everyone. I'll let you know how my first flip turns out.

I have a shortsale deal in Arizona but one of the homeowners is in Canada. Does a Canadian Notary work in the US or is there something special I need to do? I believe the homeowner is a US citizen he just lost his job and moved to Canada. His wife is still here with the kids until they move up to Canada. Thanks for the help.

If you are using the MLS, concentrate on properties that have been sitting on the MLS for a long time. In my area thats 180 days, but may be different in your area. I've submitted about 20 offers in the last week and only one took. But that is all it takes.

Also, you shouldn't think of this as easy. Think of it as simple. You submit offers, negotiate, buy, and sell. If done right, you make money.

True, but if I find an FHA buyer, I can put them in the house now and have them pay rent till they close. That will cover holding costs. Make them put down a large escrow or option money so they won't walk. Right?

I'm doing my first flip in the next month and have a couple of marketing questions for you veterans out there.

It is an REO that I got a good deal on. I close on the property in early April with hardmoney/private money. I should be signing the contract by the end of this week. Next week is the inspection period (7 days). Repairs will take about 2 weeks. Just needs paint, carpet, tile.

When and how are you marketing your property? I plan to initially put it at 10% below market value.

Are you using an agent, flat fee MLS, Craigslist, all the above? Any I miss?

When do start marketing? now, when I sign the contract, after closing, after repairs?

Is staging working for anyone?

Thanks for the help. :D