All Forum Posts by: William MacBride

There's a house downtown selling for 20k. My gf's already in contact with a buyer who's agreed to buy it for 30 k cash. Also the seller has ok'd that. She has signed an agreement with the seller called a "flex option" agreement, allowing her to market it.

She's gonna assign it over to the buyer. but I keep asking the exact steps to this and I never seem to get a straight answer simple as it is. She signs the agreement with the seller. Puts the "and or assigns" verbiage where she signs.

the buyer does what, pays her the whole 30 grand and she pays him the 20? The purchase agreement is worded as an "option to buy within 30 days at such and such a price" and then "provisions" says that "seller understands that buyer's intention is to find an end buyer and assign this option to the buyer for a fee paid by end buyer."

are two additional contracts then signed once she finds a buyer (standard sales agreements) between both the investor and seller (for 20 grand) and then the investor and end buyer (for 30 grand)? I thought the whole point was to eliminate the clumsiness, just have the end buyer dealing with the seller.

can somebody just simply state how many contracts are signed in this simple deal and describe what they are?

does the end buyer write two checks or one?

I realize there can be a "line item" on just one contract (between the seller and end buyer) that states the fee that the investor is getting, but I don't know exactly where that goes on the contract, what the total sale price would be written on the contract (would it be before or after that fee? I assume after) and a few little things like that.

I UNDERSTAND THE PRINCIPLE AND GIST OF THIS I JUST NEED TO HAVE THE DETAILS REVIEWED AND WHERE TO SIGN AND THINGS, THATS ALL.

If someone could just run through that I'd really appreciate it. If there are several possible ways to do it paper work/agreement wise, could you just quickly list a couple of them too?

Thanks a lot,
Will

Good advice. I do handyman work myself but I don't necessarily know all the specifics of local building code down to the last detail, etc. You think I need to know all that or just know generally what work it needs?

Hi I'm just wondering if you should get a house inspected always BEFORE you make an offer to the seller. Just today I talked to a guy who's selling his house FSBO and I asked him if he gotten the house inspected. He didn't seem to know what I was talking about. I wasn't so sure myself if I should do that before I make the offer, or if he should already have, or what. I assume you get a building inspector in there for the 300 dollars, and either the seller or the buyer pays for it, then you make the offer. Is that pretty much how it works?

Will

I second that. Can somebody just run down exactly the steps in getting a house under contract and then assigning it over to another buyer?
I understand the process fairly well generally Peter but I'm new to this too. you basically just sign a sales agreement with the buyer and after your signtaure you write "or assigns." this allows you to "assign" the property to another buyer. There is something like a "line item" or "addendum" on the contract in which you specify a higher price that the assignee (end buyer) will pay. So only one contract gets signed but you get the difference between the seller's price and the amount specified for the assignee.
A real estate agent I know is emailing me a blank copy of your standard "sales agreement" form. it's my understanding that its fairly flexible though at this stage and pretty much any arrangement you work out with the buyer is o.k. as long as both of you agree to it. Getting it "under contact" just means getting an agreement that both of you sign so nobody else can bypass you and buyt he property while you're working on the deal.
Expand and clarify, oh real estate expert gods.

Will

gotcha. thanks

I'm trying to get this process as clear as I can. I have now looked at a bunch of houses. Some are more or less at market value but could maybe be talked down. Some are cosmetic type fixer uppers and some are true fixer uppers.
First off: Do I need to get the houses "under contract" (i.e. make an offer, sign agreement all that) in order to try to find buyers for them? Or can I take all the house's information and just start posting them and advertising them as long as the seller says its ok?
Secondly: I do handyman/renovation/remodelling work myself. I thought of possibly offering to fix up the houses for a reasonable price while looking for buyers for it. But then again I wouldn't be able to interest other rehabbers in it if it was already fixed up. Then again I could begin fixing it up, paid by the seller to do so, and try to interest rehabbers in it so that they would have less work to do and could realize further profits. Any thoughts on these ideas?
third: Should I start getting all sorts of ads out that say: Cheap House deals!!!!!!!! and so on if I only have a few houses, just to get buyers calling up? Especially, should I do this if they're not even under contract yet?
fourth: is there any way to make money on houses right around market value? I mean real estate agents market houses at market value and make a commission, why not an investor? I guess its just a question of if you can find a buyer at your price, right?

Will

I've been doing exactly that, driving around. I've found some things and I'm following up on them.
If I'm getting them off the mls, how would I go about that, just tell a realtor what Im looking for? I have a couple of realtors I can call. it seems they wouldnt want to do that much work unless a commission was involved and thats already an added cost. Is there any way that an ordinary individual can get access to exhaustive mls listings for a certain area?

Will

happy halloween and happy deal hunting (or haunting). Sorry I just had to make a stupid halloween joke. black and orange supermarket party decorations and cake icing, etc...

The following scenario is beginning to play out:
I contacted a few rehabber guys from the newspaper who had ads like: we buy houses any condition cash! 2 of em were there and seemed like nice guys and open to deal making.
I was driving along and saw an FSBO sign, called it and got a guy who's also an investor/wholesaler but, in contrast to the other 2 guys, deals in more high end stuff and in higher volume. claims he deals with 60 houses at a time sometimes. I asked if he had any fixer uppers. He said yeah and gave me addresses of 2.
I went and looked at them and they seem great - decent houses in nice neighborhoods, easily as big and in same style as others near it, need rehab but not so much that they're real wrecks. Took a look at all the numbers (got comps, had a real estate agent send me little reports on them, all that) and they don't check out. Not enough room. Except of course for the big investor dude seller who makes 40 to 50 grand either way. One house he wants 155k for and probably paid say 110k. Assessed at 192k, so fixed and put on the market he gets maybe 195 to 200. Rehab costs on both he estimated 30 to 40 k.
So if he sells it to me or one of my rehabber contacts for the 155k, 45 k for him (well ok maybe some holding and closing costs subtracted out of that). If he fixes it up himself, 55 k (110k + 30k rehab=140k and he's selling it for say 195).
So he's got not much to lose and not much motivation for coming down in asking price.
And as far as I'm concerned, there's not much room for me to get a modest bird dog fee or even offer my rehabber buddies a reasonable deal.
I was just wondering, from a strategic point of view if anyone had any ideas on how to turn this into a better situation for all concerned (especially me and the small rehabbers!). The seller investor does have a lot of properties and seems in certain ways open to deals, seems to mainly just want to move the properties. these fix ups are classic good deals if I was to get them at the right price.

Will

p.s. I'm also wondering in a general way how to get these smaller rehabbers to want to do business with me. Any ideas on how to find fix ups that others might have missed? Other types of deals and advantages I might offer them? Also how to get them to pay me the finder fee up front rather than after they resell? Any thoughts appreciated I'm new to this.

yeah I looked at it. Not a great neighborhood, definitely he scent of drug activity. I'd like to know more about this 50% rule.

Will

So in the event of a foreclosure the lender gets the title to the property?