All Forum Posts by: Willie R.

Foreclosures are great but require lots of research and a little more risk than MLS. The reason is your not allowed to see the inside. ( although if the house was previously on the market you can check the MLS). You also have to ensure that the title is clear and there's no judgments on the property. You also have to understand which judgments follow the owner and which follow judgments stay with the property. is not for everyone and it's definitely not for the faint hearted. I enjoy it because requires creative strategy along with Creative financing. You can most definitely make money

I found about a possible deal through a real estate agent at an open house. I went to look at the property today. Its a 4/2.5 and its already a rental property. They are asking 125K for it prior to listing it, but believe that they can put it on the market for 139K. Rents in the area are about $1,500 per month but the current rent is $1,200 and the renter is being evicted. The agent told me that most deals of this type can be handled without a lawyer by using the title company. What are the risks of not using a lawyer and relying on title insurance for protection for a deal of this type?

@Willie R.

I agree with @Debbie Thomas that title companies in Texas utilize Texas lawyers. You might want to call a local title company and discuss their services and your concerns.

Are you working with a RE brokerage? That is, have you signed a buyer's representation agreement? If so, your agent has a fiduciary responsibility to help you through this process.

If you utilize a real estate agent they will suggest using TREC contract form 20-12 "One to Four Family Residential Contract (Resale)" which contains an option period. If you and the seller agree to the option period contract then you have a period of time to re-evaluate the deal. During this time you can have the home inspected by a licensed inspector (for a fee) and also get contractors to bid on the work (typically free). You can also have your agent do a comparative market analysis for the area around the subject property and also pull lease information from the MLS.

Have you used the Rental Properties Calculator here on Bigger Pockets to determine if this is a good deal?

What area is your deal in? From what I see in DFW hitting the 2% rule on SFH's is not so easy anymore. If I am wrong about that and someone has one I would love to buy it! Here are the numbers I am seeing though on a monthly basis

Income $1400

Debt service (assuming $0 down) $618

Taxes $250

Vacancy  $117 

Lawn care $50

Misc $84 (I am not sure what misc is referring to but ill leave it on there for you.)

Cap X $114

Management $114

Maintenance $114

insurance $114

Monthly GOI = $1400

Monthly expenses= $1689

Monthly cash flow= $(289)

Feel free to adjust these numbers and repost if I missed something or was higher or lower than what you believe it would be for this particular property. 

Most title companies in Texas are associated with a real estate attorney. I would feel comfortable that they have built in protection and will consult the attorney with any questions. 

how are you going to pay for the house @Willie R.

What are you planning to do with house

Give us the numbers such as maintain. Taxes,insurance,vacancy 

We will tell you if we think it is a deal