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Author Topic: DEAL?  (Read 16482 times)

Offline Tony Chicago

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Re:DEAL?
« Reply #15 on: August 29, 2006, 09:35:31 pm »
Is there a full moon tonight?

How are the wholesale deals coming?  Write it up!!!!!!!!!!

Offline younginvestor

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Re:DEAL?
« Reply #16 on: August 29, 2006, 09:48:34 pm »
I have a friend of mine, bird dogging for me for more wholesale deals near Michigan area, since thats the furthest Im willing to travel from Toronto for now, until I have a few deals under my belt.  I dont have anything just as of yet, but am pleased to see so many investors interested in the area, which re-assures me that when I find something, someone will be there.

Unlike Toronto today, (This is lengthy, read only if you have nothing else to do right now):
my so called first deal fell apart, I had a contract signed to purchase a home for 346k, appraised at 380k. It was a 5,3 3000sq ft. And I was going to put a 4th bathroom in it upstairs (there was more than enough room) and thus, create 2 ensuites instead of 1. The basement was insulated, and I was just going to sheetrock it, paint it, and install a 5th bathroom in the basement. It had a seperate entrance already. ARV was supported at 440k by comps. All renovations was 20k.
I signed the contract on Friday, conditional to financing. I had an investor bugging me constantley about the deal, so I told him about it and he was like "yea yea, Im up for it" Yesterday I finally started pestering him about the deposit cheque to secure the deal, and he says he wont give a deposit (which is fully refundable, cause we can get out of the deal) until he inspects the home once more. I asked if we could set up an appointment for today in the morning, and his answer was he'll get back to me. Finally when I get my agent to call him up, he says he doesnt know me! and sends me an email to forget about the deal because his partner is tied up with a deal of his own. Why do people do this? If the ass didn't know what he was doing, he shouldnt have wasted my time, now the owners pissed (like I care) but my agent, who Im pretty good friends with isn't to happy. Even though she wont say, I made her look bad, dragging this thing on. So as you can see Toronto, Canada has these types of investors. Such deals are hard to find, and when you do find them, I get complete assjack to deal with.   :doh:
« Last Edit: August 29, 2006, 09:50:02 pm by younginvestor »

Offline Tony Chicago

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Re:DEAL?
« Reply #17 on: August 29, 2006, 09:58:54 pm »
I know your anger.  I presented this deal to a guy for rehabbing that my realtor gave to me.  He told me he wasn't interested in the property and that he might have trouble getting the financing on it.  I was going to assign it to him.

Yesterday, my realtor gets an email from this guy thanking him for finding the property for him and he closed it 2 days ago.  He waited for my contract to expire, called his realtor friend and they did the deal themselves.  He told my realtor he couldn't find his contact information....oh sorry couldn't find it until after he closed the deal.

We were both...well you know.  We cut him off from future deals.  

Offline younginvestor

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Re:DEAL?
« Reply #18 on: August 29, 2006, 10:09:16 pm »
Ouch, well I didn't get burned that bad....yet....maybe I should check back on that house tommorow, lol.... *starts worrying*.....
Anyway, don't you use a Non Circumvention Agreement with investors, so they do not cut you out of the deal, on that particular property? All this document does is protect  the assignor, so that the assignee (if thats a word) does not cut you out of the deal the next day. They have no reason not to sign this, it no way binds them to anything, such as purchasing the property. It just binds them to dealing with you for that property.
« Last Edit: August 29, 2006, 10:10:34 pm by younginvestor »

Offline Tony Chicago

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Re:DEAL?
« Reply #19 on: August 29, 2006, 10:17:03 pm »
I should use that next time.  My realtor was ready to punch a hole in the wall.

Offline ItsMarcoz

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Re:DEAL?
« Reply #20 on: August 30, 2006, 09:26:02 am »
YoungInvestor,

Did I miss something here?  You keep saying that you can't come up with the 10%-15% cash if the lender will only pay you 85%-90% of the LTV.  

Most rehab investors I know will only do deals that they can purchase completely, including rehab costs, inside of that hard money loan...they MAY chip in some of their own cash for rehab...it just depends on the deal, but most will not.  If they find a property that they cannot purchase with a 85% LTV loan, then they don't consider it a "deal" and they walk away.

Right now all I do is contract assignments, and I will only do deals that have a 15% profit margin or better for the investor I'm flipping to (on assumption that they will be using hard money)...and that margin is calculated AFTER my fee is applied.

Using these rules, I usually have to get pretty deep discounts in order to make a deal happen, but when I get these deals on contract, they are always easy to assign.

Offline younginvestor

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Re:DEAL?
« Reply #21 on: August 30, 2006, 10:14:13 am »
Itz Marcoz you did miss something here, you missed the question that was to me, and just read the answer.

The question was: " You are virtually getting this at 35-40% below market.  Just out of curiosity, why are you wholesaling this instead of taking the deal yourself?"

And I said that I cannot afford the other 15% if a lender were to loan me 75%, or the rehab costs. Which is why I wish to ASSIGN the contract to ANOTHER investor.
I dont know about you, but even if I do not have the money for this deal, I would not walk away from this, there have been investors who have replied to this post and said that they are, and would be interested in these deals, when I find more in the future. Hence, I can work out assignments with these investors, and Im sure they would not say no.
Cheers.

Offline ItsMarcoz

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Re:DEAL?
« Reply #22 on: August 30, 2006, 11:15:37 am »
YoungInvestor,

I understand the question posed to you, but I still don't understand why a hard money loan wouldn't cover this deal for you if you chose to rehab it yourself.  Here are the numbers you gave:

Investor Price: 38,000
work needed 7k
Comps: $83-91k Range

Even if the LTV on this house is $80K, then you could purchase and rehab, based on these numbers, for $45K.  A 65% LTV hard money loan for this example would be $52K, which would give you a $7K buffer for repair overages, holding costs, etc.  Even if you put this buffer of $7K back into the house, you would be $52K invested, and if you sold it at the bottom of your comp range, there would be $31K remaining...then after you pay realtor, closing costs, and other misc. stuff, you could still clear a hefty margin.

If I am misunderstanding the LTV on the house or some other info, please help me understand.  I agree....don't ever walk away from a deal if you can turn it in some way to squeeze cash out of it, but also don't give away a deal that YOU can do for yourself to maximize your time and effort.


Offline younginvestor

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Re:DEAL?
« Reply #23 on: August 30, 2006, 08:05:30 pm »
I understand what you are saying, but I have also never done this before, and to top all of that off, this home is in Michigan, and I am a Canadian living in Toronto, from what I have heard, to get a 80% or whatever amount loan, from a hard money lender they still look at your fico score. How is this possible, if I don't have an american Fico score, or even a residence in the states. So I have virtually no money that I am putting in that is my own, I have no residence or any contact information in the states, besides my Canadian cell phone which I would be carrying with me, and I have no credit in the states. Would a hard money lender loan to me? That was and is still a question which I have asked different people, and havn't got an answer for. I figured if I assign a few homes first, atleast I will have a track record and some references in Michigan that can back me up, when asking for a loan from a hard money lender. If I am thinking this wrong, please correct me, because I maybe about to waste a year of my life.

My goal / plan right now is to work for the next year well a little over half a year, save up around 10-15k, and by next spring or early summer, I can go into Michigan, and have some money of my own to put into the deals that I find, so a hard money lender will feel more comfortable. Like I stated, if this is the wrong way, or if there is a better way to do this, please advise. Until then, my plan is to see if I can assign contracts (wholesale), and just work.  ???

Offline Knightyme

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Re:DEAL?
« Reply #24 on: August 31, 2006, 03:17:45 am »
My mind boggles at the idea of a property with great cash flow being in preforeclosure...

Beyond that  ;D, YoungInvestor, on the left hand side of this website under Investor Resources there is a link to a long list of Hard Money Lenders. Each listing includes the states in which they do business. It wouldn't hurt for you to email a few of those that do loans in MI and see what their requirements are...

Christine
« Last Edit: August 31, 2006, 07:14:59 am by Knightyme »

Offline ferg6

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Re:DEAL?
« Reply #25 on: August 31, 2006, 10:33:50 am »
A question for experienced investors.  I have a 2 bed/ 2.5 bath townhouse that I recently purchased for 72k.  There was already a renter in place paying $1100/month.  The townhouse appraised (from a hard money appraiser) in June for 100k.  The renter traded his first month rent to buy a new AC (which he did) then was late by a couple of days with his next month's rent.  

The thing is, I know it is a pretty good deal, but I still want to sell it.  I feel like the renter I inheirited (although a real nice guy) may become a financial problem at some point in the future.  Am I worrying for no real or should I follow my instincts.   I've been told that I could get 85k-90k real easy for it from someother investors.  I want the money to get myself out of other debt to improve my credit so I can buy other places.  I have a pretty good network of investors, wholesalers and RE agents and believe I can repeat this process and making $15-20k for a couple of months time (and not much work) doesn't sound too bad.

Offline gordo2417

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Re:DEAL?
« Reply #26 on: August 31, 2006, 11:24:30 am »
You answered your own question.  You want to sell it.  So sell it.  You told us that you want to pay unpaid debt.  So sell it.  You will pay gains on the sale so beware of that.  That is a cashflow critter and those deals are hard to find.  

Nate-WI
Nate Andree
NJA Investments LLC
njainvestments.com
920-428-9858
[email protected]

Offline younginvestor

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Re:DEAL?
« Reply #27 on: August 31, 2006, 09:21:17 pm »
Hey can any investors in Michigan area, or any knowledge on this subject help me out. I just got an email from someone, and he says that the laws are different in Michigan, and is asking me if I have a liscence to do this,  What is all that about? He knows that I am an investor, not a real estate agent, since when do investors need liscences?

Here is a copy of the email:

(He asked me where I lived, in Canada or the states, and wanted my address, I told him I lived in Toronto Canada, and I am not giving my home address to anyone, especially someone who is supposed to bird dog for me) , his reply was:

Your in another country? I just want to know if this is for real that's all.
I don't fool with unlawful things. how do I know your for real? You are
hesitant to give me the info I asked for. Do you do business here in the
Detroit area? where? when? How long have you been doing real estate? Are you
licensed in Michigan? there are certain Real estate laws on the books that
apply to investors. Let me know and if you want to do business

Offline ItsMarcoz

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Re:DEAL?
« Reply #28 on: September 01, 2006, 07:49:59 am »
YoungInvestor,

With the attention that real estate fraud has received in the past couple of years, many people are paranoid about the people that come across their path, and about the deals to which they are presented.  Maybe this person's questions are a result of that.

I say....always consult a legal professional when you have questions.  Going to any other source is purely speculative, and could result in major headaches and missed opportunities.

Offline Tony Chicago

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Re:DEAL?
« Reply #29 on: September 01, 2006, 10:18:58 am »
If you have the right education on  the specific deal and can present your professional help in a clear, complete and concise tone, there is not a deal out there you can't close that comes across your desk.  Are you people ready to be blown away?  Watch for my Ad in the classifieds under partners wanted.

I hope everyone is doing well and here is to profitable investing!

 




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