I have a couple of questions. First, do you find most people require a deposit (is it correct that this is also called earnest money) Secondly, do you find that there is an average across the line on what people charge for assignment fee? A percentage or anything, or depending on how many hours they put into it, what?
Thank you!
Yes it is called earnest money. I put a contingency in my contracts which states seller to allow buyer 10 days to deposit EM check to give me time to find a buyer so they can put up EM. Somtimes they agree, sometimes they don’t
Thank you so much for your reply.
I had thought about somehow finding a way so the buyer puts in the earnest money as well, and subtract that from what my fee would have been.
How do you personally come to the amount for your finders fee? Have you been doing this long, done very many of them?
Thank you so much again.
For my fee, It depends on the equity spread. I like to make a minimum of $5,000 for a fee on every deal. I had one for $25,000, but the seller didn’t agree to our creative financing terms. I’ve been doing this since March. Got a great education on how to do them. I just had a bird dog send me 60 rehab properties I need to go through. I’m also helping a guy in Tampa. I have a few more looking for me as well. I’m out of Chicago, but will help when and where I can if time permits.
What would you charge with a 105K equity spread?
Est. ARV: $225,000
Est. Cost of Repairs: $11,000
Asking Price: $109,000
Your opinion?
What would you charge with a 105K equity spread?
Est. ARV: $225,000
Est. Cost of Repairs: $11,000
Asking Price: $109,000
Well if the repair costs are accurate at only $11,000 I would do 1 of 3 things. Buy it, put in repair costs and rent or lease option. 2. Take over the property subject to (if possible), fix it, lease option it. 3. Contract it, assign it for a fee around $15-20K. If you are going to assign it, find out who you are going to assign it to. A rehabber or a home buyer or an investor who will fix it up and lease option it. Rehabber, assignment fee is good because they are still making a lot. An investor, always leave some equity for them. It looks attractive and you should sell it faster. A home owner will most likely get a mortgage. You need to be careful assigning it this way. If a lender is involved, get an assignment of contract written and ready for them to see.
Anything else?
Thank you for the information - I guess I am gonna hunt for rehabbers, any suggestions there? No, I have not put this in contract but I have many leads and I can’t afford to put something in contract and not find a buyer - also, dont have any earnest money lol. I will contact the seller tomorrow for some more info
I have been trying to find some investors, but I guess I need to be looking for rehabbers…google it?
Thanks!
Go to your local REI clubs. Where do you live? See if there are any hard money lenders in your area. They will have a database of rehabbers. I know a guy here in Chicago that has a huge database and I filter all my deals through him first.
Also, let the seller know if you can’t close on the deal yourself, you will find a buyer and they will take over the contract and provide earnest money. Make sure you put that in your contract. I put in subject to approval of my business partner and seller to allow buyer 10 days to deposit EM so I can find a buyer.
Good luck, keep me posted.
There are not any REI clubs here I have found yet - in a pretty good size area built up around military but not a big city or metro.
Are there private/hard money lenders who will loan on a 30/60/90 day turn around? By that I mean, no payments until the 30/60 or 90 day mark which would then be the full amount (balloon)?
Are there any that do tiny loans? (1K-10K for say earnest fees?)
Hard money lenders may not lend that little and wait to get paid. They will charge monthly interest. I would seek a private investor for that deal
Good morning!
1.) If/when I decide to actually do one myself though, would it be feasible to think there are private hard money lender who would do that? And do you mean ( I think I have seen) that some only require interest payments, and pay it off in a balloon in certain time frame.
2.) How to go about getting private investor to put up the earnest fee when there is one? I hate to advertise certain criteria and a certain deal to bring someone in for it and come to find out someone else already bought it or put under contract because I hadn’t done it yet. Have you ever had seller NOT want to give you 10 days for earnest fee? They want it NOW when it is put in contract?
I have a real estate agent in that area for the one deal who just contacted me and said they would be glad to help me get some comps and ARV for it - I have to call her in a bit - she didn’t answer the question “what would you charge” …have you done or seen this have to be done? What should I expect?
Thank you for taking so much time in helping with all these questions! I will also keep you in mind if you would like to tell me what kind of deals you look for (as a birddog or whatever) for the future.
You used private hard money lender. No such thing. You have Hard money lenders and private lenders/investors. Hard money = rehabs (mainly) can dwell into commercial
Private investor = grandpa, doctor, dad, mom, friend. These are people with money to invest and make a profit and/or interest for the money given in the transaction.
In the contract for EM you can write in their the time frame for EM. You need to control the deal.
Never ask a realtor what they would charge to do a comparable search. they are on commission and can’t accetp money outside the closing.
I look for properties that need to be rehabbed, short sales, and subject to’s.
Thanks
So I should offer to pay something if the deal goes through to the agent who helped me get the ARV? Or just let them bring that up?
That is at your discretion. You need to talk to them about that.
Hi
I got voicemail for the one I was supposed to call. However another one emailed me and sent everything he had for the county and as he said there aint much there.
There were 2 in the same town, one WELL over that 280K (he said 2 of the 3 closest neighboring houses are around 280K) and one a little over - but they were “expired” so I guess that means they didnt sell. What to do if nothing has been sold?
I am going to have to hire an appraiser, aren’t I? How much is that normally going to cost?
Thanks
where do you live? If you are not in a densely populated place, go somewhere else.
Appraisers - if you start giving them business they will do comp searches for free. i used to do mortgages and they did all my comparable searches for no charge. Start calling them and build rapport.
This house is not in a densley populated area, but I hate to pass something up that so far is such a great deal. It is right outside of very big city though.
Will do for appraisers.
do you want my email address?
Yes, that would be great.
I have been looking at them 
Thank you for the email.