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Author Topic: Doing my first deal...need some advice  (Read 3141 times)

Offline mattteuschel

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Doing my first deal...need some advice
« on: December 09, 2010, 03:38:24 pm »
Alright guys, I'm about to do my first deal. I've built my buyers list pretty good (I have 10 buyers, 4 are individual investors, the other 6 are groups).

I went and looked at this property today and took some pictures and sent the information to my buyers. I'm going to be buying it for $13,500 and wholesaling it for $20,000. It has an assessed and taxable value of $74,460 and will cash flow really well.

But I've run into a challenge and wanted to know if anybody else has run into this and if it's really a big deal. The seller and I have a contract drafted but, I haven't signed anything yet because I've read through it and the earnest money is non-refundable with no inspection clause and he can only hold the property under contract for 5 days (so we will have 5 days til closing).

Now, I have a buyer that's already very interested in the property, so I'm wondering if I can take my buyer to see the property and have an inspection done, even though there is no official contract yet. That way, if the inspection reveals something the buyer doesn't like, we're no worse off than we were before and then I won't have to back of the contract and lose my binder deposit.

Any ideas? All advice will be much appreciated.

Matt

Offline mzlady

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Re: Doing my first deal...need some advice
« Reply #1 on: December 09, 2010, 11:10:42 pm »
If the house is listed with a realtor..I wouldn't do it , I would not take your buyer to see the house because you will then have to go through him to have access to the property and the buyer could just call the realtor and thats it for you, you need to tie that property up! having a contract will do that and nobody can make any moves without you!..and secondly i think fear may be an issue for you because I went through the samething, to cover your self put the house under contract if you only have five days you could always ask for an extention with a private owner all they can say is no and you will just be out your earnest money which should be only $10.00 maybe $20.00 if you want to be nice. If it is a private owner they could still go around you so I wouldnt take any chances. And if I was you i would tell the owner you need more then 5 days don't put your back up against the wall like that, there are to many other deals you could be working instead of dealing with someone who wants to close in five days thats BULL  :flush
tell your owner you need atleast two weeks or 21 days there is to much that could happen in 5 days really...
hope this helps

Offline idhomebuyer

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Re: Doing my first deal...need some advice
« Reply #2 on: December 11, 2010, 01:40:06 am »
Kudos to you on getting your buyers list. What method helped you the best to get buyers? I've heard of quite a few different ways, and i am curious to know which method helped you the most.

On that note, I agree with mzlady on this one. No buyer in their right mind will go for the ability to not have any inspection, esp. if they were a normal person off, so you need to express to the seller you need to have access to inspections. If you can, try to get the contract and the inspection time to last 30 days. When your end buyer goes to inspect with you (preferably), explain to the seller that they are your contractor and they are there to help you "inspect" the home. In your contract, you want to have a contingency for the sale of the property, "Upon my partner's approval" (which will be your opt-out clause in case you can't get a buyer for the deal for one reason or another.

When you find an interested buyer, get a non-refundable earnest $ deposit from them (from $1k to $2k). This way, you will:

1. Know the buyer is serious and they have the money.
2. If for some reason the buyer backs out of the contract with you, you get to keep the deposit.


For one reason or another, you will find on rare occasions that the buyer may decide to circumvent
you. If that happens and you are still worried about the buyer cutting you out of the deal, you can record a document with the county recorder's office that will "cloud" the title so when that house eventually gets sold to that bad buyer, they won't be able to unless they pay you the fee. This way, they will have no other choice but to pay you. Eventually when you do enough deals with these buyers, you will get to the point to where you can trust them and they will trust you.

I hope this helps you. Have a great weekend.  :biggrin

Alright guys, I'm about to do my first deal. I've built my buyers list pretty good (I have 10 buyers, 4 are individual investors, the other 6 are groups).

I went and looked at this property today and took some pictures and sent the information to my buyers. I'm going to be buying it for $13,500 and wholesaling it for $20,000. It has an assessed and taxable value of $74,460 and will cash flow really well.

But I've run into a challenge and wanted to know if anybody else has run into this and if it's really a big deal. The seller and I have a contract drafted but, I haven't signed anything yet because I've read through it and the earnest money is non-refundable with no inspection clause and he can only hold the property under contract for 5 days (so we will have 5 days til closing).

Now, I have a buyer that's already very interested in the property, so I'm wondering if I can take my buyer to see the property and have an inspection done, even though there is no official contract yet. That way, if the inspection reveals something the buyer doesn't like, we're no worse off than we were before and then I won't have to back of the contract and lose my binder deposit.

Any ideas? All advice will be much appreciated.

Matt

Offline mzlady

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Re: Doing my first deal...need some advice
« Reply #3 on: December 11, 2010, 12:50:29 pm »
Couldn't of put better myself! :beer

Offline Sean Terry

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Re: Doing my first deal...need some advice
« Reply #4 on: December 12, 2010, 02:03:48 am »
Hey Matt,
If the property is listed than I'd submit my offer with a normal 10 day inspection period and a 30 day close.  The Realtor must submit the property to the seller for review and they just might accept or counter. 

If you're dealing with the seller I would tell them you will no way in this market commit to a 5 day close, but tell them that you have several close investor friends that are seriously looking to buy another property by the end of the year for tax purposes. 
Push the seller to get an exclusive  flex option, this will get a level of commitment from the seller and you will have no risk or pressure to sell.  If you find a buyer than convert the option into a contract and proceed to closing.  If you don't, no skin off your back. 

Hope this helps,

Cheers :)
Sean
Hate Your Job? You Would Not Believe What I'm Giving Away for FREE...
http://www.Flip2Freedom.com

Offline xpandergt

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Re: Doing my first deal...need some advice
« Reply #5 on: December 24, 2010, 09:37:38 am »
If the house is listed with a realtor..I wouldn't do it , I would not take your buyer to see the house because you will then have to go through him to have access to the property and the buyer could just call the realtor and thats it for you, you need to tie that property up! having a contract will do that and nobody can make any moves without you!..and secondly i think fear may be an issue for you because I went through the samething, to cover your self put the house under contract if you only have five days you could always ask for an extention with a private owner all they can say is no and you will just be out your earnest money which should be only $10.00 maybe $20.00 if you want to be nice. If it is a private owner they could still go around you so I wouldnt take any chances. And if I was you i would tell the owner you need more then 5 days don't put your back up against the wall like that, there are to many other deals you could be working instead of dealing with someone who wants to close in five days thats BULL  :flush
tell your owner you need atleast two weeks or 21 days there is to much that could happen in 5 days really...
hope this helps


exactly, dealing with fsbos is the best way to go.
Bulls make money. Bears make money. Pigs get slaughtered!

 




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