Contract to purchase: my first! Need help reviewing...

General Real Estate Investing
1

Going out on a limb: Would you be willing to advise so far as to view the contracts and read through them with me?

This would be a true commitment to being a mentor! I only open it up in case there might be someone who indeed would like to mentor. It would be an incredible help.

Me: First time investor, with exposure to real estate investing growing up, a la John Schwab’s single-family buy-hold-cash flow. I have worked as an asset manager for a commercial real estate investment firm.

I have been working with a broker in Houston, TX to make offers on several multi-families. My location is currently New York, NY, so I’m relying on him to be my eyes and ears.

Unfortunately, it doesn’t seem I’ve had much to rely on so far! He’s just not been very helpful. That also shows in the contracts he drafted up. There’s nothing there that creates the bid subject to my (inspector’s) review of the property. There are also sections that would have me put $1,000 earnest money down and $50 along with the contract. I know there are ways around these, but now, at go-time, I’m struggling with how to best protect myself with these contracts.

I have them all in pdf files. I know it’s a lot to hope for, but if anyone would be willing to look at one, please do let me know. Thank you everyone simply for the consideration!

2

Why aren’t you local? RE is tough enough without the added issues of distance.

You need an attorney to review your contracts. My suspicion is that the broker is using standard forms since that’s all he knows. I limit my work with brokers and real estate agents to selling at retail. They don’t understand creative financing or the needs of investors. They only understand how to sell through MLS and the traditional ways of selling homes, which doesn’t apply to investing. They are good when you want to sell for the maximum price.

When I first started in RE, I used an agent and all he did was show me overpriced MLS listings. The fixers were priced at retail less an underestimate of the repairs. Buying them would have been the equivalent of retail. I soon learned he couldn’t help and that the investors in my area don’t buy through agents. I have had better luck finding deals on my own or through the local REIA.

You will have better luck finding a mentor at a local RE association.