Hi,
I have been trying to be honest with the sellers by telling them exactly what I’m going to do, find an end buyer and assign the contract to them. It seems that the sellers don’t like this idea of tying up their property and resell it to someone else.
How can I get around this problem? Three deals gone because I’m honest with them.
Help please.
Thank you.
Good to meet you…
Maybe tell them another way… Like as an Investor I do not make money until I buy your house and then do to it what it needs and then either resell it or rent it to a end user. At this point I cant be 100 percent certain which one I am going to do however the best option for me is the first.
During the escrow period of 60 - 90 days for me to purchase your property I am going to also be advertising your property for sale… Naturally I can not sell it until I fulfill our agreement unless I find a buyer who needs to buy directly from you because of certain financing restraints … In that case I will step out of the way and they can buy it under our terms that we agreed to or they can buy it with me… Either one is okay, its just important that you know what I do and how I earn money… And remember I dont succeed until you are 100 percent satisfied.
The nice part about how I buy houses is that you as the sellr can pick the day on which you want to close your transaction. And have the peace of mind knowing its sold , not only sold but sold to someone who can afford to buy it… Thats what you want isnt it?
Good luck
Hi Michael,
Thank you so much for your advice.
I don’t know what the new investors will do without good people like you and this website.
Thanks again.
i just tried this recently what i tell people now is that i have a partner that buys with me and whoever buys the place is the partner…like when i have my buyer come see the place i tell the sellers its my partner…
thank you chuck.
Hi Chuck…
I still think it is important to tell the seller what we do… The moment they feel something fishy is going on is the moment the deal unwinds…
I include in my agreement these two paragraphs…
XV. RESELL: Seller authorizes the Buyer to enter into a sales agreement to resell the property during this escrow period. Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer.
XLVII. MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property.
Michael,
When you find a “C” end-buyer who buys this property that you just put under contract and if they are needing a conventional loan to buy the property, how do you ensure you get paid and that the deal goes through succesfully?
The only way that I know to do this is using an “invoice” or separate “addendum” that the seller signs which indicates that you are expecting a profit of $20,000 to when the property is sold–something to that effect. Is that how you do it?
Hello RobL
A line item on a HUD1 only will work if you are not on the resell purchase agreement… The moment the Underwriter for the new borrower sees your name as the seller the deal may be over… Which is why I remain the B buyer…
I have yet to have an issue on a conventional loan.
Good luck
Michael
PS Seasoning is an issue of credit worthiness of the borrower… We all should have lenders to send our buyers to who will be forthcoming with accurate information and who understand how we do business…
If you remain the B buyer, then are you saying that you have a purchase contract with the end-buyer and to close the deal it’ll need to be a “double close” at the title company?
If you remain as B buyer, won’t the underwriter for the new borrower see your name as being the seller? If it’s A-C, that’s when the underwriter won’t see your name…am I missing something?
Hello
I dont think youre missing anything…
I remain B, if I try and remove myself and become a line item I can not have ever been on the resell purchase agreement and have that agreement viewed by the underwriter…
The only time I would need to remove myself is if the borrower is marginal and seasoning becomes an issue… If that were the case I most likely would send the borrower to my lender or find a new buyer…
Worse case is record my deed that I always collect and begin the elimination period for the lender… You could skin this one so many ways…
Just not an issue…
Happy hunting
Michael