Hello all!
I got a call from Craiglist ad I posted. The guy has a house on 10 acres he said he wanted to get rid of “this time last year.” He’s very motivated. Said that the taxes have gone up because property values in the area have gone up and he can’t afford the taxes anymore because he is disabled. It’s vacant and out in the boonies. The land is filled with trees and is terraced. It’s an ugly mess but he’s willing to help clean it up. On the tax records, it shows its all worth $72510. He said he did have it listed on the MLS for 6 months for 76K but had no offers. Also said it needs about 16K in improvements. Sorry misread my own handwriting. I spoke with another wholesaler from Realnet. He said he had a buyer with cash looking to get out of the city and looking exactly in the area of the subject property. He said if I could get the buyer to let it go for 50K, then we could split 50/50 on it since he had the buyer. He said his buyer will pay 60K for it. I spoke with seller, he said 55K is good but if 50K is all I can do, he’ll look at it. Also, he said there’s a vendors lien on it for 40K and he owes back taxes of 4K. I’m not sure how to comp the property. The subject property is almost 2 hours away from me. The wholesaler said I could sign a non-circumvent agreement he sent and he wouldn’t leave me out of the deal. What should I do next? Wholesaler emailed me the noncircomvent agreement. This is a deal I would have never been able to work with had not the wholesaler told me he had a buyer. I hope I didn’t leave out any pertinent info. If so, let me know. Thanks in advance.
At this point, I’m not sure I would be concerned w/comping the property. I would also not be concerned with how much the owner owes or what the tax records show.
You have a motivated seller & you have a wholesale buyer. Right up an offer! Tell the owner (and write it in the contract) that you are offering $50k w/a financing contingency and/or X amount of days for inspections so you can get your purchaser over to see it.
Remember that 50% of any deal is worth more than 100% of no deal!
Good job!
No replies? Is there something obvious I’m not seeing here? Well let’s see if I could clarify some. I looked on Zillow, cyberhomes, realtytrac and Realtor.com to find comps. It appears no home has sold in that area for 6 months. Houses and land for sale range from 75k for a house to 1 mill for 28 acres. But those are just what’s listed, not sold. Will a real estate agent be able to see recently sold properties I’m not currently able to see? How do I value this piece of property?
For the second part, I have 3 options:
- Just sign the non-circumvent, and trust that the wholesaler won’t leave me out.
- Put an option on the property(sight unseen, is this ok as long as I have an inspection contingency?), and then assign to the wholesaler, thus saving me a trip out there. OR
- Drive that 2 hours to look at the property, then option 2. ???
So the big question is, can I put an option on property I havent seen? The owner lives 20 minutes from me. so I’d be able to meet him in person. I really don’t want to drive 2 hours then back. I have a really old Neon with alot of miles on it and I’m not sure it will make it. Your thoughts please. :help
REIforNewbies, Thank you for your advice. :biggrin. I will call the seller today to see if I can meet up and put the property under contract. Hope things work out, I could really use this. Definitely I agree 50% of something better than 100% of nothing.
Hi, newbie here. I am a little confused on this. Welfaremom has a wholesale deal where property is worth 72k, she is trying to pay 50k to turn over to a buyer for 60k, am I ok so far? What I don’t understand is where does the vendor lien & back taxes come into play or does it? Who’s responsibility would those be? Does welfaremom just tell her buyer about these & he is responsible for them? Also, how much total is it going to cost welfaremom to do the wholesale deal, if anything? Like recording?Or transfering paperwork cost or whatever? If someone could please break down this deal into laylaymens terms, it would be so appreciated. Thanx :biggrin
So, you are too lazy to make a 2 hour drive for a quick $5,000?
If you want to make money with real estate, you are going to have to put at least a llittle bit of work into it.
That property could be anything. It could be a burned house. It could be next to a pig farm. I could be a swamp.
You’d better believe that the end buyer is going to take a look at it before he buys it. If it is a worthless property, he isn’t going to buy it from you, and you will have a conrtract that obligates you to pay money that you don’t have and have no way of getting…
Hey folks, this welfare mom is not too lazy to drive out to this property. How could you say this to her in front of everyone? Didn’t you read her reason why she didn’t want to go out there? - She has AN OLD NEON AND SHE DOESN’T KNOW HOW MUCH IT CAN TAKE - IN OTHER WORDS IT COULD BREAK DOWN.
THIS WOMAN IS DOING A GREAT JOB HERE TO GET HER SOME MONEY.
LET’S HELP HER AND NOT CRITICIZE HER. SHE IS NOT LAZY. SHE IS UP AND AT UM. GO GIRL AND DON’T LET ANYONE GET YOU DOWN. WE ARE HERE FOR YOU!
bjean
My question is the same as GirlDog. Can someone please answer how does the back taxes and liens play a role in this transaction.
GOOD LUCK WELFARE MOM. Make sure your agreement has the inspection period as stated above and also add in there “All decisions subject to partner’s approval”.
So, your advice is what, bjean? That she should sign contracts for property that she hasn’t seen. That she should send buyers out to look at property she hasn’t seen?
I’m giving you good advice, welfare mom. If that end buyer goes out there and it is next to the county dump and the roof consists of a couple of moldy 2x4s and a FEMA blue tarp, the buyer is going to be mad at your “co-wholesaler”. He in turn is going to be mad at you, and he isn’t going to do any more deals with you. In fact, he will share the story with his friends, and they might not do any deals with you.
You don’t even really truly know it is a house. You might get outt there and find a 1970 siglewide mobile home.
You can rent a car for $25. Or, don’t you have any freinds or relatives who would like a nice drive in the country, if you pay the gas and buy lunch?
If you belong to a church, appeal for a church member to help you get on your feet by providing transportation just this one time.
You can not take the seller’s word for what the property is worth, what condition it is in, or what it would cost to fix it. I suggest that you don’t even believe he will clean it up. He hasn’t so far.
He doesn’t even have to be lying. Sellers see the good points of their own property and can’t see the bad points.
If you want to do real estate, you have to figure out how to make it happen. You can’t do it by sitting at home on the computer.
I am not being mean to you. I hope you make it. I hope this deal works for you. I hope you make tons of money. But if you want to be a real estate investor, you have to put in the effort to figure out a way to get it done.
I agree with Tatertot. You need to know what you are buying. Have you even seen pictures of it?
This happened to me once about a year ago. The seller was in Tampa. and had a house about 3 hours away. She told me it just needed cosmetics. The numbers looked good, so I drove all the way down there (big, big mistake) only to find out that the place was a total DUMP.
Now I stay within 20 minutes of my house.
Why not find a real estate agent in that area (or anyone, for that matter) and see if they can do a drive by and take some pictures for you. Maybe you could send them a gift card for dinner somewhere as a thank you.
Just a thought.
And to answer your question, yes, you can get an option on a property you have never seen before.
Girldog- if there are liens attached to the property, they will come up in a title search, and have to be paid off at closing. So, if the purchase price is 50k and the outstanding liens are 44k, then the seller would be getting 6k at closing (minus closing costs), with 44k going to pay off the liens and back taxes.
Steph