My name is tom and I have a few questions about obtaining a cash flow. and I want to do it by getting rentals. My first question is how much money do I need to show in the bank for a property. My second question is what steps are involved to get cash back at settlement, how does that works. B/C a friend of mine gets cash back at each property he settles on by bumping up the sale price.??? I guess they are the only two question I need anwsering
Not sure exactly what you are asking with the first question, but as for the second you could get cash back at closing by bumping up the sales price (as long as you can get financing for the new price) or just by negotiating a lower price. I.e. if you are looking at a prop listed at 100k, and you your offer of 90k were accepted, you would have 10k to play with… you could modify your offer back to full price asking for 10k in cash at closing to cover repairs, whatever. In that case, it would make no difference to the seller, he still gets his 90k.
One thing to consider tho’. If your goal is to get cash, state that in the offer/contract. “Seller to pay buyer 10k in cash at closing”. If you were to say, “Seller to pay 10k towards closing”, or something similar, then you would only get money towards closing costs - if your costs were only 3k, then you lose 7k, if that makes sense.
If you found a property for say 200,000 and you negotiate the sale price to 190,000 and tell the seller you want to increase the sale price to 200k and get 10k back at closing is this legal if so how would you stucture it in the contract?