Help!! What Do I Do Next?

General Real Estate Investing
1

I am working on my first deal and don’t know what to do next.

I found a property that I want to buy that is a fsbo. I am in negotiations now with the owner along with working with hard money lenders on getting the financing.

I just dont’ know what the next step is.
Where do I get a contract?
Do I hire a lawyer or a title company?

I have never taken any of the courses offered out there but maybe I should??? Will the courses teach you the mechanics of doing a deal or is this simplier then I am thinking?

Here is the deal and I welcome any comments and suggestions.

Current house: FSBO, home needs to be torn down my offer will be 85k. We are currently at 92k
Build a new modular home (I have experience in), cost of 145k.
List new home for 304,900 based on comps.

Based on these numbers I am thinking this would be a nice project to get me started.

Can someone lead me in the right direction so I can get my first deal moving???

Thanks

2

To be honest I don’t think it is a good idea for this to be your first real estate deal. Do what you wish but, if you are un sure of the next step you could be in a big load of trouble down the road.

Learn the ins and outs of real estate first by attending your local REIA meetings, mentoring with a real estate rehabber if this interests you.

I hope it works out but think about it before you go into the deal. There will be plenty more out there. Do you really want to risk all of this on your first deal?

3

hmm not sure i agree 100% here. you’ll never know everything. you have to decide at some point just to jump in. everybody’s time is different. i jumped in before i felt completely comfortable, but i knew i had to take action to get my feet wet. if i hadn’t, i would not have landed my first deal. i still have long ways to go, but i understand that i will learn actively pursing an career in REI.

ryan

4

Thanks for the advice!
It is something to think twice about. The other option I have is to sell it to an investor and just take a quick fee which I am also investigating. This might be a little much to take on from a financial point in the beginning.

The part I am stuck on is the paperwork end. No where have I found a place that tells you what you need to do such as contracts, lawyer or just a title company etc. I am assuming that the courses out there will teach you these things??? If this is the route to go then which course would you recommend? I would like to get into rehabbing.

The ideal situation for me would be to find a mentor in Delaware to work with. I haven’t been able to find any real estate investor groups around not even an REI group. So I am stumbling around for the moment soaking up what I can from sites like this where I can pick up informtion. Any suggestions???

5

This is large part of what a buyers agent will do for you. There are books out there that go over these kinds of things too, but I don’t know any off of the top of my head.

6

I can only speak of the next steps in my market.

If your sure that this is the deal for you, all that you need to do is put together a contract, which you could get from a local realtor, or at any office store. Once you have your contract together bring it to a title company and have them start title work and you can ask them if there is anything else that you need to do, to perform a sale in your area. Put your hard money lender in contact with the title company. Then close.

Thats basically it.

It sounds like your familiar with modulars but just in case

Is this home a modular (built to BOCA code) or a manufactured (built to HUD code_

Check with lenders in your area and find out the current lending policies on both modular and manufactured homes.

Lenders have definately cracked down on Manufactured homes, and sometimes even modular homes. The problem lies in the fact that they want to have appraisals with comparables that are only of the same type of construction. So say you put up your modular and there arent any other modulars within 10 miles of your home that are similar in size, etc, then the buyer would not be able to obtain good financing because of the lack of comps.

Have you gotten estimates for the tear down and removal of the home that you are looking at?

If you are intending on selling to another investor, find them before you put the pen to paper.

You dont need a course to put together a deal, but be sure you examine every part of the deal you are looking at. Leave no stone left unturned in the arena of bids for tear down and reconstruction, the time value of money while you are rebuilding, the time frame for tear down and rebuild, the market trends in your area, what your competition is priced at.

Also if you dont know an insider at the modular places, be sure to shop around, prices vary widely from place to place.

Eric Medemar

7

Thanks Eric…

I knew it was going to be simple and all I needed was for someone to just spell it out. Logic told me what to do but I just wanted to make sure.

I have decided on this deal to pass it along to an investor make a few dollars and move on to the next one. I still believe the whole project is a good one but since this would be my first I dont’ think I am in a great financial position at this time to take on the full risk.

I do have to say that I really enjoy this site and have learned a great deal in just the last month that I have spent crusing around.

Thanks to everyone for sharing your experience and sound advice.