I feel like I'm getting in too deep

General Real Estate Investing
1

I’ve been running a marketing engine for weeks and I finally decided to actually try to purchase some deals: actually get them under contract, that is.

I’m offering what would be a strict 70% LTV on a probate house that should be free’n’clear according to my title search. I offered 70% I get closing costs, $250 to extend contract to a total of 28 days. I figure I can get an inspection done by a homie’s dad (a general appraiser) in a week, and wholesale this bad boy in the following 21. It’s a great home, in a great part of town, with a garage, backyard, landscaping, just a little worn. Could rent at 1000+/mo easy.
Offer made for $110k, interested in wholesaling it for 120k

Deal 2: Another probate that’s been up for 333+ days. I haven’t seen the inside, but from the looks of it this could be another sickly sweet property at a good price. It has a hot tub. That leads me to believe it had owners at one point who put some lovin’ into it. Otherwise it’s a corner lot a few blocks away from a western metropolitan downtown. It could be held and then flipped into a luxury lot and resold in a few years (when’s the market going back up?) for massive bank. I’m working with the 70% LTV again, with a similar contract since the owner doesn’t want to carry paper. The owner is out of town and it’s perhaps cleared probate. There are tenants. It would make a great rental for a cash-buyer.

I still need to see the lease documents but this sounds like another deal I could jump on at 70%… I need to hear thoughts on using this 70% strategy to wholesale deals. I got the marketing engine, the website, the corporation, the edumacation, but can I really do it?

I’m intimidated. I can’t believe I’m actually going to have to find the investors to wholesale these to, or else structure them completely as lease/options. I’ve taken RE licensee courses and I’ve been investing in one way or another for years but these are the first BIG investments I’ve done in my life. I have a short list of buyers but it’s all coming together at the same time if you know what I mean . . .

I think I have a strategy to find another investor, but this is getting quite wild quite quick.

Can this really be done? I got a great feeling about these deals, they must be around the 15th or so deal I’ve searched out (20+ if you include my time in MD!). But I am intimidated. This is the biggest step yet!

Can this really be done???

Please contribute with your input! :wink:

—Nick

2

Hi,

I like an agressive go getter willing to do what it takes to succeed! Here are a few things to help you become successful.

First 70% LTV is for a pristine property with no defered maintence and in good reasonable up to date condition, if the property needs new carpet, paint, new lights, doors or tile work or rehab / remodeling this amount of money (estimated) is deducted below the 70% LTV discount. Just watch you don’t contract something for 70% LTV and discover you really have a home that should have been contracted at 55% LTV.

Second keep building your buyers list as I generally buy what my buyers want not what I see as I want to move property and it does not make sense to contract for something my buyers don’t want. I always ask my buyers what there looking for? In what area? How many bedrooms and baths? Square footage? Yard size? Garage Size? Formal living and dining? Basement?

Even though I also buy rentals, I don’t pay retail for rentals and if you send me something at 70% of value I expect it in relatively good condition or I expect to buy it cheaper so I can repaint and put in new carpet.

It can be done but you have to have all your cards in a row to do it!

                                GR
3

Congratulation on doing the hardest part… Getting started!

I think your purchase price may be too high. You never want to offer more then 70% of ARV INCLUDING the cost of any repairs. Even if the property may be in “rentable condition” you need to assume that any investor will want multiple exit strategies. This means that they may need to sell the house and therefore need to rehab the property into a “like new condition”. That is why all deals should be purchased at 70% of ARV including the cost of any repairs.

If you have a contract at the correct price you should have no problem wholesaling it out.

Good luck!

Rob

4

Hey guys,

Things are rolling and going! I appreciate the feedback and the stoke. I realized I couldn’t get that first seller quite low enough. Gosh! If it was only 70% LTV I wouldn’t have any problems! But then nobody else would either and there’d be no room for me!

I feel my first deal coming. Thanks again for the reminders to hang in there and that ‘if you get it under contract, they will come.’

Happy investing,

Nick