I got this 78 year old bird dog named Frank, He used to be a realtor eons ago. The guy is rich with property, has a house in Millerton and Shaver lake, but he tells me he has no cash. He contacted me about 3 or 4 months ago from my help wanted ad on Craig’s List. At first he was sending me some over priced properties off the MLS, I explained I wanted properties not listed that are in bad shape.
I enjoyed emailing the old geezer but I avoided his phone calls cuz dam cud he talk.
Anyways so finally he sends me this property that has 2 houses on it and the owner is fixing them up. He tells me he wants 95K for it cuz he’s getting it for 90K.
Its in the worst part of the city near Chandler Airport, the fair market value is only 89K
I add my fee of only 4K cuz I didn’t think anybody wud want this over priced property in hell town.
The seller is almost finished with the interior rehab, these two houses, a 3/1 and 2/1 will rent for $1500 or more Friking dollars.
So now how to sell this thing…
I got this buyer from San Jose, I laid the deal out in front of him with all the bad and then told him about the outrageous cash flow potential. Holy shitsky. He wants it,
I’m not sure how Frank found this deal, he’s gonna be collecting 5 grand and I got a 4K payday coming.
I luv how this works, seller is getting $90,000 cash, Frank and I walk away with 9K, the buyer gets a nice property with good monthly cash flow. happy happy joy joy.
Frank is older than me, but I’m his new daddy.
Let’s make some Money…
Rando
Love these stories and honestly have learned something from them. My biggest question is how do you pull comps and cash flow numbers for what seems such a vast area? Funny I always catch myself saying what would that dude on the internet do with this deal. You really get my imagination flowing. :beer
I use this Title company called First American, they provide owners names and mailing addresses of all the properties I send them, and it don’t matter what town or state their in.
Tell them your a local investor and you will be using their Title company to do your deals.
They also include a list of recently sold with distances from my target property, but I usually don’t even look at that.
What I’m looking for usually is houses that are in such bad shape with a distressed seller that I can get them for 40-60-sometimes less of ARV.
Those numbers provide me with a workable deal.
As for cash flow potential I just do a little math in my head, a 100K house with a low to medium interest loan will cost you 600 a month with taxes and insurance. A 3/1 in a bad area will rent for $900-1100, a 2/1 in a bad area $600-800 or more. This deal looks like it cud produce a serious cash flow of 8-900 buks
Now who wud pay 99K for a property with an ARV of 89K A landlord type buyer and this cash flow potential on this 2 houses on one property deal shud get the greed glands going.
Interesting I have First American Title in a city about a hour from me. I wonder if it is the same company. Did some research and it seems there are title companies in my state but use lawyers to do the paper work. I’m going to call and see what they can offer. Thanks for the help. Definitely didn’t know you could pull comps from a title company.
My bird dog Frank has been pre-occupied with a water leak in his lower lake house, and getting ready for winter in the upper lake house with getting wood etc. Now he says he is considering selling the high lake property and getting something within his budget, oh really, you think?
I’ve been hounding him to get the frikin contract signed, now he says he has a partner and they are trying to renegotiate the price somewhat lower. Cant blame them for that, they are set to make $2,500 each and I got 4K.
Frank asked me how he shud go about negotiating a lower number. I wanted to tell him to go for the throat, kick em in the gonads and rip out their guts and, .
Maybe I’ll just tell him to push for a price that gets us all 4K each because the exterior of the houses need paint and lacks any or some curb appeal to justify full price.
So, your bird dog is going to re-negotiate and try to get the price even lower? So they can make more? And he’s asking you how to go about negotiating this?
Be careful…Greed blows deals. Good luck.
Yea, they didn’t hand this deal off to me, They seem to be getting it done. Frank tells me they got a new lower price and will have the signed purchase contract soon.
It seems Frank and this other newbie met up at a local REI meeting. They been driving for dollars and found this deal.
Once they get a taste of cash profits they will come up with more deals.
It’s getting aggravating, Frank informs me the sellers rejected his partners contract and sellers will use a realtor to prepare the state purchase contract. Sellers with a little real estate knowledge are a pain in the rear. but, it shud still work, probably delay things another week or 2.
Frank and his partner need a good electrical jolt to the testies to get in gear.
I still don’t know what the final price is and what they negotiated it down to.
Now Frank tells me the seller is a lender, he hopes the seller accepted a lower price.
I’m asking Frank if he has communication with his partner, and banks don’t allow assignments.
I don’t even know what the price is.
I been pushing for a signed purchase contract for weeks.
I shud cut back on the caffeine.
Frank says they have it on contract but still wont or hasn’t said for how much, I don’t know his partners name or have contact info, I still don’t know what mortgage company.
Once Frank told me they did have it on contract and had paid a $500 deposit I placed an ad on Craig’s List for $119,750
I emailed Frank that I needed more info & I had started to market it for 119 he emails me back that that price might be in conflict with the ads his partner is running,
I tell Frank there are too many cooks in the kitchen, and I was going to let him and his nameless Partner run with it.
And I’m going camping and hiking. I’ll stay in my cave in Northern Idaho & get out b4 the first snow.
I had given up on this deal because it was a big cluster muk. But then I had left an ad running for $99,750 on Craig’s List.
Well hells bells.
I got 2 calls today, one an investor lady that had contacted me b4 on an earlier deal, and she goes out and looks at this one and wants it, at $99,750 She’s ready to sign the assignment and I’m wondering if I shud take the 8K in cash declare myself unfit for duty and run. Frank and his partner are happy with $2,500 each.
It’s crazy how these deals can mutate.
My 78 yr old bird dog Frank finally sent me his partners name and phone and email.
My buyer is a realtor named Jeanette, she’s ready to buy this place ASAP.
Franks partners name is Fortino, he emails me to say he wants to see proof of funds and wants his attorney to look over the assignment.
I think this is Fortino’s first deal but he’s an expert cuz he just got back from a seminar and has read the books.
I emailed him and told him to hand it over to me and step back, that I’ve done almost 50 wholesale deals and I’ve never asked for proof of funds or had an attorney involved. If my buyer wants the property and we start escrow you can bet he’s going to buy the darn thing. If you want this deal to go thru then stop all the time wasting BS.
I originally thought Frank was the problem, now I think its this Fortino. I just got an email that he wants me to call him.
This is fun,
I spoke w Fortino, he’s not a bad guy, just too analytical. But now he txts me to ask what is title officers name so he can put it on the contract. Holy crap. I tell him to just email me the purchase contract and step back. But Fortino don’t like stepping back.
Then he sends me another deal that sounds killer, and the address comes back as an empty lot and hes getting it on contract for $149,000 today. Supposed to have an ARV of 275K and needs 50K in repairs. If only he cud remember the correct address.
Fortino at first wanted to wait till Monday evening to meet and go over the property and contract and terms and yada yada.
Now its Monday morning and I already got the dang thing sold 24 hrs ago. I thought I was lazy and laid back, easy going, procrastinating, This guy Fortino makes me look good.
Looks like this deal cud happen, buyer wants it, seller wants to sell, and I’m gonna put it all together.
Today I send the assignment for buyer to sign and she wants to know how long she has to get the funds info title?
I tell her escrow can take a few weeks. Then I get that oh no feeling, Are you getting financing? She comes back with, yes.
I say “oh crap, we need a cash buyer”. She emails back and says wait, please, I can pay the $13,000 up front right away.
Wait, hold the phone, get out the Jergens, what did you say? Oh man, those are some magic words.
Now if I can get Fortino bandito in gear to get me that frikin purchase contract and then we all sign this assignment and just hand the deal off to Jeanette our buyer. I’ll start escrow for her and get her going if she needs.
Somebody wake me up, I was ready to run from this deal. Now I’m headed to Idaho with a pocket full of clams.
So with the upfront cash you assign the contract take 10k and what about the other 3k? Or do you take the entire 13k?
The assignment fee is $13,750 Fortino put $500 earnest deposit down, So our buyer will pay out $3,000 to Fortino, $2,500 to Frank and $7,750 to me.
The buyer gets the contract on the property for $85,500 Or $99,750 total after she pays us.
I can see why she wants it, similar houses on the MLS are going for 149K and they need to be rehabbed and they don’t have a second income producing house on the property.
The small finance company that took this property back has totally rehabbed these 2 houses except for the exterior. New doors and cabinets and fixtures and tile and wood flooring, even new frikin appliances and they got it rented.
Fortino says the ARV is 120K but Zillow puts value at 89K
It took Fortino 3 days to get the signed contract to me, I have also been waiting for the signed assignment from Jeanette our buyer. But this crazy female realtor is not responding to my emails.
So, I placed another ad on Craig’s List and a few hrs later I go into CL and look for it. I cant find it so I log into my account and somebody had flagged my ad for removal, WTF?
My deal must be better than the realtors deal that flagged my post. Did I ever mention how I dislike realtors?
Realtors are like the teachers of real estate. They think they know everything after 3 weeks of training, they think you know nothing if you didn’t get 3 weeks of training, and everything is illegal if you’re not a realtor. I got my fill of those guys on another forum.
This deal gets crazier by the minute. Finally our buyer Jeanette signs the assignment and emails it to me, us 3 wholesalers sign it and b4 I cud say whoop te do snake tip, I got a few more calls, one investor has offered 109K
I asked Frank and Fortino if they wud like an extra 2 grand. He was all ears. I suggested we cud tear up Jeanette’s signed assignment and make up some lame excuse and sell to this new buyer for 109K
I thought ther may be some ethical issues, but not between us three,
Put a few buks in front of our face and morals and ethics are just words in the dictionary… :evil
My new buyer looked over the property and said it was in rough shape and he didn’t want it. Now Fortino says the sellers sent him an email saying they are 3K over on their rehab budget and not to start escrow yet cuz they need to up charge us. This is a finance company.
Well, I have a signed purchase contract for 86K and a signed assignment for $13,750, So, I started escrow this morning.
I informed Frank and Fortino.
Shortly later Fortino calls and says we shud hold off on escrow until he talks to finance company.
I told Fortino bandito that I already started escrow, I got signed contracts and I’m moving forward on this, of course Fortino says he don’t want to get involved in a lawsuit.
I tell Fortino in between his whining, just blame it on me, tell the finance company ur partner Rando is a real ahole and he’s not gonna lay down on this. Frank says we shud all lower our assignment fee. I say nay to that.
And the drama continues.