Hi, I have a quick but complicated question. I am new to investing. I have a private investor lined up to fund my deals. My question is- his requirements are 3-fold: a post repair appraisel, a clean title policy, and insurance on the property. How can I aquire these 3 vital requirements with as little $ as possible? Do you have to pay for title policy to prove title is clean? Picking up hazard ins. for 2-3 months? Cheap post repair appraisel, and when if were talking about pre-foreclosures? I know thats alot to cover but would appreciate any advice. Thank you.
Frank,
It sounds like your investor knows what he’s doing. The things he demands are protection for you as well as for him. An appraisal will ensure you are buying a bargain rather than a money-pit. Repairs have a way of being bigger and costing more than you expect anyway. You need a clear title and a title insurance policy so that you can sell the thing when you have it prettied up. You need insurance to make sure that an arsonist or vandal does not destroy your profit one night. I believe you will have to pay for those three things up-front. You can probably get a payment plan for the hazard insurance, but I believe you will pay for appraisal & title insurance in full. If you sell the property, you will get a refund of some/most of the hazard insurance. You can save a few $$ by asking the buyer to use the same title company & asking for a reduced price. Lastly, you may be able to borrow all that cash from your investor at purchase time. Ask the investor if he prefers any title company or insurance broker over others.
Good luck,
Ray