in the offer to purchase there is a clause about property inspections.
option 1 is to give the seller the property inspection report and he has so many days to correct the issue. option 2 is no report to seller if you find something you dont like you can walk away. should i check option 2 since this seems to protect me better or can u check both options . just a little nervous about my first offer and getting out of the contract if i findsomething in the inspection or with the numbers provided by seller. thanks for your help
in the offer to purchase there is a clause about property inspections.
Beside the home inspection being in the contract I still put on addendum like subject to satisfactory home inspection, apprasial, repair costs and partners approval are a few and by a certain date like the length of the option period.
Nothing says newbie like putting “subject to partner approval” in your contract. This is straight out of the slimy guru playbook and many realtors and sellers will know it. You might as well have NEWBIE printed on a T-shirt!
Instead of playing these silly guru games, I suggest becoming educated enough that you can make an informed decision when looking at a piece of property. Then, either buy it or not, but don’t put any more weasel clauses in than absolutely necessary. Weasel clauses will take you out of many deals and will eliminate your opportunity to buy REOs. Banks with REOs normally won’t accept ANY contingencies.
I would check box number 2. Then, if the building needs work, you have the option to simply walk away. If both parties want to proceed at that point, you can come to an agreement.
I know banks will not accept that and I do not use it with the banks, but I have talked to several investors of 15-20 years doing re innvesting and have seen their contracts on some and they put it in. I know for a fact not just newbies as I know I am use them. You might not but many do. Most so called realtors I talk to be it only a few dozen know nothing about investing at all even I a newbie knows more than them.
I have learned a lot from the gurus Robert Allen myself and have not a bad thing to say about them as of right now in the 4-5 months I have just been doing this since moving to California.
Just wandering where did you get your training in re investing or do you only manage other peoples rent houses plus your own. Plus I just taked to other investors and they have used the term partners approval with banks so I believe that you hve been miss informed or have not experienced using the term yourself.
I went on your website and you are a rental guru, just a landlord and most likely a good one but a guru yourself how funny with you bashing them. At least that tells me some about your training. Thanks for your comments.
I am familiar with the term. A few of the “gurus” suggest consulting with an imaginary “partner” so that you can weasel out of a contract if you change your mind. Why not simply do the work to learn the business? Then, you won’t have to back out of anything. I’m especially surprised that you are apparently a property inspector and would have to use these clauses. Surely, you can inspect a property as you look at it and decide whether you want to buy it or not.
I don’t manage properties for other people. I only manage my own rentals. I got my real estate education from a variety of sources including reading just about every real estate book in sight, going to REIA conventions, joining my local REIA, and most importantly learning from successful investors. And I don’t know of a single successful investor that consults an imaginary partner before deciding to buy a property.
I know that you are new to this site, but I am NOT a guru, nor do I have any ambitions of being one. I make a living in the rental business. I do not sell expensive courses, upsell newbies into the next level of seminar always promising a “secret” that doesn’t exist, or pretend that you can get rich in real estate with anything other than HARD WORK, and I certainly don’t suggest using imaginary partners.
Well I do and have met them big deal. We are in different circles. On some houses I will try to tie up the property without inspecting completey then make sure if I want it or not. On some deals it is better to get into the option period then decide. everyone has different ways for themselves. Weather for rentals or flipping. I am sure I know a little more than you about inspecting a house with experince in two states and 8+ years of inspecting so if you want to challenge that sure go ahead.
I might be new to re investing but I have a lot of knowledge being in and around it in all ways for 8+ years and relatives that are realtors that have worked with investors. So I am not your average newbie. What works for one might not for another big deal again.
I am all for any clauses to cover me in the investing world and one who does not try to protect themselves in all possible ways WILL evenually get into problems. I would think you should now that being a landlord and have I guess written a book about it which says a lot about where you are coming from. So thanks for everything. Anyone who does not get a complete inspection and them amke the decsion is asking for surprises. Getting out of a contract if needed is great no matter how and that is what the option is for. If you think you can just walk in and around a house and not enough you are crazy and very foolish and lucky if you have not been surprised where it has costs you. Well I have rambled and had enough fun for now again thanks for your comments it all is learning for the both of us we all need it.
As for secret that do not exsist that as for Robert Allen is not like that or at least with us. They teach them same as I have heard many investors talk and more. We were just able to get all that info in a shorter time. As for fake parnters how do you now I do not have parnters like one here and one in texas. You really should know the facts before you start talking on your soap box. They drill into all at our training that it is nothing but hard work and if you have not been to any formal training how do you know from any of your own experience what formal training, senimars and all is like. Sounds like to me you are not talking from your own experiences which means you do not actually know then beside what someone else has told you. Keep up the good work in being a successfull landlord.
I will certainly agree that you are a much more experienced property inspector than I am. Actually, I’m not against using whatever contingencies are actually necessary. For example, if a person was getting financing, then a financing contingency is certainly reasonable. Likewise, if a new investor doesn’t feel comfortable inspecting the property, then an inspection contingency would be in order and having someone qualified inspect the property would also be a good idea. However, I am against pretending that an investor has a partner when there is none. And I am also against tying up someone’s property and then backing out because the investor didn’t do their homework.
I have not taken any expensive bootcamps or seminars. However, I have attended many REIA conventions and heard most of the gurus speak at length. I have also read many books by the gurus. Many of the techniques that the gurus teach are quite valid and I have learned specific techniques from many of them. What I object to is the purposeful lack of truthful and complete information from many of them. They only teach the optimistic side of real estate. For example, of all the gurus that I’ve seen speak, I have only heard one guru (Vena Cox Jones) talk about expenses in a realistic fashion. I have personally heard gurus describe cash flow as the gross rent less the mortgage payment. I have even gotten written advertising from major gurus saying this crap. Even though I had successfully run other businesses before I got into real estate, I am ashamed to admit that when I got started in REI, I believed the guru nonsense that cash flow was gross rent minus the mortgage payment, taxes, insurance, maintenance, management, vacancies, and utilities paid by the owner. I should have known better, but since most of the gurus were saying it, I believed it. Either these gurus are lying or they don’t know what they are doing. It is just as simple as that. What I discovered is that every successful landlord knows the truth, but the gurus just don’t say it. The reason - IT CUTS INTO THE SALES OF THEIR VERY EXPENSIVE COURSES, SEMINARS, AND BOOTCAMPS.
I also don’t like the upselling. If the gurus have something useful to say, then why not say it in the first bootcamp. Most of the gurus are experts at up-selling newbies into their next level, promising that at each level you will be given the “secret” to getting rich. The only secret is that getting rich at anything requires a LOT of work and is not easy.
As a Realtor, let me chip in and mention that it’s still a newbie move. If my clients wanted to back out, it’s quite simple to use the mortgage contingency and get turned down for the mortgage. The only requirement is that you have to apply for a mortgage and be turned down, there’s no requirement for you to apply somewhere else and get turned down there.
Then it makes it a very straight forward deal. Just try and keep things simple. Also not doing a full inspection and trying to tie up a property doesn’t sound like a very ethical move. We have one investor in town who has done all sorts of slimey moves. He currently walks around with a limp (word is that it was from a former business partner) and carries a gun. I think his latest project is about to crash as everyone knows his rep and no one is buying in his latest building.
Nothing wrong with making money, but do it ethically.
It happens in all re all over where there is a need to get out during the option period which is what it is for you know designed for. We looking at a property walking through yes I will know if I want it or not . But till a complete inspection you do not know of anything hidden or surprises that will cost more and not in your numbers and need to renegociate or get out during the option period. I am not for just getting to the option and not have already seen it or my GC and have an idea if it can work. You good deals you need to move fast or someone else will be you to it. I am not unethical or like the ones who are. In the last few months I have missed on 4 houses by not getting the offers/to the option period faster. Yes look through (walk) the house offer, option time, all inspection and so on and buy or not. Everything, inspection, apprasials and so on goes on during the option or at least in the dfw texas and northern ca areas. Mostly a 10 day in texas and 17 in northern ca for the option periods. It is all normal for any deals not to go through after the option. I am sure yall have not made it through some options. Just happens at times. I think there is a missunderstanding. I have been around re too long to be unethical. There is a investors club here in northern ca that says and teaches using escape clauses in contracts as well. Has around 350 memebers and have talked to many and has used forms of them like I said before for years. I am not saying use all of them on all deals silly really. All re contract already have an inspection clause to escape with and you do not need a reason to back out during the option. Can be just because. Thanks again all info is great. We all can learn no matter how long doing investing. There are different ways and rules of it for sure in flipping or landlording.
I have heard and a lot of people do not like the so called gurus. Dumb term really. I am not one. I have had a great experince with it and great support from them as well. Most who have used them get discouraged and stop before succeeding. We have learned more usefull info and a short time that I believe is great. Without the training it would be years learning the same training I got in the last months to include training phone calls and so on before even considering doing any deals. I do have a lot more to learn of course no one knows it all. It is pretty shallow of people who judge not knowing who they are jugding really. Robert Allen has been great for us, a positive experince. They have told us the good and the bad and the amount of very hard work it takes from us. Keep the info coming and thanks again to all.