After 2+ months of learning about REI in abandoned property, I finally got the courage to call a skiptrace company and actually found the owner of a vacant property I’ve been looking at in Chicago, IL. But now the delima of fear and uncertainty is back. I have three main question that needs to be answered b/4 I proceed:
When writing the letter to the owner, what do I say? Do I mention I’m a REI and I am interested in buying his property or I am just interested in purchasing his property? He is a 65 year old man who owns an abandoned property, an out of state property, and the one he is living in. I want to have my letter sound professional and for him to know that I am serious and for him to QUICKLY call me.
When making a purchase contract, what are the most important clauses that I need to have to protect me incase the deal isn’t profitable or doable for me? I know that I need to have “and/or assigns”, but what else should be there so I will be protected and that is legal. I live in Chicago, IL so there maybe some clauses that I cannot use.
How do I do owner’s financing? How can I tell the owner to pay for the home, whiile I am fixing it up or wholesaling? How do I put that on my contract?
First things first, call the owner, don’t waste time on trying to mail him a letter. Just ask him if he’s interested in selling his property. If he has no interest, then move on, maybe follow-up monthly.
Assuming he does want to sell, then he’ll need to be motivated to give you a good price. If he’s motivated you may be able to talk owner financing, but if he’s not, you can probably forget it.
As far as a contract, you want to have inspection contingency and financing contingency. That gives you two outs if something comes up or you can’t get financing.
I agree with REI Auctions in trying to call if possible. It saves a lot of time.
Just say that you rehab properties - saw his that looked like it had been vacant for some years, and would he be interested in selling it to someone who wanted to fix it up? If so, get information about it, how long it had been vacant, why it had been vacant for so long, are there any mortgages or leins against the property, then finally, what would he sell it for if you gave him cash for it?
You only need four real contingencies:
Subject to buyer’s approval of a detailed home inspection to be completed within 10 (or whatever) days.
Subject to buyer’s approval of the appraisal.
Subject to buyer’s approval of the title search.
Should buyer not perform on this agreement, the seller’s recourse will only be buyer’s earnest money deposit.