OfflineI hope your well as you read this. I first want to thank you guys all of you for constant encouragement and success stories on this site. Its great to see the success stories, It gives me a want to get'em excitement.
Im still trying to get my first wholesale deal done, I have about 15buyers and a bunch of we buy houses websites. So far the only home owner deals Ive come across have been owners that are to upside down to make any kind of worth while wholesale deal with me. I must need to market better and I'll be working on that. Up until now I've been staying away from foreclosures because 1) I've been told I need more experience for those and 2) because I've heard there hard because the banks are strict. My realtor has sent me tons of foreclosures quite a few of which have potential.
I was wondering what do you guys think about that?
If you think I should go for it, How should I approach it?
Can you guys give me a few techniques on how to flip a foreclosure. One Ive heard is make the offer under a **** llc and then create the llc if the offer is accepted then sell the llc to the buyer. Has anyone done this and is the **** llc the exit or do you still have another exit strategy along with.
Any and all advise would be greatly appreciated,
Thanks
You stated that the deals you are seeing are upside down. Look at the numbers and think outside the box here. House is worth 200k but he owes the bank 220k and is not behind in payment of 1,400 per month. Take over the loan, run a CL add stating owner carry 10k down take over payments of 1,600 per month with a balance of 225k. You make money in the front, middle and at the end (three years to fix credit and get a new loan). I have done them they work!!!!!!
Not having a goal is worse than not setting one..
http://www.deangraziosi.com/real-estate-forums/investing-journals/92139/... -
http://www.deansmedia.com/play.php?vid=266
Keb 64- you do have a great entry and exit strategy, but would you mind explaining, by the owner carry 10k down and 1,600 a month, would this be the new owner/buyer of the home? If you would not mind further explaining the making money in the front, middle, and end, I would appreciate it.
The only thing you have to be careful with here, Keith, is at the end of the time period the house will have to appraise high enough to be able to get the loan. And also entering into the equation is the amount of down payment the bank will require. It can be structured so that the $10K down can apply toward the down pmt but they may need additional funds to qualify.
You have to set EVERYONE up for a win.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
You are right in a way. I normally just get the money up front and turn it over to a servicing company for $12 per month and get the difference mail to me each month. The house should go up in the next three years but if not just get it closed and out of the old owners name and move on to the next one.
To answer the other side of this: 10k down (your pocket bank) 1,600 per month minus his payment of 1,400 and the $12 = your month cashflow...5k at the end if all goes well...
Not having a goal is worse than not setting one..
http://www.deangraziosi.com/real-estate-forums/investing-journals/92139/... -
http://www.deansmedia.com/play.php?vid=266
To answer the other side of this: 10k down (your pocket bank) 1,600 per month minus his payment of 1,400 and the $12 = your month cashflow...5k at the end if all goes well...
This is actually a L/O. The point I am making here is that if the house does not appraise high enough at the end of the time period, you can NOT get it closed and out of the old owner's name and the Tenant/Buyer runs the risk of having to move out and loses his money that he put down.
This is why you have to be very careful when you are doing the upside down houses. I have actually done some that are upside down myself, but you have to make sure that you have taken into account a long enough time period for recovery and enough equity to build up to make the numbers work out so that the Tenant/Buyer doesn't lose. I don't think three years would be enough time.
This is where there have been some problems on some of the deals posted lately.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Thats what I enjoy about this site it is so helpfull and it's always a learning experience,
Ive heard of deals like that, but should i try something like that for a first deal?? Can I have the tenant buyers on my buyers list for a home?? I have to admit Im a little intimidated also as you can see a deal can go bad if there is something you dont know before hand.
Should I just keep marketing until I find someone I can do a deal with? Or should I take a shot at making offers on foreclosures or bank owned? Or should I not try the foreclosure route as a novice.
Any thoughts??
Thanks again guys
Karen,
I think you have valid points for sure. The house will only sell for what it appraises for. You can sell on your contract for whatever you what. Does not mean you will get that price. I think that even if you are at O equity and not upside down that you need at least 5 years on the L/O. I think a tenant/ buyer that takes on an upside down deal really has not been FULLY disclosed to OR been pre qualified by your broker. I am with you!
Keith,
I don't believe in speculating on RE appreciation. I base my offers and the deals I work based on what the property is worth today. I do not do anything other than refer upside down properties to my short sale team. Now that is just me. To each there own as long as it is a win/win for every one I guess. I just don't like to do deals based on numbers that may be here or there in a few years. My deals must have equity up front.
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
michaelmangham
That makes a lot of sense in fact the all do. I think my biggest problem is I'm newbies jeebies. lol
I'm gonna to start marketing for tenant buyers, I dont have a broker yet. So far Ive spoken to a couple and they have been all nay sayers. Thats something I have to work on but for now to start getting offers out there, I have 2 strategies in mind for dealing with foreclosures. Either the double closing, but my question there is to make an low offer to a bank and have them accept they want to hear cash buyer. If I'm supposedly a cash buyer what kind of exit clause should I use here?? I obviously cant use pending financing. I dont think pending my due diligence is gonna be accepted?
What has worked for you guys??
The other is making an offer using a **** llc and then once accepted form the llc and sell it to my buyer for the right to buy the property?
Which do you guys think will be easier for a novice to take on.
Thanks, Dave