OfflineI am a new REI, and based on the techniques Dean teaches I have been researching properties for three weeks now.
Here's my question:
When I approach a home owner, who may be in distress and is agreeable to getting the property off their hands, what are the initial steps to getting the property "locked up" under contract.
I am thinking of a buy and hold stragegy here.
As an initial step, should I consider a promissory note as the tool to use,
or should I bring in a realator on my end and proceed to with a regular sales contract ?
Any additional information on promissory notes, ways to lock up a property to purchase, would be much appreciated .
Thank's
~NN
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when you "LOCK UP" a property, you wouldn't use a promissory note, rather a AGREEMENT TO PURCHASE or PURCHASE AGREEMENT would do the trick, remember you must write and or/assigns, where the buyers field is, if you plan on doing a RE-ASSIGN, SULLY.
YOUR HERO, SULLY
but perhaps we should know if they want to purchase the property using conventional means or cash or what?
Also when they say they want to buy and hold via locking it up. What are the specifics of the deal. What kind of agreement have you worked out with the owner? Have you talked t the lender/rep or what?
Anita
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"FAILURE IS NOT AN OPTION"
yeah, if he is planning on doing a buy & hold strategy then financing IS going to play a major part, see what the seller is open to: seller financing, lease option, conventional like ant said,etc. SULLY.
YOUR HERO, SULLY
Great info, thank you ALL !
Two questions on the topic of beginning with contracts...
1) Have any of you used a real estate agency in your deals on a FSBO ?
I suppose an agent could help facilitate with the contracts / assignments - When, if at all, do you prefer to use a real estate agent ?
Of course they would have to be paid, but thats where some creative ideas could work as well.
2) This question is on buyer liability after locking up a property,
for example if financing does not work out...
What could / should happen if buyer finds a property, negotiates the right deal with the seller, and put it under contract for a closing in say 60 days...
Sounds great so far, but if BUYER ends up with a financing issue that could not be solved, or did not get enough capitol.
Could the buyer cancel the contract agreement and get out of the deal, or would they be they still be liable ?
Are these terms & conditions typically in "Purchase Agreement" ?
~NN
I prefer to do things myself and only utilize an agent when I absolutely need to. You just use a standard contract or one from Dean's Forms and write your name and/or assigns as the buyer. There is typically a clause in every contract that pertains to 'upon financing' and also 'upon inspection'. These are escape clauses for anyone who is making the offer. Unfortunately these things do happen when getting conventional financing. That's why a lease option works great, they don't need financing right away.
Best of luck!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
how can you make sure a property fits the cycle you are in ?? I know my cycle but does this mean on the pricing and how the deal gets structured??
grandpa
the mrk in fla. is at the point where you can`t find investors in the papers anymore,so i`m looking to concentrate on the 1st time home buyers.the problem there is that you can`t collect an assign fee.I read where someone wrote that their state is like that too,can anyone direct me to that post.
the mrk in fla. is at the point where you can`t find investors in the papers anymore,so i`m looking to concentrate on the 1st time home buyers.the problem there is that you can`t collect an assign fee.I read where someone wrote that their state is like that too,can anyone direct me to that post.
the mrk in fla. is at the point where you can`t find investors in the papers anymore,so i`m looking to concentrate on the 1st time home buyers.the problem there is that you can`t collect an assign fee.I read where someone wrote that their state is like that too,can anyone direct me to that post.
No need to bring in a realtor. That would just up the cost of the deal. I only use a realtor on MLS listed properties ie she does the research and then she gets the commission if the deal closes. For FSBOs... no realtor.
The promissory note would only come into play if you were using that as your earnest money. (You do need SOME kind of "consideration" to make the purchase agreement binding.)
You should always have contingencies in your offers ie "things" that let you get out of the deal "clean" and get your earnest money back.
Two good ones are financing and inspection ie if you CAN'T (not wont but CANT) do the deal because of the bank... you can get out of the deal. Or if the property is not what you expect, then you can also get out.
GL
Mark
A friend of mine, a mentor of sorts, had become a real estate millionaire by making lots of offers on any kind of property. His philosophy was to have several offers in the pipeline, and if more than one in six was accepted, he was offering too much.
He also believed that the time to celebrate a deal was when you bought it, not when you sold it, since buying at a bargain price guaranteed a good profit. Of course a good feel for value is a big help.
He would enjoy, if he were still living, seeing his guidelines reflected in the contents of Dean's books.
I mention these policies in hopes that it may ease the uncertainty of newcomers to REI. The Perfect Property isn't necessary; any property at the right price can be as good as perfect.
cactusbob
I was just reading your threads and was doing my homework searching how to do deals. Thanks for the information on making sure you have escape clauses in the contracts. God Bless
God Bless you all, in Jesus' Name I pray. Nancy as #1 Sunshine*