I'm freaking out!!

Hey that's awesome. i used to live on Long Island Massapeua Park to be exact. I live in CT now. I started in march, I made my first call to a message left on my email from a Craigslist add today. Same thing they own the home out right and want to move closer to the spouses job. They're asking a bit much but i guess they always do at first. I just will have to educate them that there house isn't worth that much and hopefully get them to drop it enough for me to do an assignment on it.
I think what your looking for is a non circumvent agreement or something like that. Good luck

Great job in finding a motivated seller. That is what we are looking for as investors. I would find out what the seller needs when they sell the home. Are they going to get equity to buy their next property with that money?
Are they willing to seller finance?
It is nice to see what you have to work with,then you can formulate a plan to help them sell their home. Now your going to be the buyer on this, so you need to put a purchase contract together.

You can use the contract dean has online, or you can use the state approved contract as well. Just make sure you understand the inspection clauses and what you need to do to withdraw from the contract if you need to.

Great job again, and make it happen

Mike Kessler
Advisor

I used to work at the Saturn dealer in Massapequa on Montauk Hwy. World is too small Do you know if that agreement is one I sign with the owner or the buyer? I looked in the forms section of the site here but didn't see one. I'll just have to look through my books to see if I can find it. Thanks again

I appreciate the input, I'm going to call my coach tomorrow to make sure I get all the right paperwork lined up.

You just need to lock up the property with a purchase contract, You can offer other terms as well such as Land contract or Lease option. Just be sure to sign as: your name and or assigns. This will allow you to assign the contract (for a fee) to another party.
Good luck and Success to all!
John W

Im sure you will do just fine. Best of luck with your deal!

It gets so much more easy. Just keep drawing them in and talking to them. Congratulations!

Just keep drawing them in and talking to the sellers; it gets easier with experience. Congratulations!

I've spoken with tons of buyers but not one seller, I've partnered with someone on a short sale but they did all the talking. This will be my first (all me) seller, I'm sure I'll be fine once I start the conversation but the before is going to drive me nuts

You have already talked to one seller now though right? I think the buyers are harder for me. I mean true buyers; I am getting a lot of wholesalers who claim to be buyers, but then I find they are really wholesalers. I just wish they be honest up front. I mean we can network, but they tell me they are looking for properties and then give me no criteria, and then I come to find out they are just wholesaling. ARghh!

There is really not that much to say to the seller.

At first talk about family(the sellers)and friends, then there interests, then work, then the property. Something along those lines. Do a lot of listening and very little talking.

You may ask what they want to get out of the place. You already know why they are selling. (trust but verify free and clear)

Then you say: I need to look at your property, determine what rehab/remodel is needed if any. I then need to find out what I can sell it for. After I run some numbers I will call you back and make an offer.
1. A cash offer
2. An owner finance offer.

Nothing really personal or emotional about it. Either the numbers work or they do not.

Good Luck!

Michael Mangham
Mentoring/Team Building Nationwide.
MD Home Acquisitions LLC

As always great advice, I'll post all the info as soon as I have it.

remember to use the forms....

Heres 2 you'll need when talking with buyers/sellers
http://www.deangraziosi.com/leadsheet for sellers

http://www.deangraziosi.com/real-estate-forums/everything-else/96548/inv... for buyers

Mike, much appreciated & needed

great job! hope all goes well for you. i know you can do it.

Here is the standard DG form, which you probably have, and I wasn't sure if it was in one of Mike's links:
http://www.deangraziosi.com/documents/Agreement-to-Purchase.pdf

Other than that, what I do with sellers is LISTEN. The one I did not see on the posts above was ask the seller what they feel needs to be repaired (this is DG textbook), when you do the seller will often say this or that and it will cost X amount to repair-- what they have done is given you reductions to their asking price!

To answer your question [again]--
Q: "what form do I use to "Lock up" the property so that I can present it to my buyers and not have someone snap it up on me?"
A: Write up the Purchase Agreement (Don't sweat the stuff Escrow will tidy-up or anything you can use an addendum to correct or clarify), get the Seller's signature and give them $1 (as a formality) to seal the deal. Just do it like you were buying a bike, bed or car from a garage sale and you want them to hold it

Let us know how it goes!

-Tina

Thanks for the info, I spoke with the seller briefly today. We had a bad connection so I got the address and basic info on the property so that I could do some comps and I found her listing online.

I feel that she's over improved the property for the area that she's in while at the same time not improving the right things. She added a family room by closing off the 2 car garage, and made a mother in law sweet that just needs a permit to make it legal. The kitchen is dated as well as the bathrooms and all of the carpeting needs to be replaced w/new or w/hardwood. That's what I'm going with for now but I will be looking at the actual property in a couple of days.

She says she's had a lot of traffic but no offers, listed for $399K but the area doesn't support that number. From my comps (not accounting for the apartment, which isn't in the listing) just based on bed & bath & square footage it's about $280K FMV.

I'll post more when I know thanks all.

Jean,

If the asking price is $399k and you have calculated an ARV (FMV) of $280k.....is there any need to discuss this one further? And then you say she has done some modifications without permits......yikes. I don't know that this property will qualify for conventional financing anytime soon until the permit issue is resolved.

What Exit Strategies are you anticipating with this particular lead? Are you hoping to Wholesale this property, buy/fix/flip, or hold this for long-term Landlording? Will this property CF if rented? Does the mother-in-law apartment have its own entrance and/or utilities (i.e. electric meter, etc.??)

Many issues with this potential transaction. I won't say run away, but I do think it needs a good deal more information and consideration before I'd put it under contract (and that is IF the seller would come way the heck down from their asking price of $399k to somewhere below the current FMV - Repairs/holding costs/closing fees/wholesale fee, etc.

Wishing you continued success.

--LonestarGumby

For the updates she says she has the COO but in Suffolk County regardless of the COO you need a permit for the apartment to be legal if you want to rent it out (she had a family member in it), it usually runs about $500 for the year depending on the location. As far as the price if she takes a lower price it could still be a deal, she has no mortgage and 6 months to get rid of it. Once I see it and discuss a number with her, she may see the need for lowering the price. If not on to the next one, but what I'm really liking about this is 1) I'm talking with my first official seller 2)maybe instead of wholesaling it, it could be a lease option. It's all a learning curve right now

Thanks for the post & good wishes Let's ALL get some!!

Great job on your first call!

Keep up the good work!

Jean,

Okay, I'll bite......COO = certificate of occupancy?? That really stumped me when I first read your post and I could not think of a viable definition until driving home from another RE event. If it is not certificate of occupancy, then you still have me stumped.

Congrats on your first call and talking to a potentially motivated seller. It would seem that you are thinking correctly in regards to the renovations that she has had done to the structure. Personally I'm not sure if converting a garage to a family room is a winning change, especially if all (or most) of the other homes in the neighborhood still have garages. Are garage conversions something of a trend in Suffolk? Updating (remodeling) of the kitchen and baths are what seem to impress buyers here in Texas and in the NE. So it would seem that your inclination of her converting a garage and building some sort of mother-in-law apt. may be misplaced priorities. This is a good thing for you though, as a Rehab-buyer on your buyer's list will see this as an opportunity to make some money on the deal.

I think the numbers need to be looked at again. With an asking price of $399,000 and your calculation (or comps) with an ARV (after repair value) of $280,000, something is way off there. Do you have access to DG's PropTrend software for analyzing properties?

Keep at it Jean as you are taking action and talking to motivated sellers. The journey begins with small steps. Just remember that we (you) make money WHEN WE BUY real estate; we get paid when we sell. If we do not buy it right and low enough; then that can really hurt our chances of getting paid down the road.

To your continued success.

--Walter

Sorry yes certificate of occupancy. I agree with you on the garage change, especially since the house has no basement. Kitchens & baths are where she should have spent her money, like you say though it may be good for one of my rehab buyers or even one of my landlord buyers.

I wish I had proptrend but it's currently out of my budget I'm looking at a house on saturday with my agent, I'm going to ask her to look at my comps to make sure I got it right.

Thanks again Walter, I appreciate your input.

I just found out that an REO property that I have been following has finally made it to the MLS. And the asking price is very very low.

Now to be fair, this property has had some fire damage so they have certainly priced it right. However it is priced BELOW the lot value for the property, and I am going to lock it up on a CASH contract first thing in the morning at the bank's full asking price. I am certain that I can sell this place to my re-hab buyers and make a little bit in the middle.

I am so excited that I may even lock this one up without any contingencies; just because I know I can flip it to one of my buyers. That is possibly a mistake (i.e. to not include contingencies), but I HAVE GOT TO TAKE ACTION and don't want to let this one get away. Keep your fingers crossed for me!

-- Walter

There should be a standard inspection period that will give you time to find s buyer without putting your earnest money in jeopardy. NEVER add any other weasel contingency to an offer on an REO. A legitimate inspection period is all you need. Anything else will be rejected by the bank in most cases anyway!

Good Luck,
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Good for you Walter

Michael,

You are so right. I put the offer in this morning for their full asking price (which is below lot value) and did not list any weasel contingencies. They (the RE Agent) included a 10 day inspection period with my offer.

They asked for proof of funds, but I will be buying this with my HELOC line of credit *IF* the offer is accepted. That kind of pushed me just a little off of my game, but I quickly recovered & the Broker accepted my explanation (and earnest money check).

He said that he expects multiple offers and wanted me to increase my offer; I declined saying we (my "partner" and I) would re-evaluate the numbers and resubmit *IF* that became the situation. All in all we had a very good conversation for about an hour + and I have added him to my team for other bank owner REO as well. Told him what I was looking for, and that after this closes we will look at some others too.

Jean; thanks for your words of encouragement. Good luck today in seeing that house we have been discussing. Looking forward to hearing good news from you also!!

--Walter

So here's the scoop on the property:

3BR/1Bth upstairs, typical ranch layout. Living room w/fireplace, kitchen, dining room, den?, deck off of the dining room w/above ground pool. Basement is poorly finished has 1br/1bth, has small storage area for the homeowner in basement.

The owner is asking $399K I've done my comps & had them checked by my realtor we come up with an FMV of $280K (already $119K over) the house is screaming for an interior facelift, both kitchens need to be done, both bathrooms need to be done, needs all new carpeting upstairs and down, needs firerated doors to make it a legal apartment, the outside entrance to the apartment needs to be done, the basement stairs need to be fixed (felt like I was taking my life in my hands walking down) and the entire house has a horrible smell not sure if it's in the carpet or what.

The owner removed the garage and created that den/room to put her birds in (she breeds southamerican parrots in the house) also there's what could be a small pool house attached to the deck but again full of birds. So her thinking is she spent about $120K to "upgrade" her house, but it's of no value to anyone but her.

Her answer to my offer was no, although she did understand why my number was so low. She still has 6 months to get rid of the property, maybe she'll change her mind if she still can't sell it quickly enough. She says there have been close to 100 people look at it but not one offer, I'm going to reach out to her again in a month and see where she is at that time. Thanks to all for your input.

Hey Walter, how about your house? Anything come from it?

What part of L.I. is it located in? I have a relative that flips property out there.
If she is that over priced she wont sell it unless she finds a clueless buyer. Just let her know if she changes her mind you are available. If you can get her to hold the mortgage for say 240k ( if its worth 289k as is)@ 5% (just off the top of my head since I dont know what the repairs would cost). You can go to the calculator and tools section dean has here and can print up the sheets afterwards to show her what she would make back with the interest over time. Fiddle around with the numbers on the calculater with the amort in it.

Good luck!
Never EVER give up!!
Richie

I'm in Suffolk County, Patchogue to be exact. The house is located in East Yaphank, I'll definitely be following up with her.