OfflineOkay, so it's been a while since my brother and I got the books. We're taking a much harder approach now and looking forward to making our first deal.
It seems that the best/most sound advice is to create a buyers list first, although I've seen quite a few success stories of people who locked up a deal and THEN found a buyer. I'd hate to tie something up and have it sit without being able to close on it, but I guess that's part of the game!
What I've got going right now... made a posting on Craigslist to look for buyers (it's only been a day, but no leads yet). I've also heard that "For Rent" ads are a good place to find buyers, since a surprising number of these folks are also investors that may be looking for more property, or needing to sell property. I'm going to start a list this Sunday (from the want ads) and start the cold calls.
This spurred an idea (Wonder if anyone else has tried this?)... Thinking as a landlord with multiple properties, I would probably want to use a management company to handle the day-to-day stuff with renters, maintenance, etc. So, in addition to looking through want ads for "For Rent" possibilities, I'm also going to start contacting the local property management companies to see if they know if any of their clients (landlords) have multiple properties, frequently add properties, or simply if any of them are investors looking to buy.
TONS of properties for sale everywhere.... just need the buyers!
We'll see....
Chris 4/18/11
Quotes about me from other users:
"...high and mighty ... I have to bring the hammer down on them"
- My response: "The view from OUTSIDE THE BOX is a lot better than from INSIDE."
On Friday, I threw up (er... lol!) a couple ads on craigslist in hopes of snagging some buyers. I got one response, albeit somewhat vague ("show me some listings, thanks"), and am waiting on a reply for whatever criteria he is interested in. At least it's a start!
I also *just* got off the phone with an Real Estate attorney in my area (Daytona Beach/Volusia County, Florida), and found out 2 answers to some questions I see asked all the time in the forums:
1) ARE "ASSIGNMENTS" LEGAL IN FLORIDA (MY STATE)? - the answer is YES THEY ARE, as long as they aren't short sales. Banks will not allow an assignment contract for a short sale in Florida. Otherwise, they are GOOD TO GO! So, there's your answer!
2) IS THERE AN OFFICIAL PURCHASE/SALE CONTRACT THAT MUST BE USED (STATE REQUIRED, ETC.) IN FLORIDA? - The answer is NO. Although an official/standard form is used, it is not required. So, a "home-drawn" contract is perfectly legal as long as it contains the required wording (boiler-plate), and, of course, it's always best to have an attorney review any non-standard contracts before they are used or signed.
So, this week is going to be spent on researching homes and market values to find my first deal, which I can hopefully sell to my buyer I found on Craigslist.
I'm about to pump out emails to Realtors in the area as well, asking for a list of cash buyers from the last 90 days - I heard that is another excellent way of finding cash buyers (Non owner occupied) properties. I might also be able to do it the hard way by searching the on-line court documents, but that's a slow process.
At any rate, I see progress!!!!
Rock on,
Chris
Quotes about me from other users:
"...high and mighty ... I have to bring the hammer down on them"
- My response: "The view from OUTSIDE THE BOX is a lot better than from INSIDE."
Thanks for the well wishes! My plan for right now is to do a few assignments. I'm going to aim for about $10k on each. Once I can get these rolling, I will probably begin to focus on some lease options.
One of the Realtor websites shows some positive market trends for the Daytona Beach area (I'm not sure of actual numbers, the site only shows percentage increased, and I don't know if "Daytona Beach" would include all the area communities - pretty much all of Eastern Volusia County is generally considered "Daytona", even though there are many other (smaller) cities in the area). Here is a cut-n-paste from the site:
Over the past 11 months (Dec 2008 through November 2009) Single Family Home sales in Daytona Beach, FL have increased substantially over the previous year. Information gathered from Daytona MLS.
December 2008 Home Sales In Daytona Beach increased +13% over 2007.
January 2009 Home sales In Daytona Beach increased +35% over 2008.
February 2009 Home sales in Daytona Beach increased +45% over 2008.
March 2009 Home sales in Daytona Beach increased +31% over 2008.
April 2009 Home sales in Daytona Beach increased +10% over 2008.
May 2009 Home sales in Daytona Beach increased +17% over 2008.
June 2009 Home sales in Daytona Beach increased +23% over 2008.
July 2009 Home sales in Daytona Beach increased +23% over 2008.
August 2009 Home sales in Daytona Beach increased +10% over 2008.
September 2009 Home sales in Daytona Beach increased +40% over 2008.
October 2009 Home sales in Daytona Beach increased +54% over 2008.
November 2009 Home sales in Daytona Beach increased +94% over 2008.
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So, since home sales appear to be starting on the upswing, I know that business growth in the area is pretty much stagnant, so I don't think prices will take off anytime too soon. Based on that analysis, assignments look pretty stable for the moment, and then possibly some lease-options (lots of renters in the area which means lots of investors looking for rental properties!). I figure lease-options will be good to turn some renters into homeowners, and at the same time getting more deals for investors... and the cycle continues.
Wow... am I turning into a "Real Estate Professional"? LOL!
Chris
Quotes about me from other users:
"...high and mighty ... I have to bring the hammer down on them"
- My response: "The view from OUTSIDE THE BOX is a lot better than from INSIDE."
If there is one thing I learned in my career in Emergency Management, it was my three favorite words: Document, Document, Document! I have become a fanatic (lunatic?) when it comes to making sure that every 'i' is dotted and 't' is crossed - ESPECIALLY when it comes to legal documents/contracts. So, over the last several days, I carefully went through the sections in Deans book about IEE's and Assignments to get all the paperwork together.
I decided on the four following contracts to use: 1) Investor Disclosure & Seller Acknowledgement (pretty much a cut-n-paste of what is in the book and available here on the site). 2) "Option to Purchase Real Estate" contract. Here, I decided to create a separate contract for the option, instead of including the wording in my purchase contract for the simple reason that I want to keep the purchase contract as close as possible to the standard purchase contract in Florida - which doesn't include any provisions or wordings for purchase options. By keeping the purchase contract as close to the standard contract as possible, I think sellers (and buyers) will be more comfortable with it, if not more familiar with it. The only change I made to the option contract was that I didn't specify the option would be "in a valuable exchange" (meaning I don't have to fork out any money for the option). Once I get a few under my belt, I may change that, but I don't have spare change to risk right now. 3) The "Real Estate Purchase Contract". This is basically a cut-n-paste from the "authorized" contract in Florida. I didn't change any wording, although I'm considering dropping a statement regarding agent fees/commissions to avoid complications (still have to check with an attorney on that one). Other than that, it's the standard contract with all the boiler-plate. 4) The "Discharge of Agreement Statement". I choose to use this as well, as backup to the Investor Disclosure and leaving a solid paper-trail to facilitate the closing process.
In my experience, if you didn't document it, it didn't happen. In other words, document, document, document!
I posted a question in the forums regarding the IEE process and how to properly document where my profit comes from and fits in to the big picture. That should finalize my paperwork.
I've found about a dozen properties that I'll start focusing on, and have already got a buyer (a re-haber/contractor). I haven't moved on my other plans for more buyers (yet), as I have been focusing on the paperwork, but it's all starting to come together.
Until next time!
Chris
Quotes about me from other users:
"...high and mighty ... I have to bring the hammer down on them"
- My response: "The view from OUTSIDE THE BOX is a lot better than from INSIDE."
(this may be a bit of a duplicate from a post in the forums, but I just HAVE to have this in my blog!)
OK... when my brother and I first got Dean's books just over a year ago, I was doing all sorts of research and digging around to see what I could see. I stumbled upon an "ad" for a 46 unit apartment building in Detroit for a ridiculously low price (I don't remember specifically how much).
Commercial properties are (still) a bit out of my league as a beginner, so I really wasn't all that interested in structuring a "real" deal. Instead, I wanted to see if I could "practice" the research, pretending to be a serious commercial property investor. The seller stated a few "buzz" words: "needs work", "positive cash-flow", "willing to trade for property in Florida". Property in Florida!! (That's where I live and where I am starting my investing career).
I tracked down the owner/seller, which is a holding corporation. I don't even really know what this company does - I was just focused on the property. The seller told me that the building is in the middle of renovation and needs quite a bit of work to complete before the building can be occupied again. But, he mentioned that even with 50% occupancy, cash-flow was several thousand a month. He then went on to say that he wasn't able to purchase any properties at the moment, but if I helped him sell the apartment building, he would even send me a commission and use me to purchase a home in Florida. Hooah!
Unfortunately, I didn't really know what I was doing, and I never did find a buyer. Needless to say, I didn't earn a commission and I haven't heard from him since.
My life took a strange turn for the worse and Dean - along with all the real estate knowledge - went on the bookshelf to collect dust. Just in these past few weeks, my brother and I are back at it - with a vengence!
Wouldn't you know it - I get an email from the holding company about a month ago. Apparently, my email address was added to a distribution list at his end. He is now advertising the sale of a complete city block in an upscale suburb of Detroit. The property consists of a couple commercial buildings (one occupied, one being marketed towards fast-food restaurants), fenced parking, and a total of five individual addresses (parcels), priced below market at $225k.
Again, I'm just a beginner, so a commercial deal is quite a ways out of my comfort zone, not to mention it's about 1,500 miles away. So, I wasn't thinking of working a deal (also considering how it went the first time!) and simply posted an ad on craigslist with the same info and pictures.
Lo-and-behold, in this morning's email, I GOT A RESPONSE! The response was short and sweet: "I am VERY interested and I am an all CASH buyer." So, emails have been sent in both directions, and I'm crossing my fingers that I can connect these two people up.
I'm also "hoping" for some sort of commission/fee or whatever (I reminded the seller what he told me a year ago!), but I'm not working an "official" deal with this one - more of a "favor". Because, I also asked the buyer if she was interested in any residential properties - especially here in Florida....you can guess the rest: I now have another cash-buyer/investor on my buyers list which, at this stage, is potentially worth WAY more than a few points on a commission. ("Feel free to pass my contact info around to anyone you know who may be looking....")
Wouldn't it be great: I connect buyer and seller, without signing a single piece of paper. $225k sells, seller throws 3% my direction ($6,750) for all of ten minutes of work, PLUS a new cash buyer for my own future deals!
Cha-Ching!
(I'll let you know how it all works out....)
Rock on!
Chris
Quotes about me from other users:
"...high and mighty ... I have to bring the hammer down on them"
- My response: "The view from OUTSIDE THE BOX is a lot better than from INSIDE."