House under contract, now what?

Perhaps you can get a Hard Money loan. Fix the place up and get a refi at 80% of ARV and rent the place out or list it and retail the place.

Michael

Find and put homes under contract that are homes that your buyers are wanting. You can find as Michael says, a hard money loan, or put up bandit signs and try to sell it. Hopefully you already have some buyers that are looking, but sounds like they don't want that particular home if I've understood you right. Did you put contigencies in your contract? There are many ways to get out of the contract, but best to not have to do that.

Knowing all of that... Why would you put it under contract???? You MUST be able to see the back door before you open the front ! Other words... be able to get out of a contract before you enter one. I would propose your question to the investor that advised you to go after it. No one will be able to help you unless they read your contract. I would market the property hard... You would be surprised to know what cash others have.

DG

I read your bio and see you have some experience. Not sure why you have this house under contract? Yes, Market hard, and talk to all your contacts; you should be able to do something with it.

What is the underlying financing?
Is he current on the payments?
What is the house worth now?
How much work does it need?
What would the ARV be?
Is it in rent condition or does it need work to be rentable?
What will it rent for?
Why is the seller willing to sell for what it's worth, what is his motivation to sell?

One thing is for sure, if you wait on the perfect deal and are to afraid to take action yourself, you will not have any chance of making money. So it is a good thing you did what you did, it might not work out but you are one step closer. Soon, you will be posting that you DID close a deal. This one could still work out. Better to take action than to be a full time blog poster!

Michael

Hey Gina, like what Michael said try to get a hard money loan or private money loan depending on what's available to you. It also sounds like you may have put it under contract for a little bit higher price than what it should be. Worst case scenario, move on to the next and get a better deal

Good luck.

Thanks for all of the advice from everyone. Long story short, I went against my own judgement and put the house under contract. But I only blame myself, and I have learned a lot, about myself as well. I do have an exit, although I would like to make it work. I believe I will try for a hard money loan and get a renter in there right away, or a rent to own. I called a few mortgage brokers to see exactly what criteria they ask for from people, so I don't send them people who don't stand a chance getting a loan in a few years.

I realized I really want to be a buy, fix and flip investor, so now I just have to work on getting the funds to do that...
Thanks again!

Gina

If the price is too high for cash buyers, it's probably too high for a hard money lender also. Typically HML don't make buy and hold loans. If the seller isn't open to a lease option, he probably wouldn't do a subject 2 either. As a last resort, you might try and see if he would sell it to you on a wrap. Hard to come up with a solution without knowing his motivation to sell. If he isn't open to any of those solutions and is looking for a traditional sale, chances are he is not very motivated at this time.

Is that some of the teachings we've been taught in real estate that have worked in the past don't seem to be working in certain markets, if not all markets, thanks to supply & demand. We have to think outside the box & come up with plan B if plan A won't work. Are you past your inspection period?

Gina, I've heard of this strategy before but I personally haven't used it.
By assigning the Purchase and Sale Agreement on a Subject to the existing loan for a fee would put you in the bird dog seat and a good deal for the investor who told you to lock it up in the first place. But if your seller did not agree to it I'm assuming you locked it on a Cash Purchase only with not terms.

If this is so, then by knowing your recent "Sold" comparables in the area and the repairs needed you would know if this is a deal for your buyers or not, before locking it on contract and waisting time. Sometimes when you let go of a deal it may come back to you with a more motivated seller willing to do what you negotiated the first time! Good Luck and Happy Hunting

Ha ha! You are absolutely right! I should put myself in the bird dog seat to shoot it back to the bad advice investor. One of my contingencies is that I find a buyer to assign the contract to. The seller might have been open to some other things, but after she talked to a lawyer who doesn't really know her motivation, or the market, she's closed to everything except the existing contract. That being said, maybe I will hear from her again some day soon...

Gina

Hey Gina, it's not that the property sale price is too much for your buyers, you are marketing to the wrong buyers then. You need to find new buyers who don't mind buying expensive properties. Or you can be marketing your deal too high in price.

to buy/fix/flip and split profits

Ok, not ideal, but not horrible. On the 15th, my contract with the seller expired. I called her and asked if she had a few minutes. I explained how I would like to keep my word that I would buy her house, but my local bank won't give me a loan until I have a renter in there for 6 months. She actually had an "AHA" moment, and agreed to let me get a tenant in her property. I won't be able to collect more than her monthly payments, about $1050/month. But in reality, I can purchase it in 2 months with the bank, and my PITI will be around $550/month. All in, I'll have $200/month cash flow. I can do some light rehab and get $150 more per month.

I know this is definitely not the "ideal" thing to do, but I feel like a million bucks that I didn't make a bad name for myself with the seller. The cool thing is, I know the seller is happy, and so am I. Woo Hoo!

Way to stick with it and make it work. Just think about everything that you learned on this deal even if it wasn't "ideal".

Bruce

You did stick with it and make it work. Congrats! YOu also learned in the process. Sweet!

What a way to stick with it!! You really deserve to feel like a million bucks but more than feeling like it you deserve a million bucks and by the looks of it, you will have that too- soon. I'm very happy for you.
Keep the momentum going!
On to the next one!
-The best for you,
-Angel.