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Forums » Starting Out » HELP MY FIRST REO FLIP/DOUBLE CLOSE

HELP MY FIRST REO FLIP/DOUBLE CLOSE Subscribe to HELP MY FIRST REO FLIP/DOUBLE CLOSE

9 posts by 4 users

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· Yonkers, New York


Hi Guys,

I have everything set, the agent on my side, funding and everything. I have created a buyer's list and required verification for the cash to close the deal.

But I have a problem, I do not have this property under contract just yet going to make an offer in two days. Everyone wants the address, and I do understand but how do I ensure I do not get cut out of the deal?

Should I make an offer, wait for it to be accepted and sign the contract and then entertain offers? Its a big risk though.

What should I do? Any insight would be greatly appreciated.


Real Estate Investor · California


Tell your investors, your in negotiations with the Seller. Once you both agree on price, they'll be the first ones to know about it and you'll email them with the detailed info. That's why there on your VIP List (aka database list).

Not under any circumstances don't give any info, until you have seller under contract, written not verbal that is. Make sure you give your seller a 48 hour window to accept your offer (e.g. " This Letter of Intent expires 48 hours from the date of this letter", (use offer if not using letter of intent). Remember, you have multiple offers going on at the sametime, not all offers will be accepted. If you do get more than one accepted, at least you have your ready buyers on stand-by.

Also, have the seller pay for your closing costs. Don't forget your contingencies, incase you need to pull out.

Post your results here, as well email for more info.

My 2 cents.


· Yonkers, New York


Raul thanks for your input. I will update you on the progress.


Rehabber · Santa Clarita, California


Also, have the seller pay for your closing costs. Don't forget your contingencies, incase you need to pull out.
Huh . . .
You do realize she is talking about bank owned properties (REO's) don't you? Making offers to banks and asking them to pay your closing costs? Good luck getting that and if you do, good luck getting a good enough price to be able to wholesale it, let alone retail it!

To answer your original question, never give out the address until you do have the contract locked up. You mentioned risk after that. There is no risk assumi=mg you have one contingency to get out in the case of not locating a buyer on your end. Making all cash offers with limited contingencies will get you better pricing, but you must have the buyers lined up prior, that is key.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com



I agree, it's best to get control of the deal first. Make the offer. Once it gets accepted, then you can market it to your buyers.


Real Estate Investor · California


Will,

It all depends on her local market. Asking local investors/realtors what works and what doesn't work in her area. Doing her due diligence. Find out if she's competing with other buyers. If it falls out of escrow, submit an even lower offer. Buyers won't wait around, they'll move on to the next house or be a back up offer. Again, depends on the property (beach front property to the desert) location, location location. Days on MLS, repairs, etc. Or she can move on to the next house, there's plenty of inventory coming down the pipeline. Being in the right place at the right time. If she wants to, she can place multiple offers in different states. As long, she has a phone/internet/fax/google earth maps, etc. .....she can have a virtual reo business going on from the comfort of her home.

Yes, I'm presuming she knows the less contingencies the better chances her offers will be accepted. Like she said, her buyers are lined up.


Rehabber · Santa Clarita, California


Raul,
I understand due diligence and market analysis which is basically what you are posting, but the topic was when and how to market the property (REO) to a buyer's list. We all recommended that it be locked up and she hold an executed PSA in hand before giving out the address, but your response to requesting the bank pay closing costs does not make sense in most markets. I assume she is not investing in Detroit where the bank would offer to pay you to take the home (humorous exageration) and therefore, dealing REO's with intent to wholesale requires getting the very best deal on properties in the very best areas possible, making them attractive to investors to want to pick up. Getting to that will not occur (in most cases) by making offers with bank paying closing costs and/or having several contingencies.

What works:
All Cash, quick close by month's end, one contingency, large EMD's, POF's, and a large and real buyer's list.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com


Real Estate Investor · California


My friend,

She was saying her buyers were asking detailed info where the property was located.
--------------------------------------------------------------------------------------------
Quote, " I have everything set, the agent on my side, funding and everything. I have created a buyer's list and required verification for the cash to close the deal.

But I have a problem, I do not have this property under contract just yet going to make an offer in two days. Everyone wants the address, and I do understand but how do I ensure I do not get cut out of the deal?

Should I make an offer, wait for it to be accepted and sign the contract and then entertain offers?
--------------------------------------------------------------------------------------------
Yes, I concur until she has it under contract, she can flip it or keep it. The location and market is important. Each buyer has different buying criteria (buy/hold, buy/flip, buy/live).
As long she knows, what her buyers are looking for, she'll be ok.

PS. I love this forum, the possibilities are endless!


Rehabber · Santa Clarita, California


Raul, It appears you are arguing a point in which I have already agreed with. I agree and stated so that she nees to lock up the contract first.

I was only pointing out that your statement of "ask bank to pay closing costs" does not usually work so long as you expect to get great discounts, great enough to wholesale. That is all.

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com


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