Quick overview of a 14 day closing... find my mistakes?

Question

I've bought 3 houses with conventional financing and the traditional 30 days closing from the MLS. Easy enough with the agent, title co, and lending all doing their parts. But as a newbie, the initial process of making a FAST, AGGRESSIVE all cash/ hard money offer to pick up a property is just more intimidating. Could anyone help find any mistakes or missing pieces below ? It would help make it less nerve-racking the 1st time around.

Hypothetical Deal = 160k ARV x 0.75 = 120k - 25k repair = 95k as a maximum offer ( Many experienced investors in Texas seems to want a $30k + profit on rehabs or they won't do it. I don't have to hit a home run on the first deal, I just need experience + a modest profit)

5 Steps ( simplified)

1. Write up the contract and have seller sign ( standard 1-4 family, TREC form in Tx)

2. Include a letter of intent to fund/ certified funds ( needed?)

3. Put in a 5 day option period to have professional Home Inspection or GC come through to make sure i'm not investing in a money pit.

4. Contact Title Co. immediately to start the process

5. Close within 10 - 14 days

Can anyone point out any major events during the purchase process that I'm leaving out? I really appreciate it!

- James

Caleb Heimsoth · Answer

@James Destef. This will be market dependent and maybe you can’t do this if the market is very hot, but I would allow yourself a 7 day inspection period. You can put it in your contract as “5 business days” but really I’d give yourself at least a week. Personally I like inspection clauses of 10 day minimum on the buy side. Obviously on the sell side I like shorter.

Biggest reason for this is scheduling the inspector. My inspector is good at what he does and often takes over a week just to schedule and get him on side.

Maybe in a flips case they isn’t a big deal, but most of what I buy has tenants, and coordinating with them also takes time.

Guy Gimenez · Answer

@James Destef

What about a survey?

Nicholas Covington · Answer

@James Destef biggest thing as stated is going to be the market that you are in. I will say however if you are putting 5-7 option periods on your contract you are going to lost out on a lot of deals. In my market people are closing on properties in 3-5 days.

Can you win a deal with 10-14 days? Sure. But if its a hot home, no one is going to pick you.

James De Stefano · Answer

Good call, I would assume that's missing about 90% of the time or outdated with off-market purchases.

James De Stefano · Answer

Thanks for the replies gentleman. Yes I definitely understand the hottest and screaming good deals will get scooped up quickly and could have several bids. But there are different levels of motivated sellers.

And I've heard DFW market is intense right now. Texas in general seems to be have a bullish future.

Quick overview of a 14 day closing... find my mistakes?

Quick overview of a 14 day closing... find my mistakes?

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