May have gotten my first deal...NOW WHAT????

Question

So there's a property in my neighborhood that has 2 1bedroom apartments and a commercial store currently being used as a church. The owner lives about 45min's away. I said good morning to her and struck up a convo. I asked if she would be interested in selling the building she said sure she's tired of coming back and forth. I asked would she do a seller finance or lease option she said yes make her an offer. She want's 529k the area is going for 450k currently she's getting $3550 a month. I told her I would speak with my investor and make her an offer. Here's the problem I don't have an investor and don't know the next step. I can put something down just don't know anything about this..I've been listening to the BP podcast and reading the forum and just figured I'd give it a shot but didn't think she would actually want to sell...now i'm stuck

Martin Scherer · Answer

Unless I missed something in your explanation of the property, why would you want this?

It seems to fall in the "just because you can doesn't mean you should " category.

If properties are going for $450 why would you be excited about $529?  The income is certainly not exciting unless that was net which you didn't indicate.  It sounded like gross income.

I know I am in the minority here but you shouldn't tie people's property up unless you can close it yourself should you not find a buyer.  If you have an extensive buyers list with people wanting this kind of property it is logical to tie it up.  You do not have that and you do not appear to know the next step.

Brian Gibbons gives you great directions above and I suggest you consider them.  Fortunately you didn't sign anything and only talked to the owner.  It's good to get your feet wet but getting a license and actually going through the entire process is a great learning experience due to most large RE companies taking the time to properly train you.

A podcast doesn't train you it only tells you what someone else did and that's not the same thing at all.

Brian Gibbons · Answer

@Will Bert

If you want to get started in real estate, I would not LIE to people.

go to a REI Meeting in Brooklyn, and pass out cards, saying -

I find properties all day.  I am looking for JV Partners to make money with me.

Name, cell, email.

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Now find an attorney, get a recc from the REIA president.  This attorney must be able to help you with sub2, land trusts, leases, partnership agreements, etc.

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I would get licensed and be a listing agent.  Earn as you learn.

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Know what a motivated seller is, ask good questions,

MOTIVATED SELLER - QUESTIONNAIRE CHECKLIST

The following is a list of sample questions you should ask a seller.  When talking to a seller, try to ask the questions through the course of a conversation and try not to sound like you are reading from a list.

(Note:  You will not ask all of these questions depending on the answers the seller gives and your investing objectives.)

Asking About The Seller And Their Property:

•  Can you tell me a little bit about your home?  (# of bedrooms, baths, size etc.)

•  What do you like most about the home?

•  What do you like the least?

•  Are there any repairs needed?

•  What is your sales price and how did you arrive at it?

•  What do you think your house would appraise for in excellent condition?

•  What do you think your property could rent for?

•  Is your property listed with a real estate agent?

•  If you don’t mind me asking, why are you selling?

Asking About The Existing Financing:

•  Do you own the house free and clear?

•  Do you know if your mortgage loan assumable?

•  Would you sell the house for what you owe?

•  If not, how much are you looking to get above what you owe? (Subtract that from sales price to

get loan balance.)

•  How much are the monthly payment on the mortgage?

•  Are the payments current?

What Kind Of Deal Can You Get:

•  If I paid you all cash and closed quickly, what is the least you could take?

(Follow-up by asking if that is truly the least they would take.)

•  Will you consider leasing the property to me with an option to buy if I guarantee the mortgage

payments and maintenance?

•  Do you have a problem with someone living in the property until I get it sold?

•  Would you consider optioning the property to me, if there is absolutely no risk or cost to you?

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Serious, NEVER say something that is not true.

Brian Gibbons · Answer

A motivated seller is the seller that will take either low cash  or creative terms

If it's a wholesale deal it's 65% loan to value of after repair value less all costs including holding costs and sales costs

If it is a creative deal it is a subject to or lease with option or wraparound mortgage or Master lease etc

Just so you know a motivated seller is a diamond in the rough maybe one out of 20 to 1 out of 30

Will Bert · Answer

@Brian Gibbons technically I didn't lie. The investor is me with my home equity and my father but no I don't have a real real estate investor who does this for a living. Thanks for the fast response and question's I will be asking..

Judy Parker · Answer

Do a "happy dance" and buy it yourself!

May have gotten my first deal...NOW WHAT????

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