Real Estate Broker | Investor | Property Manager · Plantation, FL · Member since 2015 · 228 posts · 68 votes
Hi all,
I think I found my first deal for a fix and flip. it is a FSBO, so I want to know how I should approach it to get control of the property while I get money from my private lenders. Do I submit an offer form or do I go to the homeowner and have them sign a full contract? I would like to skip paying realtor fees, so then should I go ahead and contact my title company and RE attorney?
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
10y
Is there a current mortgage on it? If not, try an owner financing approach. Ask them for a loan with interest for 12 months with a balloon at the end of it. Never hurts to ask. You will pay a lot less than a private lender. If there is a mortgage, that's out.
Even if a realtor gets involved, the seller pays the realtor fee, not the buyer. I'd recommend using a realtor when you go to sell. Their fees are worth the service they will provide. Just work that into your numbers before you buy. If adding realtor fees when you sell make it not make money, it's a bad deal already.
Outside of that, yes, you need a full contract no matter what you're doing. Make an offer, if accepted, put together a contract, then purchase. Your title company and attorney would get involved at the appropriate places of the process. If you don't know when that is, not trying to be harsh, but you might need a little more education before jumping into a flip using private lending. Real Estate is a great investment, but if you don't have a good idea of what you're doing, your much more likely to buy a bad deal or make enough mistakes along the way to kill your profit.
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
10y
Is there a current mortgage on it? If not, try an owner financing approach. Ask them for a loan with interest for 12 months with a balloon at the end of it. Never hurts to ask. You will pay a lot less than a private lender. If there is a mortgage, that's out.
Even if a realtor gets involved, the seller pays the realtor fee, not the buyer. I'd recommend using a realtor when you go to sell. Their fees are worth the service they will provide. Just work that into your numbers before you buy. If adding realtor fees when you sell make it not make money, it's a bad deal already.
Outside of that, yes, you need a full contract no matter what you're doing. Make an offer, if accepted, put together a contract, then purchase. Your title company and attorney would get involved at the appropriate places of the process. If you don't know when that is, not trying to be harsh, but you might need a little more education before jumping into a flip using private lending. Real Estate is a great investment, but if you don't have a good idea of what you're doing, your much more likely to buy a bad deal or make enough mistakes along the way to kill your profit.
Simpsonville, SC · Member since 2015 · 5 posts · 0 votes
10y
I have completed 2 FSBO transactions. Both were very easy and straight forward. I negotiated with the seller verbally and once we agreed on a price I completed a full contract which I found online for free. Once the contract was signed I sent it my real estate attorney. All I had to do after that was finalize financing and set up an inspection.
Real Estate Agent · Venice, FL · Member since 2016 · 7 posts · 3 votes
10y
I am a realtor and have experience with the fsbo market . People tend to think they have a great deal because the fsbo saves on realtor fees. I can tell you unless you have great knowledgeable and a great negotiator along with several years of experience knowing what you are purchasing get a realtor period. Here is usually the thought . I can get a great deal on this fsbo because the seller does not pay that usual 6% commission. So what does a normal buyer do they offer 6% less or or even less than that after they use that zillow estimate. Note please read the fine print on that estimate you may be surprised that is not a price evaluation . What you get is a direct transaction that may involve sometimes no disclosers or proper pricing of the fsbo initial price . The buyers may find out after the purchase something unexpected such as a sewer hook up fee from septic to sewer after purchase. Something your area knowledgeable realtor would know . Note Realtors are not used car salespeople. This is why. You buy a car from the used car lot . The car is owned by the dealership lot itself. You are negotiating with the direct seller the Dealership just as if you are purchasing with an individual. In real estate you are using the knowledge and Professionalism an often years of experience in the area to represent your interest. You can come to us as realtors and say I want to buy a home that is undervalued in the market place so i can do the rehabbing myself. Now go say that to a fsbo seller. Tell them you figure your home is not priced right or you are going get a great deal with all the work you have to do. Dont forget that the fsbo seller often is trying to sell high and want the commission for themselves. They also may take it personally that you think their home needs work. I have worked with many buyers and had the fsbo pay a commission to me . The buyer was appreciative of the fact I had knowledge of the market resale and provided great home inspectors and had the fsbo sellers sign disclosers etc. I also know in one case that the property side lot was actually county owned land and no the buyers dream of a pool was not going to be able to be built there . Thank goodness they had a realtor because the property had a nice flower bed and swing on that side lot . It looked like one lot. What a disappointment that would have been.Get a Professional full time Realtor and have someone working for you. Have a Great Day!!!