Under Contract, but NEEEED advice!

18 Replies

Good evening guys, so as the title says we got a property under contract. Technically its 3 adjacent parcels which is a little over .75 acres. Two are are corner lots and one is facing a main street which can also go commercial. So basically its the whole end of a block. The parcel facing the main street has two structures that need a lot of work. I think its a duplex and triplex at first. They turned them into little efficency rooms. Really shoddy work. But they were generating $2500 in rental income. The middle parcel is vacant but being leased out for $600 and I believe has services. The third one kind of blended into the middle one. We are having a difficult time marketing it. Looking for some tips on this one, we would greatly appreciate it. Thanks for reading.

Updated over 3 years ago

Is there any way we can close this one ourselves with creative financing?

Maybe partner up with an experienced wholesaler in the area.  Part of something is better than all of nothing.  Plus, you might learn how to handle the situation the next time it arises.

Very valuable information @Roland Paicely just gave you. Someone will be willing to help you if you're adding value to what they're already doing (bringing them a deal). Just make sure you protect yourself as much possible doing a joint venture deal.

Wow. I can't imagine getting into a contract if I wasn't already prepared to settle myself if necessary. Did they not ask for proof of funds or anything? Or do they already know you are just going to assign it?

Originally posted by @Shawn Clark :

Wow. I can't imagine getting into a contract if I wasn't already prepared to settle myself if necessary. Did they not ask for proof of funds or anything? Or do they already know you are just going to assign it?

 Yes they know. But that's not our problem. Have any tios Mr. Shawn.

Originally posted by @Manuel DelaLlata:
Originally posted by @Shawn Clark:

Wow. I can't imagine getting into a contract if I wasn't already prepared to settle myself if necessary. Did they not ask for proof of funds or anything? Or do they already know you are just going to assign it?

 Yes they know. But that's not our problem. Have any tips Mr. Shawn.

Thing is after we did inspections we do not want to take this one down for ourselves. So we are looking to assign or terminate. I'd rather assign. Our concern was someone coming in and snaking our deal which is what I thought was meant by protecting ourselves.

This is so typical in Houston, and it drives me crazy. They cobble together two or three small houses and call it a multifamily, rather than it actually being a multifamily building. There's always a big house and a couple of small houses on adjacent lots. Or a couple of garage apartments in the back. And there's ALWAYS a mobile home somewhere on the property.

Id be looking on the mls and checking out all the cash purchases in that area in the last 6 month to a year.  Try and reverse search their info and start making phone calls to as many cash buyers that have bought similar type of properties.  Look at buyers that have bought commercial properties as well.  If you dont have acccess to the mls, I would suggest making friends with an agent that would hook you up.  Hit the phone like crazy and find you some real buyers.  Let me know if you need any other help.

Originally posted by @Manuel DelaLlata :

Thing is after we did inspections we do not want to take this one down for ourselves. So we are looking to assign or terminate. I'd rather assign. Our concern was someone coming in and snaking our deal which is what I thought was meant by protecting ourselves.

 WHY would you file something in the records? This is often suggested but IMO is a poor way to operate UNLESS you intend to purchase. If you filed and then had inspection, you did it backwards. I recall Mindy Jensen referring to this tactic as "bush league" and I agree. 

BTW--is your marketing in compliance with the new TX statutes? 

Originally posted by @Justin Garcia :

Id be looking on the mls and checking out all the cash purchases in that area in the last 6 month to a year.  Try and reverse search their info and start making phone calls to as many cash buyers that have bought similar type of properties.  Look at buyers that have bought commercial properties as well.  If you dont have acccess to the mls, I would suggest making friends with an agent that would hook you up.  Hit the phone like crazy and find you some real buyers.  Let me know if you need any other help.

This is excellent advice. And even if it's a bad deal and none of them want to buy it, they still might have good advice for this one or in the future, and they can go on your future buyer list.

As I tell everyone I meet in this business. If you don't want it why would anyone else? If it's not a screaming deal then I don't put it under contract. Try renegotiating with seller to where you do want to do it and then it'll be a lot easier to get rid of. Do you get me?

Originally posted by @Fred Heller :

This is so typical in Houston, and it drives me crazy. They cobble together two or three small houses and call it a multifamily, rather than it actually being a multifamily building. There's always a big house and a couple of small houses on adjacent lots. Or a couple of garage apartments in the back. And there's ALWAYS a mobile home somewhere on the property.

It is what it is. The structures have a total of 9 units and being rented out. Can't call it single family :) it's definitely not your typical multifamily either. But appreciate your constructive criticism.