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BlogsEric's BlogGood deal... Gone bad?

Posted over 16 years ago

Good deal... Gone bad?

Ok, so I'm a pretty new investor. I bought 3 properties to fix & flip. I rehabbed the 1st property and decided to pay one of my network marketing colleagues to market it in this package of 6 houses. Some 'middle man' in Australia who had network of investors, contacted my colleague. Well, the buyer signed the purchase agreement, I got the house inspected, paid for the city closures, put a tenant in it, and VOILA... 3 months later the title company is STILL waiting for the seller to 'wire' the money for the closing. The Australian 'broker' still hasn't returned any of our calls. The title company said I could kill the deal if I wanted, but I dont have anymore buyers. Has anyone ever been through this before?

Comments (6)

  1. Reason why I say use signs is because this is going to draw in more serious buyers or renters.People who are looking not just browsing. You dont want some other so called investor to call you and try and get you to sign an option agreement or something like that. If thats the case just advertise that if someone can find a buyer that you will pay them so much of a percentage of the purchase price at close. Do you have warranty deeds? or quit claim deeds? DID YOU BUY TITLE INSURANCE

    Ryan Mertz, over 16 years ago


  2. Whats up E.Nelms, Yea I could see people being suckered into the hype. I knew the houses would keep dropping because even before I got on biggerpockets.com I was out talking to investors and asking them what they think the future holds. A few of them laughed and said sit back and wait for deals because you got a good 5 years before the market even begins to climb. Im in Detroit so we are alot different but in my honest opinion every where is a down market and it is what it is. You got the properties now so you stuck in the game is what me and you will call it. Here is something that might help you. Put a sign out from that says : RENT (: your phone number) then put 2 signs up the says FOR SALE BY OWNER (your number) 2 things will happen people will call about the rent and also investor will hawk you down and call you about the FSBO. Dont waste time advertising on the computer just shoot straight for real life and people who are out looking to buy and rent in your area and this will happen with SIGNS. If you have to go to the end of the block your properties are on and put signs at the main street or cross streets that say FSBO or RENT with your number and people wont even need to drive by your house they will just write down the number and call. Do you think this is a good idea?

    Ryan Mertz, over 16 years ago


  3. @ Brian & Ryan I understand where you guys are coming from now... It was the beginning of '08, I was 26y/o & never seen a recession so I got suckered into the "hurry up and buy before the market goes back up" frenzy. Plus, I came into a little extra cash so I figured I'd invest in something I had a bit of experience in... "rehabbing". At WORST I figured I could resell 1 or 2 of them 'as is' and make a small profit. @ Josh... The closing FINALLY went through. The Australian broker made the buyers & the sellers angry. I still have two more properties left that need work. I'm working on my buyers list as we speak! I LOVE NETWORKING! Thanks fellas!

    Eric N., over 16 years ago


  4. Eric , I also am new to investing in Real Estate but not new to investing in LIFE. I wont question your experience or why you would buy 3 properties at once. To me thats not uncommon. I know of investors who will go to a block in Detroit and try and buy all the houses on the street. For example my wifes uncle owns 6 houses on a 20 house street. He bought these houses in the lats 90s and refinanced over $300,000 out these homes. Which he pays he debts off with the rent he is paid off his tenants. This is a guy who bought one house at a time fixed it rented it out and refinanced. Right now we really dont have the same game plan. Im sure alot of people can advise you what to do but it really is up to you what you want to do. I heard of a man from out of state buying properties in Michigan through a wholesaler. He paid $5000-$15,000 for each property thinking "wow these homes are cheap I can rent them out or re-sell them" well lets just say this many would be lucky if he isnt living in a box right now !!! That is not how we should play the game as a rookie. When you are experienced you will make experienced mistakes. Its like betting on black over and over and over and over and over and over... you get the picture. It is a 50/50 if you are going to get a profit or cash flow out of the property. But if you have your numbers right and a good game plan then you should atleast break even and in the long run you will get your profits. CLEARLY THATS WHY ITS CALLED INVESTING!! Since you already bought 3 properties I have to wonder what your orginal game plan was or is?

    Ryan Mertz, over 16 years ago


  5. Eric - If you don't have any more buyers, then you need to get on that ASAP. Having a good buyer's list is going to be essential in quickly selling a property. If you don't, you need to be an expert marketer. I'd jump on the marketing forums to get some ideas about marketing the property. That said, as Brian mentions, you must be careful to take it slowly, particularly when you're just getting started. It is very easy to get in over your head. Give us an update and let us know what is going on with these deals.

    Joshua D., over 16 years ago


  6. I guess my question would be "why did you buy three homes to fix and flip and once when you didn't have the experience?" Did you get an earnest money deposit? If someone can't get you the earnest money within a few days that sure should be a sure fire sign they can't close.

    Brian Levredge, over 16 years ago