All Forum Posts by: Danny Day

Based on my numbers, the average purchase price to list price from this thread is around 73.06%. Great thread.

I just submitted one today for $42,000 on a $67,000 listing.

Going forward, could you guys please post what bank it was as well?

Danny

How accurate do these numbers look? I would like your feedback. Might be buying a multi-family here in the next few months and am trying to get my numbers correct.

I am not buying this one, but it is a sample deal I've seen on the MLS.

If you can't see it in full, click here: http://i39.tinypic.com/2e67rev.jpg

How are my insurance numbers? Is $1,500 annually to small (for SFR I'm paying $800).

- 20% of monthly rent to vacancy
- 10% of monthly rent for property management
- 10% of monthly rent for maintenance

My ARV valuations might be slightly off. I went off the 1% rule of thumb. I am not looking to sell real fast so that does not concern me as much. The appraisal should give me a more accurate value.

Thanks in advance

Danny

Thanks Don

The upside to this is that I won't be buying another Fannie mae home, so my out of pocket expense will reduce drastically. I can get into this kind of deal again for around $7,000 out of pocket.

I would really like to have the $32,000 back, ASAP.

Danny

Here are the details of a deal I just completed. It was a rehab for fix & flip, but ended up not selling for the price I wanted.

Purchase price: $65,000
Repairs: $32,000 (out of pocket due to Fannie 120% clause)

Refinanced into a converted to a 30 yr conventional out of a hard money note.

My current loan amount is $74,400

I got it leased right now for $1,350 per month - and my note is $700 (PITI). I'm cash flowing $650 per month.

I've got the appraisal at $137,000. I had it listed at $137,000 and got no bites. I had one offer at $125,000 and I (foolishly :roll:) declined and didn't even counter.

My options:

1. Keep the cash flow, wait until the lease is almost up and put back on the market. Their lease is up this September

2. Home equity loan? For the $32,000 for repairs plus another $10,000 for myself to reinvest.

I would really like to go with option #2. That would basiclly put my loan amount at / around roughly $116,400.

I think we should still have enough equity in there to sell with closing cost, etc. I also think we should be able to cash flow on the note (based on the 1% rent rule - valued at $135,000).

Your input would be appreiciated.

Thanks

Danny

I agree with Josh and Brad..

I got a listing and a few buyers from floor time (my office calls it property desk). Lately I've seen a decline in people signging up for the property desk calander. I don't sign up for it any more. I did it for maybe 1-2 months when I first got started in the business.

It was good for FIRST starting out in real estate. It was also good to use those people who call in to "make mistakes", or get your feet wet. I went on my 1st listing appointment from floor time. I also went on my 1st buyers appointment from floor time.

Some agents get good leads and build their business by working open houses for other agents. Although I've never got a client by working this, I have sold one of my listings through an open house (alot of agents think they are a waste of time).

Like Joel said, your bulk of lead generation is online. You need to think of this as time vs. money. Either you're making enough money and don't have the time to generate (and then pay to generate) - or you're not making money and you have the time to generate.

My advice is stay away from paid sites such as Zillow or Trulia ($60 a month?). You can make profiles there, but don't do the paid signups. They have bogus leads, and I never even met with 1 buyer / seller from any leads I got. It was a sham, to say the least.

If I could go back and talk to myself when I 1st got licensed, I would whisper the word craigslist in my ear...

Build your online presence through creating a blog, Twitter, Facebook page, and others and update them regularly. The more content you have, the more traffic you'll have.

I will also tell you this - for every 10 leads that I get, 9 are buyers. They are easier to come by. If your office does not offer someone to qualify/originate loans you need to make friends with someone who can (and wants to) close deals quickly. Send all your prospects to them to get qualifed before you spend your time and gas.

Another easy way to make some "pocket change" is work leases. I did this for awhile to get the hang of things in my down time. Some agents look down on doing leases, but IMO making $350 is better than making $0 today.

Good luck

Danny

Welcome to BP Michael. I miss the hill country!

Danny

99.9% of people who say they close in a week are buying with cash or hard money (same as cash). Hard money lenders will have their own appraisers come out usually within 24-48 hours. Once that is complete, they will close it out and fund. If you're buying private money, all you really have to wait on is a title insurance policy from the title company. Might take a day or two. The same applies to the hard money deal as well. Although you can also buy homes without title insurance, hard money lenders or private lenders might require it.

Danny

Thats a good question. I do not know the legalities of it all just yet. I assume if its a private loan you are not subject to this clause. I'm really not sure. Wish an RE attorney could chime in.

Danny

Thats total lending amount, so my hard money lender could only lend up to 120% of the contract price.

$65,000
x 1.20
---------
$78,000 total

$78,000 - $65,000 (purchase price) = $13,000 for rehab

Its the same as saying 20% over contract price.

Danny

I listed a home for a client about 90 days ago, and we got a contract a week or two ago. When I listed, I knew we were a tad bit over priced - about $4,000 max.

The offer came in about $9,900 under our list price - so in reality, about $5,900 less than what it should have sold for.

We took it, and had some drama during the negotiation phase. The buyers agent was upset with how high the house was listed, and how tough we were on negotiations. She didn't get any repairs :wink: , not that it needed much at all.

Needless to say, she hinted that the appraisal value would come in significantly lower than our contract amount, givnig her the ability to re-negotiate the price of the house due to the 3rd party financing addendum.

I've read some post on here on how to charm appraisers, and all I can say is the advice I got on here worked TEN FOLD.

Our appraisal came in at exactly contract price. The appraiser thanked me for making it smooth for him to gain access, etc.

The buyers agent was not happy that it came in "high".

I thought other agents / sellers could benefit from what we did:

- Set the appointment with the seller for the appraisal
- Confirmed the appointment the day of with seller / appraiser
- Had seller lay out executed contract, sellers disclosure, and addendums in kitchen.
- Had seller lay out a list of repairs completed, along with invoices for all repairs.
- Contacted appraiser after to ensure everything went smooth.

Ready to close now
:mrgreen:

Danny