All Forum Posts by: Ann Contorno

Hi and welcome Edwin!

I would stop putting the large chunks on the credit card, let that ride with minimum payments, and start banking for some downpayment money immediately.

Private lenders and hard money lenders, while easier to work and more flexible with terms than conventional banks, are going to require some skin in the game, especially with neither of you having any experience. I can promise you that you will be HARD PRESSED to find someone to finance you 100% on any property. You will need some seed capital.

If you are going into buy and hold, I also advise all of the new investors I work with to keep PLENTY of reserve capital. You have to cover that note every month regardless of if your tenant loses their mind and stops paying you. Tenants can play games and stay in properties for many months while you are trying to evict them. This is not a game you want to play without some cash reserves. It will take the fun right out of things! :)

You might have a bit of luck buying with owner financing - you could get lucky and find someone who is sick of holding a property and just wants to get out of it. You could also try something like a sandwich lease option to start out with. You can control the property with a sandwich lease option, but not have a huge cash outlay upfront. You need to focus on deals where you get in as light as possible.

I think owner financing and the sandwich lease option are your best bet, but AFTER you have some cash reserves.

J Scott- great post! Can we make that sticky so we can find it again easily? Would be great to be able to point newbies to it!
Thank you for sharing!

The good news is that you are cued up and have your line ready for the next smoking deal that comes along!

I agree with Jon - time for a new agent. Walk don't run. And find out the name of the other agent and be sure that you don't use them either. Both acted inappropriately. They should both know you never move on anything without documentation. Your agent did NOT have your back at all and failed miserably in protecting you.

Have you tried offering a closing cost credit ONLY if they use ABC Lender (your preferred lender)?

Do you reference anything about your preferred lender in your narrative?

Have you ever asked for a preapproval from ABC Lender (your preferred lender) in order for them to make an offer? I'm thinking this way you can socialize the concept of using your preferred lender early on. I'm operating along the lines of setting up the thought process of if they have to get pre-approved with them, why not use them.

James - The items that I listed are things that I am guessing that the mentor is including based on what Nancy listed as what they will help her with. Maybe I should have clarified and said for what she is paying to make sure that the mentor includes those things.

I'm going to have to respectfully disagree with you on your contract comments. I always figure contracts worth around $1,000. An attorney drawing them from scratch is not an hour long process.

There is no way on earth I would EVER use an agreement to purchase a piece of property that I dug up Googling! If someone did Google themselves an agreement, they should at a minimum have an attorney review that agreement to be sure that they are completely protected in the purchase. You need to have your outclauses firmly in place when you are wholesaling or you will be hosed into buying a property that you can not move and that you can not afford to buy yourself. This is exactly an example of how someone who is new COULD benefit from having a mentor - the mentor should make sure that the student is protected by the appropriate out clauses and doesn't go out using random agreements if they are doing their job.

I agree with James completely about due dilligence on the program...and get everything that the mentor will provide you spelled out in your agreement. As James accurately pointed out, not all mentors make sure that their mentees are ready to hit the ground running after they are done with the program. Be sure that you won't be left in that spot!

Hi Nancy - You are inquiring about acceleration and yes, having someone to work with and walk you through your deals, and use their team, and use their buyer's list will accelerate things for you. You can do this on your own with the help of picking up a $97 course or something along those lines, but you are starting out from scratch. What a mentor will do is provide you with things that are already lined up and ready to go; teams of professionals, hungry buyers on their list, a title company that will actually DO wholesale deals anymore which is very difficult to find..only one left around that I am aware of. The mentor is saving you from 100s of phone calls and months of legwork. That is the difference and the benefit of partnering up with a mentor.

If they are including contracts, that is worth at least $1,000 right there, since you would have to pay an attorney to draw those up for you from scratch. Figure about $250 an hour for attorney time. The benefit is that your mentor's contracts are tried and true and being used in the field today, and you don't know that an attorney drawing them up from scratch would include everything neccessary.

And yes, they will charge you for their services and that does not make them a rip off or a scam. They are giving up their time, their resources and contacts, and their education which they have likely spent $75K - $100K accumulating. Many of us have spent countelss hours in weekend bootcamps, countless dollars on education courses AND countelss profits lost on costly mistakes. You as a student benefit from learning for those mistakes and getting hours of training packed up neatly into hour long weekly sessions with your mentor.

It's basically 10 years of experence condensed down. Only you can make the decision if it's right for you or not.

Rule #1 before you do ANYTHING with rentals - have PLENTY of reserve capital set aside. You do NOT want to be in a position of not being able to cover the mortgage if you tenant loses their mind and stops paying you and it takes you a year to evict them. That is the best piece of advice I could give to a new landlord.

Interesting problem to have Bryan! You are right in that most people lack vision, which is why we do what we do and not everyone else can. Do you have any similar properties that you've done that you have pictures or video of that you can show them? I would definitely not let them in while the place is wrecked. You never know which way that will go.

Relative to micromanaging the job the way to stop that or at least insure that you will not experience any issues financially if you allow their input is to take a NON REFUNDABLE earnest money deposit from them if they want to come in and start making pics. And I don't mean just changing out a piece of trim or some siding - I'm referencing if they want custom paint colors or a say on the countertops, etc. Make sure that it's enough to cover the changes and enough to put them back to neutral colors/choices should you have to market the property anyway if they fall through as a buyer.

I would structure the contract that you keep this non refundable earnest money whether or not the deal closes. 2 out of 10 mortgage applications get approved these days (something like that) and I would not get stuck holding the bag on any customizations. I would also talk to their lender personally before entering into any contracts with them and find out how their credit scores are, if they have reserves, etc.

Good luck Bryan! Hope all goes well!
Ann

I'm convinced of it! Jon Holdman knows EVERYTHING!!!

I agree with J Scott. Coming from the perspective of being an investor and having been a licensee a few years ago, I can see why she will want something for her time since you have done NO business with her what so ever. If you are going solely do wholesale deals, she knows good and well that she will never make a dime off of you.

It is very expensive to maintain your licensure, and realtors are hurting now. There are so many newbies running around who just got out of a Rich Dad weekend boot camp who want to try to play investor. 90% of these people go no where and never turn a deal. Maybe even higher than 90%.

Show this realtor that you're not a joker and that fee will disappear, I guarantee.

Or I saw someone suggest that you offer to pay her quarterly MLS dues and in turn she gives you access so that you can do your own grunt work and not bother her. She might go for that.

As for Mr. Once A Week Showings - he can keep his free comps. He's not really serving you at all.