All Forum Posts by: Brian P.

Ray

You say the title company will be chosen at the close of escrow, seeing as your in California most of your escrows will be handled by the title companies, so cover it up front, the title and escrow company shall be selected by the buyer, after all if title insurance is required the policy covers the buyer and they are the ones expected to pay for it so they should pick the company. your clause doesn't say who is going to do it and pay for it.

They showed their motivation when they went FSBO to save money and then went with a price much higher than the 10% over market that most FSBO'S with high hopes come up with. I would wish them luck and without a lot of discussion put them in my tickler file to followup with in 30 days. That call would be I talked to you last month and thought of you today and wondered how the house selling business was going at 123 Main St? Things change, people die, bills start to come in, etc. Plus they have had 30 days to be educated about the market by other investors and agents. And maybe the high price isn't so high anymore, but has reached the why don't I come over and analyze the property to see what kind of offer i could make you? And most important she apparently doesn't have the legal capacity to contract, is the legal owner of sound mind? I have a few cases that I know of that other investors got caught in regarding mental capacity and other issues like elder abuse.They stepped into quicksand.

Corey

Your original question was find the deal first or find the buyer first. 

Since I started investing back in the age of the dinosaur I have always found finding the deal first is my best shot because without a deal what good would having a 100 buyers be. Others say having the buyer first allows you to focus on an area to find a deal and when you find it you have a built in buyer. BS, you still have a built in potential buyer, not the same as a sure thing buyer. Plus one reason this buyer wants to use you is to find this deal is that is hard to find.

And as a surfer friend used to say to me after some guru told him find the buyer first and then the deal, they want me to find the only shell on the beach and then they want me to cut my price after I have found it because they are the only buyer on the beach at the moment, but what they forget is I still have the only shell on the beach at that same moment and other people will want that shell too..

Plus that buyer almost always wants to find a deal in an area I'm going to be working anyway and if he is on my buyers list as wanting that area he will be getting one of my first calls. Another reason I don't work war zones or lower level housing is I take a shot at semi-retailing for a week or so if it is the right property, many non-investors who are looking for a home will jump at a retail price with a good discount.

So after 60 years of investing I still say do both at the same time but focus on finding the deals first. No deal, don't need to show no stinking badge. Really liked that movie.

Ray 

Go back to square one. From now on just make sure to have something about the contract being assignable in your contract. I don't care about the legal argument and you think I would since I started out to be a lawyer before I changed gears. First, it was legal problems that prompted investors to start using and or assigns, so just make it clear up front I have a assignment clause whether other parties here think it is unneeded or not. plus I don't like the seller being taken by surprise when someone else shows up in his deal, that clause eliminates that.

Now the title company deal, if your not going to do a double escrow and the seller is not paying for the title search and escrow, why are you selecting the escrow company in the contract, just put the title or escrow company shall be selected by the the buyers in the contract. Since I pay these fees in my deals I just tell the occasional seller that objects that if he wants to pay the fees then I have no objections to his selecting the title or escrow company, and guess how many sellers have taken me up on that ?

The main reason for a double escrow is to hide your profit in the deal because it appears excessive and that is a good reason because if you think it is excessive it"s likely the seller is going to feel the same way too. Also there are other ways to have the seller avoid seeing your profit but I won't put those into your brain until your more experienced.

The question of when to try and find a buyer, that is easy, I'm thinking of the potential buyer when I'm dealing with the seller before I have even written the contract. As you grow you will have your buyers list getting bigger and have a few key buyers, ones likely to buy your deal now. In my contract I have the right to show the property to potential partners, owners, inspectors, and other people that may be needed in, or may become part of the transaction. And the right to place a key box (you can get at home depot).  

Once you have the property under contract you start contacting buyers, work your list and even maybe post a few free ads at sites like craigslist, first come first serve. Remember wholesaling is really a contract or control game. Once you have control it is go go time. Just remember you are selling contracts and like any other product if it is overpriced it is not likely to sell. 

Louis

If your looking for a house to rehab, that is what I seem to get from your post then put the word out to wholesalers while you learn to do what wholesalers do. I know a couple of rehab guys that never look for property unless it falls into their lap, they get the properties they do from wholesalers assigning their contracts to them and look at the MLS stuff only for that occasional deal that shows up.

If the buyer has an objection to how much your making, ask him are you willing to take less profit on your end so I can raise my price to you when my profit is not going to  be as much as I normally get or want and your profit is going to be normal or better? Don't let them answer!!! Say of course not, Your entitled to make what you should make for your time, money, and effort. If I offer you a hundred dollar bill for $60 should it matter to you whether I paid $59 for it or paid $30 for it? No it shouldn't, your concern should be are you paying a really fair price of $60, and not if I am making $1 or $30, greedy people will want a chunk of the $30, but never offer to give me more then the $1 when that is what I'm making. They are happy to pick my pocket when it is full of money but will never put any money into my pocket when it is empty. If your a greedy person let me know and I will take you off my list of people to have a shot at properties I have managed to get at a very good price so you won't have to worry about me making money you feel should be in your pocket.

Sound harsh, well I don't want to deal with greedy people and have used that exact response about half a dozen times in my life and they continued to buy from me without any more BS. Of course these were investors and not a seller who was about to have a stroke when they saw the amount. In most cases I could see their point and they could use the money and I was not expecting the big windfall and that is what I would tell them. I would say Mr. Seller, I never expected this to happen but I got lucky in this instance, and made $100, I was hoping to make e.g. $10 for my time, money,and effort in this deal so this was totally unexpected and to be fair I think I should get my $10 and then we should split the bonus $90 equally, does that sound fair to you? 

The answer was yes except for one time the old lady said well how about you get twice what you were expecting and I get the difference? That cracked me up and I said ok you win, I'll take one third and you take two thirds of the difference. She hung me out to dry for a few minutes and finally said ok I'll take it, but I think it should be 80/20. I really liked this old broad and that is often what I would call her and she would chuckle. So my response was ok you old broad, you win, you know I can't resist your charm, 80/20 it is. We became good friends and about every 3 months she would call and say it is time for you to take this old broad to lunch. 

I never liked double closes because I didn't want to be on title for even a few seconds if I didn't have to be, but that is another discussion.

I don't know, 19 is a little far over the hill and now time is running out, not much time left to do much. O.K. now the real advice, if you want the degree be sure to give that priority. Now your next job is to earn some bucks and pay for your education with as little student loan dollars as you can.

My father in law was born and raised in Rochester and I know if he were still alive his advice would be to go west young man just as the famous publisher said. But you aren't going to do that so focus on a few niches. 

I'm not up on Rochester now days but I assume there are some activities you can learn now and use later in your life. When I was young (16) one of my activities was tying up properties with a straight option and then when we (my 19 year old brother) were ready we would fix up and flip. Now days we would have wholesaled many of these but back then a wholesaler was as rare as a dinosaur and investors would say you want to do what?. But we managed to do some wholesaling by assigning contracts to a few contractors that wanted to keep their crews busy plus keep some money coming in.

When my wife's grandfather in Rochester retired he needed some extra income so my wife taught him judgement recovery which he could do on his own schedule, that might be a niche that would fit in with your plan. Also getting your license was mentioned. That could work well too, just limit it to partnering up with a decent agent not doing a lot of production that would welcome getting half of the pie you provide by prospecting, these prospects  you find during the hunt for wholesale deals. The average agent today is really part time even though they claim they are full time, but putting in the hours is not the same as putting in the work. You will be adding putting in the work for your share of the pie on the business you find.

You say these loser tenants are still in there. Evicting them and getting a judgement is the most important steps to take at this moment and seeing as the house is next to you it would be best to have the owner do it now. You do want some control if you can get it so I suggest putting a straight option into play right now while the owner works to rid the property of vermin.

Chris I'm one of those people who went to college and feel I could have done without it. I started investing right after my 16th birthday with my older brother who could contract and because I wanted to be the first in my family to get a college degree I worked a full time job and carried a full load at college. 

 I feel what I got out a college was a girl that I have been totally crazy about and married to for 55 years, so going was well worth it to me just for that reason, but career wise it was a total waste of time. It also took away four years of my investing time plus the years after graduating that I wasted playing executive for a fortune 500 company with 70+ hour work weeks.  

But it is a good item to have as a fallback plan. I have seen scores of college graduates try to make it in in real estate, as a agent or investor and other causes and it was a life saver to them to have that degree in order to get a good job when their attempt at self employment and independence crashed. Consider it an insurance policy. Just make sure the degree is in something marketable.

Craig I think you have made a good decision. When you have received your license you will have received a license to hunt. Give us a heads up you are now licensed and ask us about the next step, learning to hunt.