All Forum Posts by: Jason Cummins

70% is definitely the standard. But today's market is obviously slow. So I try to start out at 60%. Here's why. If I can obtain it at 60% then I know I should have absolutely no problem marketing it to the end buyer at all, even in the slow market. I will work up from there though to around 70% depending on the situation. It gives me a LOT of wiggle room, and I like wiggle room in a game of numbers.

In this market, you may not sell a house at 70% anymore unless you are DEAD ON accurate with your ARV and repair numbers. Again, 60% gives me that wiggle room just in case my ARV doesnt match the end buyers dead on.

I always try to determine what I want as my assignment fee when making an offer on the house. Most investors I know want to see the house at 60-70% ARV with your fee included. If your mentor doesn't do it that way and is successful then great. I cannot tell you that mine or his way is better, I can only tell you what works for me. But it does seem that you should factor in your assignment fee when doing the math...

Hope that helps

It's a bust. Too bad too. The seller wasn't very honest with us. (as usual) I shoulda done a few things differently, such as go out and present the contract to him in person, and try to get him to sign it there. Faxing it over lead to too many things that coulda went wrong ie. a better offer, now he doesnt return calls

It is very hard to wholesale an REO. With that said, they can be done, and their are some people on these boards who claim to have done them.

There are so many issues as to why REO's are hard to get done as wholesale deals. Here are a few of the main reasons REO's are hard to wholesale.

- Can you assign the contract? (Probably not)
- Will the title company do a double close? (possibly, but if not, what else?)
- What about the end buyer's financing, are there any seasoning issues?

Exactly

We sold all three of our retail houses this month in the Houston Market. One for way less than we expected, but the other two sold for what we wanted.

Hey Damien it's Jason.

I would get them under separate contracts. This is just in case your end buyer doesn't want all three, and you can sell him one or two of them. Plus the title company may require separate contracts. Just call the title company and ask.

For me this deal is very borderline.

If your numbers are correct, here is what it looks like.

ARV - $75,000
Purchase Price - $25,000
Repairs - $25,000

On a general basis, you want to get the property, the repairs, and your fee all for 70% of the ARV or less. In today's market though, I like to get it all at 60-65% or lower. Some rental buyers will go up to 80% though. For this instance let's just use 70%.

70% of $75,000 (the ARV) is $52,500
$25,000 is the purchase price and $25,000 for repairs equals $50,000. This leaves $2,500 left in the 70% formula for your fee.

This is not very much room to wiggle at all. If you use a double closing you will eat even further into the your profit with the costs of the closing costs.

Double closing doesn't change the fact that you are sending it to a new buyer. Your purpose in double closing then would be to mask what you are really doing.

I would just talk to the seller more about having to assign your contract.

here's an outside the box kinda idea that goes along with small mom and pop stores

take one of your signs, cut off the phone number, take it inside the store and negotiate with the owner of the store to hang the sign up in the store where it can be noticed frequently

people will see "we buy houses" and question the clerk, the clerk then get's the information and sends it to you, if you close on the house pay them a referral fee

What is Commercial PM?

To clarify, I do not have buyers that use conventional financing. It is EXTREMELY hard to wholesale to an end buyer who is using conventional financing for a bunch of reasons. My buyers are usually cash buyers or those that use hard money.

Second, it's not the buyer that hasn't returned my calls, it's the actual seller, the owner of the property, so I never actually got the deal under contract.

Third I will attach what I use as an assignment contract. Please make sure you realize that you need to make sure with your own lawyer whether this contract can work in your state or in your situation.