All Forum Posts by: Justin Pierce

1% of the purchase price is fairly customary for a deposit. There's really no set rules, though, and that custom is more for an actual seller not a wholesaler. I would certainly not pay anymore than say 25% of the whosalers total finders fee.

Its hard to judge if you have a good wholesaler until after you've done a deal or two with them. It seems like everybody is calling themselves a wholesaler now and its really muddied the water.

I really wish you the best of luck. However, it does sound like you have a pretty good deal on your hands. Ohterwise it wouldn't be worth this much heartburn.

Yes, actually that is a good point and almost a third option.

I have a log cabin in Utah that I was having trouble financing and the local credit union did it without blinking. It was 70% of value and they kept it in their protfolio but they got it done pretty quick and painless.

Sorry,

I didn't read the entire chain before I posted. You are already beyond my answer. Ah... anyways good luck.

A good wholesalers is very valuable but they are very hard to find. I find it is very difficult to get a straight answer from most of them. Once one of them brings me a property I opperate almost as if they weren't there. I ask them questions but I put very little value to it. Like everything else you have to verify for yourself.

I don't necessarily think the nonrefundable deposit is a big deal. The wholesaler is committed to the deal at this point so they want to make sure you are as well. Provide yourself a short time period to conduct your inspections but beyond that the deposit is there to provide assurance. If he doesn't want to give you time to do your inspection then do your inspection before you contract. As long as its a reasonable amount and its a good enough deal don't let the deposit stop you.

We are in the business of risk. No matter what anybody tells you.

Even if she is required to give it to you its fairly irrelevant. The question is what are you going to do to compell her to give it to you.

Even in cases where the law is on your side the process is such a pain its not worth it.

If your trying to save time then the fastest option is to just pull it yourself. If you want to show here then bring it up with the commerce department or BBB. But, if you start trying to show everybody who does shady stuff in this business you will have no time to invest.

In my experience, when I come across someone shady I get away from them quickly cut my losses, take a deep breath and move on. Unless they are criminally hurting people then I've been compelled to report it. But I've only done that once in a very extreme case and it was fairly painful and very distracting.

Unless you have a real short web site adress the phone # would be easier to get on the sign. Numbers are easier to read and what people are expecting to see. Also, believe it or not there are still a lot of people who don't like computers.

I would stick with a phone number.

Problem:

Your plan is too long. I don't have that kind of attention span. I need pictures or something if it’s over a couple paragraphs. I'm just kidding.

To be honest, it is very generic. Anybody can say they will buy one property every six months. I would give a little more detail as to how you will purchase the properties. Everybody wants to know if you have money or at least assets. If you have money in the bank from these investors and partners it might be nice to mention that and how it will be allocated. I assume the business plan will be for lenders, investors, and sellers. These people want to know they are not dealing with dreamers. Besides money you can list other assets, connections, experience, etc.

Your mission statement should say who you want to be, doesn’t have to be who you are now. It can be lofty. It should try to set you apart from the competition. Make it your, "I have a dream speech."

I don't really like the Buffet of real estate thing. I think most people will roll their eyes about that. You can outline a plan to show how intend to grow quickly by bringing in investors, partners, JV’s and through savvy acquisitions or something.

A real breath of honesty and a demonstration of your market savvy would to be to add a SWOT analysis. Simply state your Strengths, Weaknesses, Opportunities, and Threats. Investors want to see that you are looking at the dark side as well.

Good job, the vast majority of investors don’t have a written business plan.

That's a real mess. One of the problems is that the previous owner is really needed to expidite that process. In this situation the previous owner certainly is not going to be in much of a helpfull mood.

Put pressure on the listing agent, like Anson said. He/she is the only one really standing to make money on this. The REO Managers are a pain at best.

Bottom line, foreclosures and short sales aren't easy. I always tell my clients that but they don't believe me until we waist our time and then say forget it and go look for an actual seller.

Take a breath. Look at the deal and decide if it's worth the hasle or not. This is where we make our money.

I suggest you keep this deal on the hook and start looking for another deal. If another deal comes up then drop this one on its back.

Alex,

I did a blog on this subject, sort of. Some of the comments are applicable to what you're asking.

http://www.biggerpockets.com/blogs/296/blog_posts/1561-actual-hud-guidelines-for-flips

Justin Pierce

Here's what the FHA guidlines say:

(b) Time restrictions on re-sales- (1) Gerenal. The eligibility of a property for a mortgage insured by FHA IS DEPENDENT ON THE TIME THAT HAS ELAPSED BETWEEN THE DATE THE SELLER AQUIRED THE PROPERTY (BASED UPON THE DATE OF SETTLMENT) AND THE DATE OF EXCECUTION OF THE SALES CONTRAT THAT WILL RESULT IN THE FHA MORTGAGE INSURANCE (THE RESALE DATE.)

I've heard some people will say that the seasoning can occure once you've recorded an option but don't count on it. Underwriters are being completely inflexibley. Just assume the seasoning starts once your name is put on the title.