All Forum Posts by: John Klahn

http://www.biggerpockets.com/real-estate-clubs/washington.html

Nick,
I understand your hesitation and your fear, I've been there too as I'm sure many others on BP have been.

Seriously though, if this property has that much profit potential, please just have your agent submit a contract to buy as soon as possible. Be sure that the contract has an inspection contingency clause and you will buy yourself 7 days to figure everything out.

If you get the property under contract you can easily back out of it with an inspection objection within the time period that you spell out in the contract, 7 days is somewhat standard.

Once under contract, I would get on BP and let everyone know what is going on and ask for advise, and then head down to Seattle or Bellevue and attend several of the CREI club meetings and try to get up in front of the group and tell them the details of your deal. If it is a great deal, there will be someone there who will pull you aside and get this transaction done with you. You should be networking anyway and these clubs are a good start.

How confident are you on the ARV and rehab costs? Do you have a good agent who is responsive and can verify the ARV?

Cheers,
John

Anthony,
I have to agree with Curt. A real POF and less contingencies. My offers usually have only the inspection as a contingency and are cash offers.

If you have a good relationship with someone who has a decent bank balance ask them to pseudo-partner with you so that you can get a legitimate bank statement as a POF. You can have them write up a short, non-binding letter that says that you are partnered with them and have permission to purchase real estate with their money. I've done this, it's no big deal, and I've gotten properties under contract doing this.

I am with many of the folks who replied with the belief that POF from HM lenders are viewed as a joke now days. Just like Eric said, I think that they want to see a cash balance.

Cheers,
John

Nick,
I would call, email, and text my real estate agent right now and have them write up a contract to be submitted today! If you are certain that there is that much margin on this property the first thing to do is to get it under control (e.g. have it under contract) as soon as humanly possible. Denver properties like this never last more than 4 hours - seriously. Point by point:

- Property is listed REO
go call your agent!

- Don't have offer on it yet (would like to make an offer asap)
see above (you shouldn't be reading this far into the reply unless you've called your agent

- Do I need to set up an LLc to buy it?
you don't need to set up and LLC to buy it, if you are planning on making the offer in an LLC then you can just make a very unique name and check the Washington Secretary of State website https://corps.secstate.wa.gov/llc/pages/startpage.aspx to see if that name is taken. Have your agent use the name of this non-existant LLC on the contract and when it is accepted then you can set it up for $180.

- What kind of funding to use? Hard Money, Transactional Funding.
Make your offer a cash offer with no financing contingencies. Banks like as few contingencies as possible, in my experience. If you make the offer in your name and you end up wholesaling it you will need to get transactional funding to do the double close.

- (Who would you suggest)
Search the forums for this. I only use local lenders who don't lend outside of Colorado.

- Right now I don't have $500 to $1,000 for earnest money
In my experience when you make an offer on an REO you won't need deliver the EM check for about a week or 10 days. If this deal is as great as you say it is I would beg, borrow, (but don't steal) the money. You can get the money. Alternatively, if you find your buyer or, better yet, have one already lined up, they can front you this money.

Cheers,
John

I've been in situations like this with renters - more so in the last year since unemployment rates went up. It's a real pain and it is really hard to 'read' the tenant to guess if they are sincere or just looking for free housing.

I'm sorry that this is a little late but with your situation I think that it would be easier and cheaper for you to give them the 30 day notice that the month-to-month lease will be ending. In my case, it costs me $250 to get an eviction started and then, if I actually get to toss them out, the sheriff makes me bring 15 guys on the day of the eviction to move out all of the tenant's stuff (I have to hire day laborers for this). So, I'm now into the eviction for about $400.

With the amount of rent you charge I would just end the lease and keep there security deposit for back rent.

Best of luck. Keep us posted on what you do.

Cheers,
John

I find a lot of value in having folks give their thumbs up/down on topics that they have experience with. Just a quick "that's being my experience too" or "I too have used this company's service and agree that they are great". For me, it adds weight to the answer that is being formulated in the post. I hope that makes sense.

Cheers,
John

I am a little curious if anyone on the forum has tried lead generation services like PropertyLeadsNow.com. If so, what has been your experience? Good leads, waste of money?

My suspicion is that they are probably not nearly as lucrative as doing the marketing yourself.

Any thoughts?

Cheers,
John

Kim,
Congrats on thinking of a great way to build your buyers list! I wouldn't write off the MLS as a method of finding cash buyers. One thing that I am currently doing is having my agent send me a list of the last 6 months of MLS sold properties that were recorded as a cash transactions. If you have a good RE agent they can give you this list with minimal effort.

Also, in my state (Colorado) finding the owner of a property can be a little tricky if an entity (LLC, etc.) is on title. Many times the LLC is set up by an attorney and the name and address that you will find by looking at the state business records is that of the attorney's office. If the owner is a Trust then you will have a really hard time (impossible?) finding the owner - at least with how trusts are set up in Colorado. To my knowledge, there is no document that needs to be filed with the state which gives the contact info of the beneficiary of the trust. You will find some percentage of the assessor's data will fall into this category. It is definately worth pursuing, but I would have your agent pull some MLS data for you as well.

Cheers,
John

I agree with the other posters. It's difficult, especially if you have little experience, to work real estate investing with no money or job. A couple of suggestions:

1) Hook up with a reputable Creative Real Estate Investor's club (CREI) and you will be able to pre-qualify your team members and they will be accustomed to investors in your situation. This is how I met my attorney, CPA, and real estate agent (among others). Some will give out a limited amount of free advice.

2) I would find at least a part time job. Consider getting a job at company that will dovetail with you real estate investing. Look for entry level (secretarial, errand, etc.) positions at title companies, real estate companies that work with investors, or see if any big time RE investors are hiring. You can get paid while you learn. (btw - I have a full time job and do fix and flips and rentals and I'm revving up a short sale business as well)

3) Ask around at the CREI about whether or not flipping makes sense in your area. My area is still considered a down area but you can make money flipping houses. You just have to buy at a bigger discount and sell a bit lower than your competition.

I hope that helps a bit.

Cheers,
John

How about one of these:

urbanrei.com (incorporates your surname) rei=real estate investing

rei-school.com

You can go to http://www.networksolutions.com to see what names are available (both of my suggestions are available). It will also give you alternate and similar URLs if the one you request is not available. I have no affiliation with networksolutions.com.

Best of luck!

Cheers,
John