All Forum Posts by: Mark Bookhagen

It is a numbers game. The leads you have the better. Wholesalers will have access to leads that don't have. It can't hurt. They may not need much rehab in certain cases (estates, divorces, etc.). Cast a lot of nets and you are bound to catch something good.

Definitely don't get an agent involved. The seller will not want to pay them. That's why they are selling to you. Contact your real estate atty. They will work with the seller's atty to get a contract together. Make sure you have agreed on price and terms. Let your atty know of your contingencies.

Are you sure the market will bear a $100 increase?

Pictures, pictures, pictures. Repair, save receipt, deduct actual repair cost from sec deposit. Then send receipt (copy) with letter explaining and any remaining funds or an invoice if the repair was greater than than the security deposit. Write a log of what happened and when. Be detailed. Pretend you are making a packet for a judge. Document everything and keep it in a safe place so if tenant tries to take you to court, you will be ready. Also, use a check (not cash) so you can prove you refunded it. Use certified mail and make sure you have copies of everything you send to tenant. Get a copy of the cancelled check too.

Pictures, pictures, pictures. Repair, save receipt, deduct actual repair cost from sec deposit. Then send receipt (copy) with letter explaining and any remaining funds or an invoice if the repair was greater than than the security deposit. Write a log of what happened and when. Be detailed. Pretend you are making a packet for a judge. Document everything and keep it in a safe place so if tenant tries to take you to court, you will be ready.

Sharon Tzib is 100 percent right. Do the math with a mortgage and your cash on cash returns will be much much higher. That's leverage at work. One of the key differentiators in real estate is that you get to use leverage. Leverage is what makes money. You get a return on on an asset that is worth 4 times (25 percent down) the amount initial outlay instead of a return on the initial outlay alone. With $6k in remodeling costs, I don't think you will have a problem with getting a conventional mortgage because the property seems free of major defects at that remodeling cost.

Most any bank would do a conventional loan for that property with 25% down.

Make sure their contract doesn't have any clause in it that would make you pay them a percentage of sale when you decide to sell. If they do have it and won't take the clause out, find another company.

The numbers look good to me. As you said, inspection will be key to make sure there is not a major issue. If you are bold, you can ask the tenants during the walk through if there "is anything they would change" about the house. Be friendly, and they will give you an honest answer. They are usually willing to tell you the truth because they want the "issues" fixed if there are any.

Ask the husband's for the wife's contact information. She may just not want to listen to HIM. She may listen to your logic. Be ready for an emotional call!