All Forum Posts by: Michael Olesky

Hey @Stephen Talaber ,

Here is another conversation about securing your position in a joint venture.  You'll want to find out from a lawyer or local investor what paperwork is standard in your local area.

http://www.biggerpockets.com/forums/48/topics/104807-joint-venture-strategy-advice

Hey @Tyler Burnett - i don't know your area so i can't speak to the property details.  My first thought is to keep looking, seems expensive for a little house but depends on what it will rent for.  Also, I'm not a fan of the 2/1 but that is somewhat tied to your local market also, i would still avoid them.  At first glance with the 1% rule of thumb, it is listed at 97k, so if it doesn't rent for over 1k then you need a big discount or to keep looking.  As well as the rent, you want to nail down a rehab cost, you have some potentially expensive repairs listed.  

Under the analyze tab at the top of this website there is a rental properties calculator that is helpful or search the fileplace under the resources tab for spreadsheets.  Spreadsheets make sure you are looking at all your monthly costs!

If you haven't already, read through the this deal analyzing article. http://www.biggerpockets.com/renewsblog/2010/06/30...

I don't know your knowledge level so if you are just getting started, take the time to read and educate yourself on the math so you can be comfortable with what you buy.  No need to rush, you are better off missing a good deal than buying a bad one in my opinion!  

Also connect with some other folks on this site that are in your area.  They can give you all the specific concerns and details of your local market.

Best of luck!

-Mike

It's hard to say what his intention was with that sentence without seeing the whole email for context.  I've worked in the IT field for 15 years and I've learned not to read into emails because they rarely mean what you think.  And then again, some people are jerks and can't help themselves when behind a keyboard.  

I think he was just setting up his pitch for his creative financing.   Since his proposal doesn't work for you, i would just respond with that and not address his sentence about your profit.  

However, If he had already said he wanted it and I thought he was my buyer I would reply with something like:

"So I'm a bit confused, I thought you wanted the house, are you saying you don't want it for $50k?  because i already told a few other interested investors that it was already taken so I'll want to contact them ASAP if you aren't buying it.."

It's either a deal for the rehabber or it's not, but your profit doesn't factor into it in my opinion.

That is close. We still don't know if it is a good deal with those numbers though. You said the market value is 100k, so that is what it is worth in its current condition, but what is it worth when it is all fixed up, which is the After Repair Value (ARV)? how much will it cost to rehab it so it will sell at that ARV price?

If your friends house has an ARV of 80k and needs 20k in work, then it isn't a deal at 51.5. But if the ARV is 120 and it needs 10k of work, then it's a wholesale deal at 51.5.

You are correct in that you can write the contract to say i'm buying the house for 51.5k, taking over your loan of 30k and giving you the seller the difference of 21.5k in cash. That would be buying subject to the existing mortgage. Unless the contract is written differently, the purchase price on a contract is the price the buyer pays, the mortgage gets paid off and the seller gets what is left over.

I'm with Paul, if he's under contract to buy it for 51.5 then that is what he is paying. Escrow takes the 51.5k pays the 30k mortgage and gives the seller 21.5k. The only way to know if this is a good deal is to know what the ARV is and the rehab estimate. The mortgage balance is irrelevant to your friend. Are we missing some details? It almost sounds like you are saying he is giving the owner 51.5k and taking over the loan sub2?

how about neighbor's kid practicing the tuba?

this is going to be even more suspenseful than Brandon's bird in the wall thread!

I think that is the right call @Kimberly Anderson Just like any other business, you have a way that you do business that the customer needs to conform to. My explanation to her would simply be "we use escrow for all transactions to protect all parties, if you the seller won't agree to use escrow then I'm afraid I'm not your buyer. However, if you are fine with using escrow then lets get the paperwork started and escrow opened so I/my investors can purchase your house."

Keep combing through those leads, you'll find a good one!

@Kimberly Anderson

Without making any assumptions as to the sellers intentions, the situation as I see it is she wants to sell the house for 50K cash just before leaving the country and she doesn't want the transaction to be handled by a third impartial party (the title company).

Being new myself, if I were in your shoes, I wouldn't do anything without escrow just for the reason that a title company will alert you to any pitfalls. If everything is legit, she shouldn't have an issue with it.

You need to find out what her objection is to using escrow, if it has to do with closing costs, write your contract to say you will pay all closing costs which you will pass on to your buyer.

Quick way to end your wholesaling career before it starts would be to pass a major issue on to your buyer.

Keep us posted on how it goes!

Mike

You have results or you have excuses!

It has always surprised me in my day job, most people I've worked with, worked on a project or solving a problem for 8 hours a day and then they are done until tomorrow. I've always had the mindset that I'll work until the job is done, or I need a quick nap!