All Forum Posts by: Itay Heled

Hi BP members!

Here is a short story with a  key question.

I am based in Toronto and invest in few rehab properties in  Kansas City MO.

Since I am  far away, at certain point I start using the local  real estate agent I was working with  as my ``boots on the ground`` . he got nice commissions  when I bought a property,  nicer commissions when I sell , even offered to pay him some percentage of net profit in the back end to supervise rehab for me . 

I was planning to do 10 flips per year and was working exclusively with him.

I thought to myself : 

I can trust him . After all he works with Keller Williams. seems like a connected  experienced  guy who knows the market, and above all,  he has all the reasons in the world to make things work, do a good job and make me happy. 

I was dead wrong...

At some point agent  encourage me to work with a contractor he ``knew for years and trust 100%``. I followed his advise and sign with them to rehab two properties.

 As soon as I  sent  $50k for the renovation contractor pretty much disappear.

later, contractor confess in writing `that agent asked them to use my rehab funds for his own rehab properties, promise to pay it  back when he is done and fail to do so. (that is at least the contractor version.most likely they commit the fraud together). 

needles to say,  I didn`t see any of my money back and had to sue them.

Now, my question moving forward is this:

If I am to get into a JV on rehab with a local partner (as cash investor) , how can I protect myself from similar scenario?

Thanks!

Itay

Karla

Depending on the area but

Sarah Jo Brown from platinum is the real deal.very connected 

and helpful. Stay away from Raphael Johnson from Keller Williams .he pretend to work with out of state investors.dishonest scam.he defrauded me .

Good luck

Dan,

Yes, renting is always an option but last resort in my case:

As a Canadian refinancing of the property is limited - best case scenario I can get 65% LTV with pretty high rate. this means a lot of my money will be "buried" in the property. my understanding rent I can get is around $1100/1200 so not so great in terms of cash flow. add the fact I am far away which means extra costs in property management and often repairs of such old house will be higher. so bottom line selling still seems the best option unless price I can get really sucks.

Hi Melissa,

yes I reduced the price to 155k few days ago

John,

Thanks for your message, yes it is not a bad idea to look into this. I have about 50k of private money invested in the property but it is free of mortgage . I have been doing rent to own here in Canada So I know the benefits and the risks but  not sure about the protocols, legal  and costs involved.

However , there are few big disadvantage:

1 I was hoping to use the funds for future  investments

2 it is an old house  and  I am not around. which means  I often pay more for repairs  and unfortunately some contractors taking advantage of you when you are an out of town investor. sad but true. of course I can always  use property management but of course this is an extra cost.

but thanks for raising those options, I guess  Ill have to see how low i need to go with the price first and then re evaluate renting /rent to own /owner financing

Julie,

thanks for your feedback . house is not rented. I pay carrying costs out of pocket 

Thanks Brandon  that is very helpful

Dear Bigger Pocket members!

would love to get your feedback and suggestions regarding a house I am trying to sell unsuccessfully  since October 2015 in Harrison street Kansas City Missouri.

here is a  brief summery..

I purchase the house On May 8, 2015 for a flip. A local real estate agent "sell" it to me as a great opportunity in an "up and coming area". turn out to be a horrible deal. ARV he stated was

inflated ,house was over priced , in a much worse condition than reported & in a problematic location (including a next door neighbor with a yard that is a complete junk ,hence  scares away a lot of potential buyers before they even enter the house. ) 

just to add more to the fun, this great  real estate agent and contractor defrauded me and use  rehab funds I sent for other projects.. the ultimate flip nightmare... 

Anyway, now I am in a control damage state, trying to minimize the damage and loss.

 I  invest a lot into the rehab - new floors, new windows new kitchen  with stainless steels appliances- new bath,  full rehab. 

On  February, after very little interest and  limited  number of showing I replace the  listing agent and  hire Reece Nichols agent to list it.  their marketing was pretty effective and I got about 20 showing in two weeks. but still  no offers. last week,  I reduce the price by $5000 and offer a bonus to buyer agent.  still no offers.. 

My question is this: 

Other than reducing the price even more, is there anything else I can do to promote and close this deal? 

Thanks so much for reading this , and would love to get your advise.  

To get a better sense  of the house you can look at the listing in  link below:

http://tracyksearles.reecenichols.com/homes-for-sa...

MLS# 1976950

Hello,

I am looking for a reliable handyman in Kansas city MO

Any recommendation? 

Thank you so much Dawn! sounds like a good advice. I will contact Larry