All Forum Posts by: Michael Hicks

I have a similar situation though not a friend. One of my partners puts up the money for the flips and I manage the flips. We had an attorney draw up an LLC and write up the partnership agreement. The difference in lending vs partnering in my opinion is that my partner assumes half the liability where a lender would not share that risk. If we lost $10,000 we would split that loss. If I lost $10,000 and had borrowed from a lender then I would be out $10,000...if that makes sense. I work with several "partners" and each is handled a different way. Some just lend money (which I prefer) and others want to split profits. Even when they put up all of the money, I would not take any less than 50% of the profits. Don't discount your importance in the deal. Without you, they wouldn't even have the opportunity. Good Luck.

In my experience, I have always received the check at closing.  A check is issued to the mortgagor for your mortgage and the difference to you by cashier's check.   Not sure why it would be done any other way.  Maybe others have a different experience.  

 All of the ones I've looked at have a 5% buyers premium or $2500 minimum added to the sale price.  It's stated on the right hand side of the page just below the picture of the property.  That's different from the $2500 hold on your credit card.  Be careful.

There is also a $2500 minimum auction fee that hasn't been discussed here.  I haven't had much luck with auction.com but it can pay off with persistence.  

 That's your best bet.  The only thing I might do different is use 1/2" backer rather than 1/4".  The 1/2" will be even the same thickness as the drywall and gives a better look in my opinion.  

 Sure, like some others have said...just ask.  The worst thing they can say is no.  I have purchased the homes next to homes I've already owned just by standing at the fence and talking to the neighbors.  After I find out they are wanting to sell, I usually say something like "I'd love to buy your home but I have all my cash tied up in this property.  Are you willing to carry a note for a few years?" I don't act desperate but state it more as a matter of fact.  I usually don't ask for long term financing as I usually flip.  If they say yes then I lay out my offer and explain it to the seller.  It has worked really well for me and I have made several deals this way.  It may not be the best way but it has worked more than not.  My best owner finance deal I had contacted the seller to let him know I was interested.  I didn't hear anything for 6 years and he contacted me one day out of the blue.  I wasn't desperate and the house needed a lot of updating.  I told him I would give x amount at 5% interest with no money down and no payment for a year with a five year balloon based on a 30 year amortization.  I explained to him that it would take all of my reserve to update the home over the next year.  To my surprise, he said ok.  Build rapport with the seller.  If they like you and trust you they are more willing to work with you.  This deal is certainly not the norm but they do happen.  Hope this helps.

 Experience.  Not with my realtor but going directly through the sellers agent.  It just seems to me that the agents don't even want to present an offer.  Like someone else said, most realtors don't understand how to explain seller financing to their sellers.  Just my experience.  

I've never wholesaled a deal as I try to keep them for myself but you are starting off the right way by wanting to be honest and upfront.  There is no need to lie to make a deal.  It will catch up with you and you won't be in business long.  I want those I've purchased from to refer me to their friends in the future.  Keep it on the up and up and you will be fine.  Good Luck, Mike

@Adam Morgan, congrats on the buy and seller financing deal.  It's been a while since I've been to Athens for more than just a ballgame.  Could these units be used for student housing?  

As far as flooring goes, I like to use a laminate in my living rooms/hallways, loose lay vinyl in kitchens and baths, and carpet in my bedrooms.  I try to lay it out where I can pull up and replace one piece of carpet, vinyl, etc. and replace without having seams.  That way I dont have to replace all of the carpet if a piece is ruined by a tenant.  

On to the cabinets.  It's hard to find cabinets built as well as the ones you have now.  What I like to do is remove the doors, sand down the face of the frames, and paint white.  I have my cabinet guy build new raised panel or shaker style doors out of 1 piece mdf.  Usually it costs me $500-$700 per kitchen and it gives an updated look with hidden hinges.  Add new counter tops and your done.  With the size of the kitchen you have pictured, it should be even less.  

Good luck.  Post after remodel pics when you are done.  Best Wishes, Mike

I would advise you to find someone in the area of real estate you wish to work in.  Work with them for while learning the ropes and save up some money.  You will find it difficult to borrow OPM with no experience.  Get a few deals under your belt and then start looking for OPM.  Just my opinion.