All Forum Posts by: Tom McGiveron

don't pay any broker a dime up front - that's stupid. just word to the wise.

who the hell did you meet?

pay him up front?

first of all - if he's a buyers agent - meaning he will represent you, the buyer exclusively - the selling agent pays his commission.

for every listing through a broker - there is an automatic split - for instance, at X real estate brokerage - they have a minimum that they'll take, say 3%...then when the get a listing, they'll take a 5% comission, offering 2% to agents bringing a buyer.

forget this guy you met. do not give him any money whatsoever.

the most you should have to do is sign a buyer agency agreement - which is an agreement between you (the buyer) and the broker...

most brokers have sales agents who get listings/clients...clients are considered sellers or buyers that sign exclusive agreements with a brokerage. this is a contract which brokers use to assure they get paid.

signing a buyer agency agreement is in your best interest because the agent then works for you and owes honest and fair dealing to the seller...but he/she works for you, on your behalf.

you see - you've got to understand how realtor's do business. this guy sounds like a schmuck. move on.

the appraisal for the bank is paramount.

also - i'm just going to throw a number out there - IF this house is "worth" 810k - and "worth" means WHAT THE BUYING PUBLIC WILL PAY - aka market value -

then for me, personally, i would not pay a dime more than 700k MAX for the property in order to have a smooth assignment and i stress the whole market value thing very much.

people like to throw numbers around, but they have NO IDEA what market value really is. they just think they know.

now in my local market - if it was worth 810k 9 months ago - it's now "worth" the same amount right???

WRONG - the value of any home is dictated by the BUYING PUBLIC.

today, in my market, i wouldn't contract a 810k house for a dime more than 600k. this would afford me a very smooth transition most likely - with buyers jumping at a price of say 720k, and because i contracted it so low, i can play with the number, heck all the way down to the mid 6's...and still make over 45k.

so it's time to find those hot spots huh...if you haven't already.

don't waste your time trying to learn about land trusts...

they're just over the top - in my opinion - for a noob to try and learn and implement. they're ridiculous in terms of trying to explain to a seller how you want to proceed - especially when you don't know what it is you're doing to begin with!

no don't buy a house you're planning on living in through a corporation.

i actually saw one of those episodes where the guy doing it really was on top of his game. it was the one with a young guy who knew a bunch of his buddies and they were all helping him.

he did a great job and things he said were very spot on...

the only thing i could see that "changed" a bit without being pointed out was that in the very beginning of the show - he mentioned a 250,000 profit...

by the end, it was 140,000 - after the property was appraised.

he bought it for i think 500k, lived there for 2 years...did 35k work to it and it appraised for 675,000 [and they didn't show him selling it, just showing it - then the show ended].

minna - hope all goes well man - what was your profit margin at 12k for the rehab?

well you're enthusiasm is great - hope it's contagious!

:lol:

you might consider getting your real estate sales license.

just don't talk or think too much about doing it - research the costs, talk to a few brokers/sales associates and go for it.

it's a good way to start because you don't have to buy anything, you don't need any credit - the only thing you'll need is some money to take classes, pay the state for your license and pay a broker for insurance and other associated fees.

you can then start working with investors - possibly as a buyers agent - they'll take you serious - seeing a young hungry real estate agent looking to mix it up.

you'll learn so much from being an agent and you'll also make some money (hopefully).

whatever you choose - stick with it. don't get discouraged.

start building your credit - even with a $250 limit. you've got to start somewhere.

learn about cash flow, financial statements, start managing your own personal finances. read Rich Dad Poor Dad by Rob Kiyosaki

also read Walk like Giant, sell like a madman - by ralph roberts - it's a little dated but good.

oh and go to your local library and take these out either in book form or audio/cd. listen in your car.

meet with a CPA - go over the tax deductions you're entitled to once you start, like mileage, etc.

good luck!

Simms,

what you're running into is quite possibly what one lender requires.

like MikeOH said, there are many ways to finance the purchase of real estate.

different lenders have different standards.

basically though, many will follow the Fannie Mae way of loaning money - in order to be in compliance with them so that they can turn around and sell the notes, hold them or do whatever they want with them. following certain guidelines for whatever type loan provides the lender with multiple options. many mortgage bankers follow specific guidelines in order to sell their notes, like right away.

if you decide to use Hard Money - you'll have much more flexibility in terms of being able to put less down, invest in different types of properties and present your investment strategy, rather than just the property itself.

what i'm saying here is, if you buy a house and use Wells Fargo - they're not going to be concerned with something like the ARV (after repair value), whereas a HML might loan you money based on that - which grealy enhances your investment options.

i know that doesn't make sense right now, but with a little research - you can come to understand the old saying:

there's more than one way to skin a cat...

being new, just be very cautious what you get yourself involved with. note that i'm not advising you either way and if anyone does, always always always double and triple check what anyone says with your CPA and/or real estate attorney...

keep in touch.

as far as not needing "any money" to wholesale - in new york for instance - a real estate contract is considered void if there is no consideration in the deal. now whether or not the consideration could be a note for 1000 for earnest money - best speak to an attorney about that - just to be rock solid with your offers - i think putting some consideration in the deal is better than nothing. heck, even $100 could be the consideration - but again, check with real estate attorney...