All Forum Posts by: Dave Passey

Get to work immediately on your buyer's list. Get a few thousand people on the list. 

Learn how to be an exceptional communicator. Learn how to really listen to people and read the things that they are not verbally saying. 

Become an expert negotiator. This will help you when contracting houses and when selling to investors. 

Find a title company that will be able to do assignments and double closes. Establish an excellent relationship with them. 

However, above all, Be Honest. You will get a terrible reputation if you are not honest with sellers and buyers. Make sure that the sellers know that you are going to be selling the house to someone else and making money on it. Transparency will be your friend when an issue arises and you can explain what is going on with the end investor and why it is going to take another week for the property to close. 

Yeah, there is no "right way". That is one of the beautiful things about real estate investing. So many options. Remember, these guys want to work with you because you are the one with the proven track record. You are the expert. As long as they can know what to expect on a given deal and you are able to consistently follow through, they will be happy. 

It sounds to me that when you are putting in 75% of the effort and not getting 75% of the reward that you are essentially undervaluing yourself. Simply bringing the deal is a huge portion of getting things done and should be fairly compensated for. 

At the end of the day it will need to all be determined with the comfort level of you and your investors.

I would say to take it case by case. It sounds like they trust you and that you have a track record for success. I think that you could use any and all of the those options at various times. It all depends on the deal type and what you are comfortable handling at any given time. 

If you currently have a lot on your plate, then charge them a fee, let them handle the rest and you still make money on the deal. Congrats - you just became a wholesaler.

If you want some buy and holds then go for 50/50 ownership (or some other ratio). I know a guy that gets 50% ownership without putting any money in because of the agreement that he has with his funding partner. Don't feel like you have to put up cash to get an equal share. Maybe you arrange and handle the management of the property. 

If you have a good deal and want to flip it and keep it all to yourself, then don't feel bad about using the money and pay them interest. Congrats - you just found your first private money lender.

The point is, depending on what you have going on at the time and what you feel like you can handle will determine what is the best course of action for you to take at any given time. It seems like you have an awesome situation in front of you with many options. All of them are fair and legal and will all have a spot in your funding options "toolbox".

 Well now you have a written record that you are planning on illegally trying to get them out. 

@Deangelo Mack

On those websites it let's AN agent know that you are interested. That agent is then going to try to represent you in the purchase of that property. Sometimes it does show the owner's direct information if they put in on there. I think most of the time the owners just don't really know how to do it correctly. 

Getting funding if you are going to try to get your money back out. The rehab work is not really anything unique.

Source: Remodeled a mobile home 2 years ago.

If it is For Sale By Owner then there won't by an agent.

You are probably going to feel all sappy for them when they don't have the rent check on time this month because <insert any valid or ridiculous excuse here>. Being a landlord is tough enough as it is and you have those safeguards in place so that you don't have to have it be tough on a day to day basis. Make the tough choice now and go with someone else. It will be infinitely harder when you are at their door on Christmas Eve with the Sheriff to kick them out. 

It will be a new loan. Most people will use different lenders for the flip stage than for the refinance stage. In this case, a new loan would start when you refinance. You refinance for $72k, they pay themselves back the $40k they borrowed you, plus interest, points, closing costs, etc, and they cash you out the $32k minus their deductions.

There are some lenders that are willing to do the whole process with you. They will do the same purchase criteria you laid out above (or may even be willing to finance the repairs for you), and then will refinance for you when the time comes. My guess would be that it would start a new loan, but I know that there are some loans that can convert over into a different style later on and you would want to ask your lender about that because there are probably a lot of various criteria for things like that depending on the financial institution. 

One of the big things that you need to calculate into your formulas is higher vacancy rates. Small towns like that might get some good long term tenants, but when they leave it can be harder to fill the spot. I don't personally have any rentals in a town that small but a friend of mine has some in a town of about 2000 people. That is the biggest difference that he has noticed when we have talked about the rentals.