All Forum Posts by: Steven Leigh

Thanks @Chris Boyd. When you say you are transparent with the seller, can you give me an idea of how you describe the process to your sellers? I'm on the fence about how much and how little to disclose to the sellers.

When you wholesale contracts, do you generally take all contracts to closing and get paid at closing, or do you have the buyer pay your fee before assigning them the contract. I've heard both options touted recently.

I suppose the benefit of the former is that the buyer doesn't know what your actual fee is, but is just negotiating with you on their purchase price (which includes your fee). The benefit of the latter is that you don't need to be too involved in the closing, and here in Ohio where it's getting legally murky about whether wholesaling is legal, I think some of the Ohio wholesalers are doing it so that it's very clear they are selling a contract and not a house.

What's your opinion? Which do you do, and why?

Thanks everyone.

I'm considering a flip where the seller is willing to do seller financing. It's an investor who bought is really cheap but doesn't have time to rehab it for a while, so they are considering selling with a little markup. They are asking $55k, and the terms they've mentioned so far are 10% down, and that they will do interest only.

Can you give me an example of what that structure looks like? What would my payment likely be? What interest rate do you think they will expect? Since I've never done a seller financing before I really have no idea how this would work. Obviously I will get more info from the seller soon, but I want to have a better idea going in.

Also, what other closing costs, fees, and other costs in the transaction should I be planning for?

Thanks in advance for your help.

@Paul Amegatcher

Thanks Paul, that's very helpful. I had done some looking on Zillow. I know the home value estimates can be all over the place, but do you think their rent estimates are generally accurate?

Wow! Guys, thanks so much for all this amazing info. It's very educational. I knew there was a lot I wasn't considering and this is giving me so much food for thought.

Some follow-up questions:

1. What is a good way to figure out what the property will rent for? Call up a property manager? How do you research that?

2. How can I find out what the taxes will likely be? Where can I research that?

3. Mike, you mentioned doing a cash out refi. Can you give me an example of how that works? Would this be through a bank usually? What are the costs involved, what does the lender look for, etc.?

Thanks again, guys. You are too kind.

Thank you Paul. That helps a lot. Is this just for flips, or would you apply this to rentals as well?

I started investigating this deal as a learning exercise, but now I'm actually considering it as my first deal. Please give me some help in analyzing it.

3 bd/1 ba in a suburb of Dayton, OH Probably a B property in a pretty quiet, family-friendly neighborhood once renovated.

It sat abandoned for a few years, was a rental before that, and was a bit trashed. Investor bought it in foreclosure for about $33,000, but had too many houses close at once and doesn't have time to rehab it. They put it up for sale for $55,000 but if it doesn't sell, they will eventually rehab and turn it into a rental. They will do owner financing.

One estimate for repairs is about 12k to 15k, but I'm figuring about 20k to be safe. I can do most of it myself, but may need to hire out a little too. I can list out the types of repairs later, but for now let's assume $20k is a safe estimate. (Obviously I will get serious estimates before going forward.) I think I can borrow the repair costs from family or a local lender.

Other homes in the area have gone for about $90-100k recently.

So here are the options I'm considering. Please weigh in on both if you have time.

A: Renovate to selling quality for 20k (maybe less) and put it up for sale with a realtor. Assuming it sells for $90k, what other costs are involved, such as closing costs, taxes, etc. that I might not be factoring in? Do you think there is enough margin to make money?

B: Renovate as a rental, maybe I can do it for $15k with good materials, but not high end. This will help the margin, but obviously I will have to pay the payment for the $55k, plus pay back the repair costs over time. I think it would rent for $800-900 a month. How would you calculate whether this would work as a rental? Please be as detailed as possible. I'm very new to this.

Thank you greatly in advance for your time and attention.