All Forum Posts by: Jon C.

I am looking into Hud properties and already spoke to an agent willing to submit offers repeatedly for me. In general, for any listed property, I have read several investors who say they make 10, 20+ offers a day. There's no way all these homes are walked through prior to an offer. Is there some basic formula used to determine an offer that takes into account rehab without actually seeing the property? For example, I've heard some people will multiply the square footage by anything from 10-20 depending on basic observations of the condition to get a rough number for rehab. Any other methods?

Can someone explain why free comp sites are so bad compared to MLS? I like to use Redfin because they show the pics, type of financing used, sales history, and property description from the original listing. What is missing that I need from the MLS?

I know using automated estimates generated by a site is bad ie Zillow's Zestimate. But if I take the raw data of homes sold and do my own averages, what am I missing?

When I'm looking for more cash buyers, I put my basic html ad with my squeeze page link in the 'real estate for sale' section. I always put my ads where I think my target audience will be looking, which is usually not where you're supposed to place them. I haven't had any issues yet.

If my realtor finds me a property and it closes, with my intention to assign it to an end buyer, when does my realtor get paid? Are they paid their 3% from the A-B transaction or B-C transaction?

The numbers I put up were roughly the numbers I was told as an example of this type of deal, with a 5 year term. And apparently it sold to a buyhold investor. This was from an experienced wholesaler.

I have been previously told that subject to deals were good for properties with little equity. You're telling me I need a lot more equity. If the property had that equity, wouldn't a traditional purchase be better? I guess I wonder at what point a subject-to is better than a traditional sale. That's why I want to know what sort of criteria is needed for subject-to rather than traditional sale.

I think I understand the basics of seller financing methods. I know people use "subject-to" a lot but I believe that is one type of seller financing. But there is also lease option and I've heard Agreement for Sale or something similar.

I am interested in wholesaling these deals and wanted to clarify when seller financing is a good strategy.

An example of a deal as I understand it:

House worth 100k. Owner owes 90k at 6%, with payments of $600. Rents in area are $1000. Owner wants $2000 to leave.

I get the property under contract for $92k. I market it for 98k with 10k down. At closing, my buyer brings 10k. 2k of that goes to seller, approx 1k goes for closing, and 7k for me.

It seems to me, for something like this to work, there are a couple things that need to be in place. Please tell me if this is correct:

1. Seller has little to no equity but NOT upside down.
2. Home is in good condition.
3. Mortgage payment less than rental comps(unsure of exact formula)

Am I missing something with all of this?

Along the same lines, I have a question as well.

When looking at sold comps for an area, there are usually two sets of numbers: the fixed up homes and the reo/ss/fixer-uppers. When dealing with sellers, to convince them to sell to me at a discount, should I be using the fixer-upper comps or the upgraded comps?

I am also curious about craigslist and fsbo websites. I've never called either a fsbo seller or craigslist seller.

I have placed "I Buy Houses" ads in the services offered section of craigslist. Unfortunately, I've only gotten one response over a several month period of posting.

Regarding question 2, I should clarify that this would be for deals with private sellers, not the bank.

These may be very stupid qustions but here goes.

1. I understand that "making an offer" on a fsbo can be done however you want(verbal, notepad, whatever) before the contract is written. What about when dealing with an REO? Do you just fax a copy of the purchase contract with your numbers on it or is there some official form that is used?

2. After a contract is signed with the seller and I intend to wholesale the property, when do I give the sellers contract and paperwork to the title company? Do I give it to them right away even if I don't have a buyer yet so they can start the title search and whatnot? Or do I wait til I get a buy side contract completed, then give the title company everything?