All Forum Posts by: William C.

It's interesting how the appraisal was referred to as "awful". It was likely accurate. I would argue the list price was awful. Do people actually make money investing this way? The cash flow on something like this is around 150-200/month. You have to pay 10% over market value, in cash at closing. So at best it'll take 40 months to recoup that. That's assuming zero unexpected expenses or issues along the way. So now that more than 3 years have past we can start making some headway. If it's an appreciation play, it might make sense, but I'm assuming by the purchase price to rent ratio this isn't that type of neighborhood. Correct me if I'm wrong. If prices drop at all, now your really in trouble. As discussed already, the rent guarantee is garbage. The home is newly remolded so of course it's going to rent easily for the first 2 years. Who pays for repairs once that tenant leaves? I sure hope it's the turn key provider. Otherwise their incentive is to put any living breathing person in the unit to start collecting rent with no disregard as to what happens to the property. I'm guessing it works, or their wouldn't be a market for it. Just looking for some input from some investors with a larger sample size of deals like this, and who have been around when the rent guarantee ends, is there money to be made? The last 3-4 years probably saw some decent appreciation, I'd either cash it out now or hold on for the long run because a market correction is coming. Probably not huge, but it's gotta level out.

The two are the same. At least in my market, appraisers are also agents with 20 years of experience and market knowledge. That should probably answer your question pretty easily. Also, appraisers know how to value property. To a certain extent, obviously with some flaws, Zillow can do that for you. Realtors can value property just the same. But as an agent you'll learn how to work with buyers and sellers, as well as be able to offer sellers who want market value an outlet to do so, and you still make money. I could do on and on.

As agent, you can still say" I buy homes", right? I'm an agent and investor but I haven't done any direct mail marketing as "investor" per se. I can't imagine any laws that would prevent stating your interest in purchasing the property. I will say though I would see a huge benefit in being an agent when you do meet with these sellers. Most of the time a wholesale deal doesn't work because the seller simply wants to get market value for the home. Boom. You can help them do that as well. If the home is listed and sits on the market. Now the seller knows the true market value isn't what their market value is and you can make an offer that might be more appealing. I can't figure out why all wholesalers don't get their license. In my opinion most wholesalers are leaving a ton of money on the table by walking away from deals they can't wholesale but would "retail sale" . Plus, as a bonus your not breaking any laws by brokering a deal without a license when you do find a seller willing to take your offer and then you market it to other buyers. Win-win.

I'm doing a similar deal. Why not offer to split the equity gain with the seller when it does sell. Doesn't have to be 50/50. Looks like you are agreeing to 28% assuming it sells at 250k. Who came up with the ARV? 40k difference is A LOT. I'd try to pin that down. A good agent should be able to come within 5-10k in that price range. Win-win. No risk for either of you, no usary laws. To take it one step further we brought the GC on as an equity partner, he does it at cost and gets a percentage of profit. Removes nearly all the risk for seller and investor. Best of luck. Let me know if you work it out.

I'm doing a similar deal right now. Why transfer the property at all? We are saving a boat load of fees by not transferring title only to transfer title again. Although as I type this you mentioned holding as a rental, so it might be different. In that case I'm not sure it matters if the bank "knows the seller", its most likely going to have to be a commercial loan if it's an LLC. With that said, why do you need financing, to purchase? Maybe not transferring the deed at all is the answer. Are you going to renovate to add value? You could renovate then have the seller refinance and put it into an LLC at that point. Iv had sellers do that in the past. Best of luck. I searched "partnering with seller" because like I said I'm doing it on a flip right now and it almost seems too good to be true. It's win- win and there's very little if no risk on anyone for a number of reasons, one being saving 10-15k on closing costs for the first transfer. Best of luck. Would be curious to see how you make it work.

@Caleb Heimsothi actually went back and reread your comment and realized that I probably misunderstood you, then my phone died before I could comment again and apologize.   So with that said, I'm sorry, and my rant wasn't directed at you, but it is a common misconception so I hope it helps clear things up for anyone who thinks no money also must mean no credit.  The 2 are different, and can be conversely related as I mentioned in my example of the millionaire with bad credit.  

Your response is definitely the simpliest way to answer OP and put an end to this thread.

Get a job, and also fix your credit.  

Fixed your post...smiley face emoji

Caleb Heimsoth how would her getting a side job have any affect whatsoever on her credit score? That would help the No money half of the OP, but not the no credit part. People need to realize credit has NO relation to income whatsoever. The 2 are mutually exclusive. A credit score is an indication of how one uses credit and then pays that credit back. That is all. Income is NEVER a factor in your credit worthiness. Income will affect buying power, but never your credit score, ever. In fact here's an example of how the 2 have no correlation at all. You could earn $10,000 a year, have a 850 credit score and accumulate over a $100,000 in available credit to be used on credit cards or lines of credit. Conversely you could earn $1,000,000 a year, and have a 500 credit score and 0$ available on credit cards. If you use credit, and then pay it off, over time, your credit score gets better. Over time you can increase limits. Simple. Borrow , pay it back, repeat equals good credit. Borrow and fail to pay it back, no matter the amount, bad credit. If you use credit and miss even 1 payment, your credit score is negatively affected, no matter how much your earn or have in the bank. Or, if you have bills that's go unpaid like cable or electric or medical bills and they go to collections, that has a negative affect on you credit. I could write a book on how credit works but I'm sure it's been done before and the internet is free so google it. Everyone needs to know how credit works. Learn how your score is determined, and then you can use that to increase the score. It's a very simple concept if you just use it correctly, spend within your means, and ONLY borrow what you can pay back. My last point on credit is going to be credit is like bone, and it's broken right now, it can easily be fixed over time. You need to learn what put you there, get help, learn how to make it better, and give it time to heal. Time is the best thing that can happen to a late payment or a bankruptcy or foreclosure. Once enough time passes you can start all over again. Actually I lied one more thing I forgot to mention. NO credit is 100% different than BAD credit. They are like apples and monkeys. Not even in the same isle at the store. Bad credit needs to be repaired over time. NO credit is as good as good credit. its a fresh clean slate and once you learn how credit works you can EASILY and and for free, mean without paying anymore money out of pocket each month than you normally would, build up good credit within a few months, if not faster. Iv had clients purchase homes 60 days after we spoke for the 1st time and they had no credit the day we spoke. Iv also sold homes to buyers with 580 credit scores, so asking if it was under 700 didn't make much sense either. Anything over 600 is good in my book. Under that is bad. Over 700 is wonderful. Over 800 is perfect. Feel free to contact me directly with any questions relating to credit Iv rambled long enough. Hope this helps if but one person who was confused about credit being tied to income.

I didn't realize it was in PA.  What part?  Just curious, I'm in the Philly metro market.  Let us know how it goes.

Cody L. I think you missed my point. I love sales. I am in sales. Sales is the greatest job on earth. BUT no 7 year old kid says they want to be a "salesman" when they grow up. Sales people get a bad rap. I knew I wanted to be an entrepreneur my whole life. But I'm talking "sales" specifically is not typically what people strive to do. And more specifically when people watch the tv shows and think they want to get into real estate, I'd be very surprised to hear they all knew that sales and marketing were the key to this business. They think it's all about picking cute colors and designing nice kitchens. It's all about getting the deal, getting it closed, negotiating good work at a fair price and then closing the deal on the back end. (For a flip). If you wanted to be a sales guy since you were young, awesome. I'm just saying I didn't even realize sales were the key to business building until I was into my twenties yet I had been opening and running businesses since I was 7 delivering news papers. That was supposed to the point I was conveying. Not everyone is cut out for sales.

Realtor.com is "supposed" to be the most accurate and up to date site. Since realtors are forcibly made to pay them all that money you would think they could compete with Zillow a little better. To be completely honest Redfin, even though I don't work for them has been the best consumer facing site iv seen to date. Especially for investors, they appear to be the only site that lists information in a per unit basis for multi family. They also tend to push new listings almost as quickly as the MLS. I feel their overall company model is flawed being that they focus on the buyer side of the transaction, hence all the great features I just mentioned, plus they offer a commission "refund" if the buyer happens to meet some criteria like view less than 8 homes, use their lender and title company etc etc. . So they cut off their own knees while targeted the side of the transaction that takes 10x more time and effort to close a deal compared to the seller side. That's just my 2 cents though on consumer facing sites for information gathering purposes. Zillow becoming a wholesaler was my point of the OP. Consumer facing sites can be useful, until they start doing things like this.