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I am still a little lost. You say "($22,000 + $25,000)". Does this mean $22,000 to $25,000, giving a range? Or is this an addition problem?

From the break down I am guessing you are saying that the property is worth about $65,000 as an average with $35,000 in repairs needed. You have a VA buyer that you want to assign the property to and make $5-$10K.

Couple of items: With repairs as high as they are this would be a bit riskier property if you were to purchase it. If you assign this you also have to consider how much the person getting a VA loan can pay for an assignment fee. If they can pay $5-$10K then great if not you will need to consider working with what they can afford. I say this because the buyer pays your fee.

Did I get everything right?

Hello! yup - newbie here! I have, however, been diligently searching for what MAY be a good deal to get my feet wet. Specifically, I'm looking at doing an assignment for a property listed in "pre-foreclosure" status. Looking at the numbers, I feel it is worth pursuing, but I need some confirmation that I'm looking at/evaluating the RIGHT numbers. Here we go:

House: 2br/2ba, 1,851 sqft, 1 story, corner lot to cul-de-sac, nice/clean/upscale neighborhood. Asking price: 167,900. Been on the market for 254 days (cyberhomes.com).

Median price for comp. homes in area: 178,852.
Last appraisal (1/09, county appraiser's office): 138,236.
Fair Market Value: 172,955 (totalviewrealestate.com).

I haven't seen the property, but newer construction (built 1994) and it looks well taken care of/well groomed.

asking price: 167,900
Less 30%: 117,530 (50,370)
Less "fee": 107,530 (10,000)
Offer: 107,530

*If* sold at 107,530 (60-day "option" with 100 earnest), and assigned for 117,530 (purchase price + my contract price), end buyer would get the property for a 30% discount of asking price - which is a bit less than median value and still a bargain.

There is a seller's agent involved, so there are some other additional (minor) costs involved, but these are the rough-numbers.

Are these the "right" numbers to be looking at/working with? If this were a solid deal, is this attractive to a buyer - especially looking at gaining the 20,706 equity based on the end buyer's price and the appraiser's value?

Also, even though the seller has an agent, is there anything stopping me from dealing directly with the seller and bypassing the agent + fee's altogether (or should I not upset a potential agent-partner for future dealings)? What about a better "spread" between asking price and appraised value or median/fair market values?

Thanks to anyone for help/advice/encouragement!!

Chris

Your numbers and your formula look fine. Here are however a few items to consider.

First) Does the investor have the money to pay your $10,000 assignment fee? This is a lot of money to ask upfront. Not all investors will have this to pay so consider this when getting a buyer for the property.

Second) Assignments of contract are difficult to do on REO and Pre-foreclosure properties. The banks normally reject offers with and/or assigns on them. There may be ways that you could get this to go through (check and do a search on the forums). The other option that would work out well would be a double closing. This would allow you to charge your fee through closing also. Double closing may be the better route in this scenario. Just make sure that you have a buyer first.

Thanks, Coach!

At least I know I'm looking in the right direction. I am marketing/searching for investment buyers to make the financial transaction a bit more "reliable" than a private buyer, which I do want to have in place before I make an offer. Also, I am nervous about double-closings, since there are some variables that can turn out to make it a nasty/sticky situation (a risk I'm not in a position to assume right now), but certainly an option none-the-less.

Thanks again for the input!!

Chris

Double closing can be easier to complete if you have a few safety nets in place.
1) Get an investor list that would be willing to purchase quickly from you if you have to purchase. This way you still make money.
2) Have contingencies in place that allow you to get out of the contract. You may even have contingencies that allow you to get out of the transaction all the way up to the time of closing.
3) Get a hard money source that would allow you to purchase if your buyer falls apart. Once you purchase you can sell to the investor listed in my number one above.

Thanks you for answering my questions.
I have more:)
Many "potetial buyers" that I have been speaking with are vague about what they are looking for many have said anywhere as long as it is a good deal So I ask what is a good deal and some still don't given me a straight answer. I know they are investing. But can I consider them qualified if they don't give me answers to the qualifing questions?

yes sir, the $ 22,000 is what the owner said. But im now going to check the info my self! at the courthouse( the TAX office )what it last sold for, and the agent that gave the app. at $ 22,000. also the Fee for the assignment should Be more like $ 500 to $ 1000. in this range.

VA loans ,Im sure this takes a little time also?

tell me , this sounds more like the real world ?

thanks for your help

JayBob

I love this question. I have answered it many times and still enjoy it.

What you will want to do is play worst case scenario. Let me give an example:

If you are asking what area the investor will invest in and that investor states that anywhere is good enough you will want to find the absolute worst, crime ridden, down trodden area near you or in their investment scope and ask them if that area will be ok.

Most, not all, but most will say...well, no, I don't want a property there. BAM! That's when you jump in and say...well, because you don't want that area you do have specifics. What are they?

Another example: If you are asking what they would for in bedrooms and they say anything you would then give them a 1 bed 1/2 bath and ask if that would be ok. When they say no ask for their criteria.

Most people have criteria even if they don't tell you upfront.

We often asses the assignment fee as 4-5% of the value of the property or as 10% of the equity of the property. If the VA borrower can pay this great, if not you could work with them in the range you mention above.

VA loans will take more time to close. If you assign the contact I may suggest that you try to get the assignment fee when you assign the contract not closing or after closing. This way you are out of the deal quickly with your money instead of waiting for the VA to close.

Good afternoon everybody. My name’s Anthony. I just finished reading deans How to be a Millionaire and already have a deal lined up. Only thing is I’m a little confused and was hoping that maybe someone could help me out? If anybody can I would greatly appreciate it. Here’s where I don’t know what to do.

I have a buddy that owns a home in Miami, Florida and has been trying to get rid of his home for some weeks now. He said the home is paid off but the people living in it renting it out also said it’s in foreclosure. Ok here’s the deal he gave me. When the house was bought it went for 612,000. He said right now the surrounding houses in that area are going from 415,000 to 562,000 . Now he has the home posted on MLS for 550,000 but told me because I am family he would sell it to me for 450,000 even if I found another buyer. The home is in excellent condition and is move in ready.

Now I have two individuals who are investors and are waiting on me to give them my leads. One even said that he buys houses cash no matter how big the amount.

What should I do now? I suggested reassigning to the owner of the home but he said that we didn’t need to do that. That he would just give it to me for 450,000 and to try to get a bigger offering. I don’t know what to do can someone help me please?

First I read in your post that the house is paid off but the house is in foreclosure. The house cannot be in foreclosure if there is no mortgage because the house is paid off?? Help me understand what you are saying.

Second. The way to make the most money would be to do a double closing. You purchase at $450,000 then resell even hours later at a higher price to the investor. This will allow you to command a higher profit for yourself. One of the biggest items you will need to look for is a title company that can or will work with the double closing.

Hi I am in a pickle(not litterly inside a pickle), I have 6 houses that were suppose to close last Thursday my private money guy showed up with a letter from IRS that his funds are froze till after they complete this audit. After tears, jumping up and down and nearly fainting I negotiated 10 extra days out of the banks to find another private money loan. I went on craigslist and got a response. They said they could do the deal even though I gave them limited information. Phone number out of Concord, CA. What are some solid questions I can ask to make sure this is the real deal. I am seriously closing in on this new deadline and this is the only person that responded and not haveing any luck with anyone else I have in my pool. 3 are REO's 3 Personal Sales Accumilative ARV 500000 I ask for 65%, for purchase, rehab and closing costs offer 15% interest and will pay 1 year interest for 6 months use. Exit stategy, refi in 6months, or sell to buy and hold investor. That was all the info I gave and they said they could do the deal. I don't have time to waste on scammers so just wondering if you know of any questions I could ask to kinda weed those out.
I can't loose these deals I negotiated them way down. Any help would make my day.
Thanks Donna

thanks for the info, and will be back with more up dates on the Deal.

thanks JayBob

Coach,
I just read Donna's question and I'm thinking a bigger pool of buyers on the next offer,Not to say the current deal is done and you could always piece it out.
Coach,When i tally my cost when buying a property,The closing costs are the numbers i do not know!To be straight foward i know too line up my team in Real Estate Investing, I guess it might sound better from you.
I hear buyers talk about seller concession for the closing costs?
That is what leads me to...percentage or standard fee? Is it a standard fee...But when buying a property as a concession the buyer asks for a precentage of the deal.

Rosefield

I am sorry I did not get back to you earlier.

I would follow the questions on this forum post.
http://www.deangraziosi.com/node/4080

I hope this helps.

Thanks for the questions.

For closing costs I normally do not know what they are either. What I do is take a percentage of the value of the property. Normally, I work with 3% of the value of the property. This is regardless of what I offer and this will usually cover all my closing costs.

As far as asking the seller to pay closing - this is very common. It is hard to just ask for a blancet "seller is to pay closing" but rather "seller shall pay closing up to $5,000" or something similar.

Thanks Nate I guess even a rock star deserves a vacation.
Donna

Hello,
I would like to send an email to Matt Larson
about doing in person training.

Do you have his email address?

Thanks

nstreet,
Thanks,The 3% is common!So if someone asked for 6% in closing cost it would be extra income(I bring this up because someone posted 6% CC on thier deal).
Your advice is good about straight cost.

I am also new to this site, and am in a similar situation to trumarone above.

I have finished the first book and am on th second. I am currently 10 months behind on my mortgage. I was divorced in April, and was unemployed until 3 weeks ago (sounds bad, huh...).

I would like to save my house and get started in investing. The issue is as follows:

My ex and I agreed to pursue a short sale. The realtor is a cousin of her sister's husband. Before the divorce we agreed to do a short sale, as our neighborhood is full of houses that have sat on the market. After the divorce, I decided I wanted to try to save the house. I cannot afford the monthly mortgage on my own, and was hoping to get lucky on a refinance. But I was told by my mortgage company I cannot try to do a modification while we are pursuing a short sale. I have an appointment to see a different lender on one of these new government sponsored refinance deals. I have not told the ex about my intentions as I know she will be against it.

Here are the questions:

Will another lender take on a refinance in this situation?

If she is on the mortgage, can I still pursue this even if she does not agree to sign off on it?

Seems like I will have to be the buyer and seller, but somehow it doesn't seem legal unless I but it for what is owed on it. Kind of odd too, since I am trying to get into this and may not even be able to save my own place!

Thanks!

I am currently doing Matt's 25/1 My question is how often do you make the 25 offer? 25 a week, 25 a month, 25 a???????. I am trying to improve my process because I am currently doing 5 a week

I'm sorry if I am asking a question that has probably been asked on here already, but I am ashamed to say, I do not have a computer and I am doing all of this from my sons Nintendo DS. My question is with an assignment deal I have heard over and over that it is hard to get this type of deal done with reo's and foreclosures, so with that said the only way to do an assignment is with the owner of the home correct? My credit is shot and I have lost my home so assignments is the way I plan on busting the door down with. Whats worrying me is lets say someone is saling their home thru an agent can a reassignment be done on this type of deal? I'm not sure if I am making any sense, but in a nut shell what is the best situation for an assignmnet deal?

your best bet is using the assignment strategy with for sale by owner, that isn't to say you couldn't try assigning a normal (not REO) MLS property listing with agent, if you brought the seller a buyer. You've just have to be transparent in the deal so that everyone knows whats going on.

I have been contacted by two wholesalers who have four properties locked under contract. They would like my help selling the properties and we split the assignment fees. What do I do like what contracts would I need to protect myself and get paid? Does this type of thing happen often and what is the procedure for something like this.? Please help.

your question in another posting, I'll state it again here. Draw up a contract between yourselves stating who will pay who when, how and how much and have somebody witness the agreement.

I guess I am so confused by this and I can't understand how something simple can hang me up. Okay, if I have a real estate agent working for me and helping me find houses for wholesale, subject to's and lease options, how do I put that into my budget to pay the fee for the realtor. Is this a set fee like x amount of dollars that I close on, or is it the price of the house that many want 7% for the sellers when they list the house??? Any help would be appreciated.

Thanks,
Destrie

HI, I like the book. I know it is all true.I want to try but I am very scare. I have no money no good credit. I need your help to start. please help me to start. Thank you so mach.

If you are looking for personalized training with Matt this is actually taken care of through Dean's success academy. If you send me a PM I can get you additional information if you would like. This also goes for others that would like information on this.

The difficulty would be what is the home worth and what do you owe? If you owe more than the home is worth and the lender will not write off a portion of the loan for your benefit the options for you get smaller. Short sale becomes about one of the only options at this point to get rid of the home.

You could hold the home until the bank takes it but this would not be beneficial to either you or your ex.

The 25 is up to you. The idea is that you will do 25 offers and get one accepted. The more you do ... so 25 a week would yeild more properties for you to work on per month.

Keep in mind that Matt makes offers as a percentage of the asking price. This price will also change in the market and during different seasons.

Find what works best for you in your market, stick with it and with the time you can commit and you will do fine.

You may find that you cannot do 25 offers a week. If not do what you can in the time you have.