Need some advice!

Go to Coastal Funding and print your own proof of funds.

Hi Chris first you'll need to get an Average Price Per Square Foot for the neighborhood. Ask your agent to pull a list of SOLD compareables at least 10 no less than 7. From that list add all the price per square foot listed on the mls listing, this is what the house acctually sold for add them all together and subtract highest and lowest. Divide by the remaining and that is the new price per square foot to use to multiply the square feet of your prospective property by; the actual FMV of your REO ARV. So using that FMV you deduct the repairs,closing cost and at least 12% profit for your CASH Buyer then your assignment fee, this will then be your offer price.

"Within six years you will be a millionaire. At that time you will be free to undertake the steps necessary to share this legacy with people"---different journeys by Mark Fisher

Also, you dont need a POF letter to assign the contract as is done when wholesaling. If your agent requests it then just tell her that you already have the interested cash buyer. Coastal funding will work thoug if she persists. But you agent should be your partner and understand what and how you are using her and what she had to gain by helping you..

HI Kathy,

Thanks for the info. This is actually how I came to the FMV and offer price so the numbers look good. I have a proof of funds letter (thanks for the tip Golden Edge) and now preparing to present the offer. I'm planning to assign the deal but because it's bank owned can't put 'and/ or assignee' on the contract. Would a double close be the strategy for this?

Thanks again for your input!

You're right! I'm going to contact her now and see what we can come up with.

Thanks again.

If your numbers are accurate you have a great deal. IF your numbers are accurate. Even if you locked the property up at asking which is $50k and the property is worth $125k you are already at 60% off! Now, let's start messing with the numbers a bit. Check it out below.

$50,000-Purchase Price
$125,000-ARV
$15,000-Repairs
$5,000-Wholesale Fee (conservative)

$50,000+
$15,000+
$5,000=
$70,000-Sale Price to end Buyer! That's still giving the end buyer 44% equity! Now, something you need to find out is, how long has this thing been on the market. If it's been a while, you need to ask why? Why hasn't it sold yet? Did they just reduce the price to finally move it off of their inventory? Just some thoughts for you. Good luck and I hope this turns out to be what you hope it is.

Billy

Thanks Billy, I hope so too. It was under contract but the buyer pulled out because the bank was taking too long and he found a better deal. The bank is now ready to move and it's been on the market for a few months. I'm going to send the offer to my agent today but she's asking for 'amount at contract' and 'amount at closing'. How much should I put down at contract? Do I need to put anything down at all? I'm also trying to wrap my head around what to put on the contract - can I put and/or assign for a bank owned property or is a double close the way to go? Today I'm going to find a RE attorney to help me with the contract and will give the DG coaches a call with my questions! It's great to have access to this site with these questions to help settle the nerves

The offer is in so fingers crossed on this. We offered $30,000. The bank needs to do another BPO so we'll hear next week if the offer is accepted!

Great job!!! I am sure everything turn out just fine!

Matt Inomata

I have Learned that if your offers are NOT even numbers they are accepted more often, showing you have done your 'homework'

EX: instead of $30,000 offer, submit $30,762 or $29,874, get the idea?

Mike

Congratulations on taking ACTION, I know that it can sometimes be scary but it gets easier with practice. Good luck on your offer. :0)

Mike - thanks for the tip. I see what you mean. Great to know for future offers.

Hillvalley - thank you. Fingers crossed!

If it is an REO (bank owned property) you will have to do a double close. 99% of REO's will put language into a purchase contract stating that you cannot assign it.

Generally if in the body of a contract assignment is not specifically precluded or disallowed then an assignment can be done. Therefore adding and/or assigns is like making double sure and is not a vital component of being able to assign a contract.

Hope that helps.

Ok. If it's a short sale, or at least a short sale in the making, you can use and/or assigns and still be OK, as long as the bank says it's ok. If they say yes, sign the contract, then say no, it's on them! But in short, Mike is right about the even numbered price. I made a 2nd position short sale offer last week, with and/or assigns, with one even number, and the rest odd, including cents. Why the cents? BC it's different than what they've been seeing and it just might work better. It was an offer like $67,757.35 or something like that.

The whole point is to make sure it looks like you did you homework well enough, and it makes it look like you're giving more $, when you're not. Will I get the property at or near my price, with the 1st offer from an investor with a higher cash offer? More than likely, not, but if it makes their offer sweeter, that's all that matters. IF it does for some miracle reason, I'd be shocked & excited. Who knows? Maybe others will see that offer, find me and get me on board with more properties like that. Cool, huh? Keep us informed on this potential deal & keep up the good work. (:

If you are going to do a double close, don't for get to figure your costs for that!

Transactional Funding costs-- minus $2400 (or whatever your costs will be with your servicing company)
A-B closing costs--- minus 3%
B-C closing costs----minus 3% (which will be higher because this will be based on the price you are selling to your end buyer)

This can be a nice sized chunk and will eat all your profit if you forget to calculate!

Karen

Hello,
Its great you are out there finding deals.

1. MOST IMPORTANT: Have your buyer ready!
2. I use www.besttransactionalfunding.com for my POF; banks have rejected Coastal a few times for me, but some do accept it.
3. You may need to double close, but find a title company that can do a 'dry' double close; meaning, they can use an end buyer's money to fund both your closing and the final closing. You may need to call SEVERAL of them to find one!
4. What other terms did you put in your offer? This is just as important.

Best of luck to you. No matter what happens, you are taking action! It will teach you so much! Where is the property located. I may be interested!

"Best" is the one I am using also.

Suggestion: Instead of calling all the Title Companies and asking if they double close, try contacting the Transactional Funding Company and see if they can tell you which ones in your area do doubles. Don't mention "wet" to the Trans Fund people. Then when you call the Title people ask if they will do them "wet". May cut down on some dialing.

Karen

has the best verbiage of all the POF's that I have seen.

I'm sorry, I realized my error falling asleep last night. DRY double close is when you use the end buyer's funds to close. WET is actually using other money, such as transactional funding to close. I need more sleep!

I don't think they will let you do a dry one with a bank--only wet.

When I first read your post I was thinking that was a dry one that you were describing, but when I went to my notes to double ck procedure, it said wet has to be used for banks. Unless, as always, there is a way around it.

Karen

sometimes you can assign a bank owned i'm told, but it's so rare that most don't even go that route and opt for a back to back close.
one other note, if this is a deal don't be greedy. if their asking 50 i wouldn't ask less unless it's been listed awhile. put yourself in a position that makes it easy for that bank to work with you. especially if it's a local bank. it's not about this deal, but the next deals.
keep moving forward, rob

Wow! So much helpful information - thank you all so much for your input. I contacted my agent yesterday with a new offer with an odd number citing recent comps and the avg sq ft price, cost of repairs, closing costs and holding costs and she was happy to offer the new price since she is waiting on the bank to do their BPO before putting in the offer. I have a subject to approval of buyers associate clause and a 19 day closing. I will call the transactional funding company today and ask if they know of any title companies in the area that do double closes then try to find one that does 'wet' closes. This is new to me so a call to the coaches is in order to discuss costs of this. Thanks Karen and Tammy for pointing me in this direction. I have buyers interested buy am concerned they will circumvent me on the offer if I give them full disclosure before getting the deal locked up. Some new information to learn! Thanks again for everyones input - it really is a huge help

Work It!!

Mike

Have been busy contacting title companies to find one to work a double close and have been in contact with a new potential buyer interested in the area so hope to hear back from the bank this week.

I may have another potential deal for seller back financing so if anyone can walk me through actual seller back deals they have done that would be great.
I received a call from a man wanting to sell two condo's in retirement home as his father has gone into care. After getting the details and doing some homework his asking price was about 20% higher than the FMV but this could be a good cash flow opportunity.

Ask: $132,500
FMV: $105,000
Rent: $950
Fees: $154
Taxes $2,500

At first I was thinking I could assign the deal for a small profit if we could agree to $92,000 but when he heard the figure he nearly hung up on me. I want to make this a win win for us both so I asked if he would be open to seller financing if we agreed to a price closer to what he wanted. He is interested and wants something on paper. I gave a call to the coaches who clarified the process but any advice on how to write the deal with these numbers would be brilliant. More study tonight

Talk to the Transactional Funding ppl (link below w/POF letter and BEST rates) and they will tell you what title co's are doing double closings, assignments etc, they work with.

Period.

Save your time even though its good to know how a title co works!

Mike

Brilliant - Thanks Mike!

Chris, I am impressed by your follow through on your motto of "Actions speak louder than words". I noticed you have been a member since 2010 and did you say this is your first deal? I am not in any way making fun, because I too have been one to state the motto, yet, since 2009 of deciding to do become an RE investor, have not completely followed through the steps to get through and past my first deal. Thank you for posting, it has given me the heat under me to get me up and started right away. Also, you have been asking all the questions I've had that have stopped me, only the best thing is that you are taking and following through with the actions to ensure your success. Keep it up!! I've heard say the best leaders were once great followers. I will now follow into the line of followers. Keep us informed. I want to know how it turns out.

I've bought a few seller financed deals and here's a quick breakdown of the steps:

- I used a standard Purchase and Sales Agreement. If you're looking to assign the deal you can add the "add/or assigns" language. Technically not needed as any contract is assignable unless it specifically states not (confirmed through my attorney).

- Put your terms into the contract. Mine was 10% down, 6% interest amortized over 30 years (this was a few years ago when rates were higher). Include the standard contingencies such as inspection and appraisal (you want to make sure you're not overpaying).

- If you're assigning, make sure your numbers are acceptable so someone else would want to buy it.

- Depending on your state, you'll close through a title company or attorney. They'll draw up a copy of the actual promissory note.

Hope that helps,

- Tom

Thanks Arcey. Correct, I've been a member since 2010 and put myself through the RE Academy and am still chasing that first deal. Life sucked me back in so to speak but one step at a time just need to keep moving forward and face my fears. I'll keep you posted!