Typical Deal Timeline

Deal Timeline
1. Locate property: (agent, craigslist, zillow, FSBO, etc)
2. Research property:
a. FIX & FLIP - Determine ARV ensuring there is nothing cheaper nearby without a good reason and the sold comparables support the ARV. Determine approximate rehab costs based on pictures and general assessment of the property. Determine Max offer price by:
ARV - investor profit – rehab costs – your profit = MAX OFFER PRICE

b. CASH FLOW - Determine Gross rents, and expenses (taxes, ins, management). Determine the NET CAP Rate by:
Gross Rents – taxes, mgt – ins. = NET Operating Income/Purchase Price = NET CAP RATE

3. Make Offer: Call listing agent or your buyer’s agent and have them draft contract for you: ($1K Earnest money, 2 weeks for inspection, 3 weeks to close with cash)
4. Get Counter Offer
5. Counter Offer Back
6. Get Under Contract
7. Market Property: Immediately after you get your counter offer accepted begin marketing property: (buyers list, craigslist, myhousedeals.com, etc)

8. Deposit Earnest Money: Within 3 business days of the final counter offer being signed by both the buyer and the seller, the earnest money deposit will need to be deposited in the title/escrow company of your choosing after the escrow agent looks at the contingencies and confirms the date you would need to get the cancellation in should you need to cancel the contract. Up until now there is ZERO RISK because even though you get a property under contract the most they can do if you don’t EVER deposit it is to cancel the contract!!! THERE IS NO RISK!!!

9. Due Diligence Period Expiration: before the end of the due diligence/inspection period you will send a signed notice of cancellation to the listing agent, your buyer’s agent if you are working with one, and the title/escrow company where your earnest money was deposited UNLESS you find a buyer to replace your earnest money. As long as you cancel the contract in writing ether via email or in person and you can prove that you got it to the agents and the escrow officers involved before the due diligence/inspection deadline there is ZERO RISK because the title/escrow company will always do what the contract says. THERE IS NO RISK!!!

10. Closing - Once the buyer replaces your earnest money you can assign the contract, double closing docs, etc, and wait to close.