First Deal HELP!!!....

I really need your help.

Any advice you can give would be greatly appreciated.

Thanks.

Brian Carter

Okay, here is a quick question... how do I get people to respond to my post. I've posted things in the past (under a different account name) and no one responded. No one has responded to this one either.

Is there a certain type of title I should use, time of day I should post so people see it or what?

I'm looking for your help DG family, please don't let me down.

Thanks.
Brian Carter

Brian Hello...
This Is Deric and Lora here. you should def get the property under contract for the amount you need to make money. You should use the "Investor disclosure statement and sellers acknowledgment" forms found under DG.com/ieecontracts.
this will let you be honest and totally transparent to the seller that you intention is to get their property sold to help[ them, then to turn and sell it yourse;f. You are in the business of Real Estate Brian and for your knowledge and time and effort..you deserve to get paid!! soo..hope this helps you out!

Deric Peveto

thats why no one is responding.

To give you advice would be to justify what you are doing and its wrong and you'll probably end up getting burned since you have no idea what the first step is.

Take your time and get something that you actually know about. The fact is you're in the process of ruining your reputation before you even acquire. Don't lie about what you have because as people will find you out to be a fraud and word gets around quickly.

Do the right thing.

Elix,

I appreciate the very honest response, however, now I'm more confused than ever. Even Dean in his on video blog says "fake it till you make it" and other well known members on this site, said they started by listing phantom ads to build a buyers list.

I thought what I was doing was a little more honorable than that. I don't actually own the property but at least it isn't a fake. I'm the one taking a risk by not locking it up first, however, I figured if I didn't lock it up and didn't put any money towards the deal... then I could still build my buyer's list and maybe even close my first deal if it all worked out. I would wait until I had some interested parties then lock the deal up.

Correct me if I'm wrong but that is exactly the same as discussed on this site just in reverse order. The only thing at risk right now is me losing the deal to another investor who knows where to look and locks it up on contract before I do.

Again no harm, no foul to anyone involved and I still got some contact information from potential cash investors.

You're right I don't want to ruin my reputation before I even earn it, however, please elaborate as where it is that I've gone wrong.

Thanks.
Brian Carter

Hey Brian! I feel the pain of Elix's comment. I don't agree that you shouldn't receive any responses from the DG family because you may be doing things backwards or that you don't know what you're doing. That is part of the reason for these blogs, to share our experience with each other and be a source of encouragement. I do agree that you are in a position that could very easily lose this deal. But that depends on how you handle it. You should definately get it under contract asap as was suggested to you earlier. If you can't then like you said, you at least have several potential buyers. They don't have to know that you didn't have it under contract. You can simply tell the truth, "that property has been sold." (just not to you.) Don't stop writing in for help. It will help you grow and learn. Best to you!

Connie,

Thanks for the encouragement.
I'll post my real question with explanation below for all to respond to.

Thanks.
Brian Carter

Deric,

Thanks for the link to the investor disclosure statement, this should really help.

Brian Carter

It appears I've struck a nerve with my original post based on Elix's comment above.

Let me try to clarify this post a little before it gets off track. My original question should have been.

What contingencies should I add to the contract to protect myself against the liability of losing earnest money, if I don't find a buyer or a buyer backs out of the deal before my contract is up?

See, I have bad credit and very little cash to invest with. My ultimate goal is to invest for cash flow, however, I understand I'll have to bird dog, wholesale or flip a few deals first to build my cash reserves so I can invest for the long term.

That in mind, I felt this was an easy way to build a buyer's list and maybe put my first deal together. However, without much money, I can't afford to get or keep my money tied up in a property waiting for someone to buy it.

My solution was to run an ad on craigslist to generate these leads as well as do a deal. Now I sit in a situation where I have someone who wants to make a cash offer and I don't even control the property yet.

Having not done one deal before, I worry about how serious this other investor is before I tie up earnest money in locking up this contract.

Now, don't get me wrong, I would much rather do this the "correct" way and if someone could show me what contingencies to put in a contract, I'll be sure to write the offer before I respond to this investor.

As most new beginners are probably in the same shoes I am... I really can't afford to lose any money.

I hope that clarifies things and by all means, please leave me your feedback on this topic... that means you too Elix's. I'm not mad at you, I appreciate and respect your honest opinion.

Thanks.
Brian Carter

And thanks to praying4you theres always mercy:) for all of us, especially as we're learning. Slow down enough to put some practices into play correctly. Kinda like building a house. The house will only be has strong as its foundation. And first things first. GET IT UNDER CONTRACT. Contingencies, I'm not positive to what your structuring(is the a house a FSBO,REO,FORECLOSURE,et.) cause you didnt elaborate, so its important to know the format for proper process. I've posted contengencies when submitting offers for REO's thus far and my contingency states:Contingent on buyers inspection approval/including and not limited to structural and pest inspection. I've also heard Matt and others teach that it can state contingent upon partners approval.

Have you read Deans books?? They are a tremendous help. Wishing you the best.

Maria,

Yes this property is REO, but is listed with an agent.

Yes I've read at least 3 of DG's books (BARM, PFRERN & YTYREP) and been on and off this site for about a year now, however, what I've found was generalization with minimal details on writing offers. That may be because contracts vary from state to state.

I'll dig back into the Contracts and Offers section of this site and see what I can come up with.

Thanks.
Brian Carter

Hello Brian

First thing is take the wood easy out of your vocabulary,at least until you get more experienced,and things start working easier for you.

Slow down a minute,there are thousands of deals that are out there.Don't panic, the sky is not falling.

Elix was right you don't want to get a bad rep. I call on a lot of adds just as yours,and I have been told it was sold.

This is a good one I use,(Tenant is not out give me your info and I will call you for a private showing as soon as they are out),and by the way what else are you looking for, because I have several more coming available very soon.That gets them because they don't want to miss out on any deals.

If you use anyone of the exit strategies you should be okay.

Just slow down don't get rushed into a bad situation.

Jim Kendrick

You do know that you need proof of funds and a copy of earnest money check to have you offer considered on a REO? I would only use the standard inspection period for your "escape contingency". Add subject to my partner or financing or anything else like that and an offer on an REO and it won't be accepted 99% of the time.. Also, you know you can't assign an REO right? You will have to use transactional funds and double close or some other strategy to enable you to flip this property with no money of your own (except earnest that you will get back from your buyer)
As far as writing contracts, your agent will do that for you! The only time you write your own contracts is when you are dealing with the homeowner directly! Elix is right and I must add something to what he said. This is to help you and not meant to insult you. You should read Dean's books again! The questions you ask are readily answered in his books or in the forums on this site. Find this stuff out buy reading and studying yourself! YOU CAN DO IT. You are talking about putting in an offer on a REO and you don't know how the process works nor do you have the capability to submit an offer that will be accepted! So as Elix stated you will be know as someone who does not know what he is doing with this agent and lender!
This is a whole other issue here. You must know how to establish true ARV and accurate rehab estimates. Never rely on the sellers numbers or some website!!
Here is something to ponder. What if this house is appraised at $130,000 but there are 3 comps currently listed in your area at $110,000 and they have been on the market for 90 days. How would this effect your offer?

Hope this helps!
Michael Mangham
MD Home Acquisitions LLC

I would've touched on your post earlier but I just saw it. Let's get right to the point on this, I can feel the energy and the excitement that you have with this deal. First, please please get this deal under contract. I wouldn't disclose any information before I do so. The reason, because someone will snake your deal. I speak from personal experience on that one. Next with contingencies, you can write a a half dozen of easy ones to buy yourself time. The posts above really do a good job of laying it out for you. I suggest you get all your ducks in a row. Meaning, get your earnest money together at the same time that you are looking to write the offer. Submit it and wait to hear back. Normally you will hear a counter, if they straight accept then that means you didn't go low enough . But most importantly, don't fall in love with one deal, there are more out there than you even realize. Hope this helps.
Jeremy K

I appreciate everyone's feedback on this post. It appears that Elix was right and I have more homework to do. Elix, thanks for the wake up call, I'm obviously in over my head on this deal.

However, I'm not nearly as attached to this deal as some comments may have suggested. The only reason I posted the ad in the first place was to build a buyers list as DG.com suggests.

I was trying to take some action like Dean recommends instead of just sitting on the side lines like I've been doing.

I will continue my research online as well as re-read Dean's books.

Thanks again to everyone for their comments and recommendations.

Brian Carter

Brian, I know you want to make things happen and there is nothing wrong with that. Why not advertise your services instead of sying you have a home you really don't have. The "that house sold,.....but!!!!, what are you looking for maybe I have access to it" line will get you but so far and most real cash buyers have short memories.

Look out for FSBO's; that way you control the deal, the buyers come to you, and you can weed out the frauds.

I know the proverbial act is to do exactly as Dean did in the book and you'll get the same exact results, but actually thats not the case in most instances; if it were the case you wouldn't be getting all the sob stories we get on here.

Get settled more in this before you jump in the pool head first. We all make mistakes, but don't make yours so that you don't even know what you did or how to correct it. Take your time, deals will always be around and there is no such thing as 'The One'. RE is a dime a dozen.

Good luck to you.