Shirley's REI Journal

Congratulations!! You are taking action, way to go! Even if this deal is not accepted or it is and you can not close (no buyer or no funds)it will be a huge learning experience! You will learn more and meet more people doing this deal than 3 months behind your computer!!
Now, when you put and or assigns on the offer the bank can and most likely will come back with a non assignable contract. Don't let that stop you. Get your transactional funds lined up if you have not. Check into taking the property in an LLC and selling the LLC. Remember you need to have a real buyer with money in escrow in order to do any type of simultaneous closing. Worst case, you lose your $100 earnest. People pay $20,000 for coaching for what you will learn doing this!! Once again, way to take action!!

Michael Mangham
MD Home Acquisitions LLC

Michael, for the vote of confidence. I needed that in the worst way!!! Just to make sure we're on the same page, are you saying that if the bank does not accept "assigns", the contract is still valid? Also, I think I'll be protected from losing the earnest money because of the CL100. It will not be clear and that is one of the contingencies.... for it to be clear... am I correct? Also, since the RE agent knows that I have the funds to close, that was not one of the contingenices. He led me to believe because of the selling price and because the bank was anxious to get rid of it, they would only accept the offer with proof of funds...from me. I told him I would get proof of funds to him tomorrow, but I don't have my LLC yet. According to your statement, should I get that first and then show proof of funds?
Shirley

Any offer that I make on an REO, the lender always requires proof of funds. Remember this is only an offer. If the bank accepts the offer they will come back with a purchase agreement that will or will not be assignable, you and then the bank will have to sign the purchase agreement. You will have to see what the bank comes back with as far as accepting your contingencies.
No, you do not need an LLC for yourself. You can get an LLC and put this property in it and sell the LLC to your buyer. This is one of the ways you can get around the non assignment issue.

Michael Mangham
MD Home Acquisitions LLC

Sounds like you are making it happen!

Can't wait to hear how everything works out.

Karen

I am reading about transactional funding now from your post on Cameron Dunlap's course.. Are you still using him?

I think I understand what you're saying about the LLC.. you're saying go ahead and purchase the property, then put it under the LLC before I wholesale it?

Yes, Karen, I'm trying to make it happen girl!

You would put it in the LLC before you close (Your LLC will be the buyer on the purchase and sale agreement) and sell the LLC to your buyer for your fee. I don't do that, but others do, I just use Transactional funds, it's to easy!
I use Cam's stuff every day! You just have to have that buyer in place at closing!

Michael Mangham
MD Home Acquisitions LLC

More than likely, the bank will want to close with their title company. If they decide to go that route (and they will), that's fine. Just tell their title company (when they are ready to close) that you want to do a "courtesy closing" at your title company, and don't disclose anything else other than that.

What their title co. will do is prep all the docs and send them over to your title co. At that point, your title co. will facilitate the B to C transaction as a simultaneous closing. They will wire the funds for the A to B transaction, but you will already have the funds from the buyer ready to go, so all the title co. needs to do is apply the funds from the buyer to the A to B transaction, and you're good to go on the same day. Then your title co. will take care of everything else, and fedex all the papers back to their title co. and it's a win-win for everybody without having to use transaction funding or doing the LLC. The trick is getting the good hookup with the right title company, and setting up your B-C transaction ahead of time. Other than that, way to go!

That sounds easy enough, but is it? What if the bank won't allow me to use another title company?

Michael:

I hate to sound dumb, but I'm not understanding the LLC. I thought to get an LLC, you had to put it in your name. You said get an LLC and put the property under the LLC, and to use LLC as buyer. Can you just use "LLC" as buyer with no name? I'm not understanding.

the REO on craigslist. I'm anxious to see what kind of response I get!!

Now I have to get a mortgage company for a girl who has no recent credit to see if she can get a pre approval... She wants a house.. has never owned on. Hope she can get it!

Have you actually done a deal and had that stragegy work?

You get the LLC, say it's "Shirley LLC". On your purchase and sale agreement with the bank you, the buyer, are "Shirley LLC. So Shirley LLC has the property under contract. You then sell your LLC to your buyer for a fee and now he owns the LLC that has the property under contract, he becomes an officer and signer for Shirley LLC (some paperwork needed) and he goes to closing and buys in the name of Shirley LLC.

Gena,

What Dallas is talking about is a simultaneous closing. Where you fund your closing with the buyers money. BANKS FROWN ON THIS THESE DAYS! They have heard all this stuff before. This is guru speak! Courtesy closing, don't try it!
It can be done however. You need to work with your own title company and make sure they understand what is going on. The banks title company does not need to know anything about what is going on. Your money will be wired in for closing is all they need to know.
So, the b to c takes place first, your title company(b to c) will need the HUD and the deed packet in advance from the banks(a to b)title company. Just tell them your PM guy needs this info. At least 24 hours before the b to c. Your buyer will need to wire his funds to your title company (b to c) 24 hours in advance.
Close the b to c then have them wire the funds to the a to b title company and go close there. Your buyer MUST be fully aware that you are using his funds(b to c) to cover your closing(a to b). He usually will have to sign a statement saying he his aware how the funding will take place.

This procedure is pretty much the same when you use transactional funds to do a double close. Never be dishonest just do not supply the lenders agent or title company with TMI!!

Hope this helps,
Michael Mangham
MD Home Acquisitions LLC

Michael.. that sounds really good...thank you! But...one more question. If I do it this way (use my own attorney and his title co instead of the bank's) I still need to provide proof of funds (my own). Will that put a red flag up for the bank or will they still not know that I'm using someone else's money?

I had a call from the RE agent today and he told me that I needed to come by and sign a "Multi offer" form because there were other offers. I did so... and upped it from $4800 to $5000. So... not sure yet if I'll get it... will have to wait and see.

I got a response from CL. A guy wanted to know where the property was so he could ride by and look at it... What??? I may be crazy but I'm not dumb!! I told him I wouldn't be able to let him see it until the weekend (he'll have to figure out why for himself..LOL)...Maybe I'll know by then if my offer is accepted. I also told him that to protect myself I'd need him to sign a non- circumvent non-disclosure form. Did I call that shot correctly???? Anyway, like you said, whether I get it or not, I learned a lot...There are plenty more out there and I'll know better how to handle things the next time from my experience this time!! Thank you again for all your help Michael.

Keith, you're right!!! I didn't need the "GUY" to give me any of his so- called expertise ! As for telling him..... all lines of communication are CUT OFF!! LOL

I forgot to mention, I was very interested in Carson's program until I came to the part about "the next 10 people who sign up will get a $1000 discount"... since I wasn't on that call, I'd have to pay the $2000 fee. I thought that was a little steep even if I would get it back eventually. However, if using my own attorney works like you mentioned, I would just use that every time. I'm so excited! I have 3 different RE agents sending me foreclosures now!!! Good things are going to happen.

great job in taking action. Mike has said it all so I have nothing to add. Doing always beats surfing on the web!

You do not have to close using the POF source you provided. You can give them any POF that will work and then close with whatever funds you can arrange. The lender and your agent don't need to know anything other than the money will be there at closing, you have my POF.
Once you have the property under contract you won't need a non-circumvent, you will control the deal, If he does not want to buy, tell him no problem, I have several other people looking.
Be careful about advertising a property that you do not control. Investors will have their agent check the property and it will not be under contract. That will hurt your creditability with your buyers. Besides it is not legal to advertise a property you don't have under contract or have permission from the owner to do so.
Finally, I hear Highest and best, multiple offer situation ALL the time. They are just trying to get you to pay more most of the time!

Good Luck!!
Michael Mangham
MD Home Acquisitions LLC

Thank you. I know I'll be ready to jump for joy when I get that first one under my belt.... Hopefully it'll be this one, but if not...there's no shortage of foreclosures out there so I'll just move on to the next one!!

Yeah, I wondered about that yesterday after I posted it on CL. I guess I was over anxious... didn't think about not getting it accepted.... or that I didn't have control of it. I'm going to take it off NOW!!! thanks for heads up!

I meant to say Cameron's program... not Carson's... DUH

For more info, I have attached the video. Michael explained it well, though. It's a little different that what she does, but I'll let the video explain it:

http://youtu.be/d8CextgHQJM

To be honest (I know I'll get flack for it), I haven't closed a deal, and I haven't used this method, but I though I would share it. The video was posted back in Sept. 2009, so unless the method has changed since then, then it has and I'll deal accordingly. It sounds like a great way to bypass transactional funding, if one can make it work.

Dallas, I checked it out and she does have some good info. But she states that she uses HER title company (b-c closing) and then has them send info to the Bank's title company for A-B closing. However, on her funding site, it specifically states that both transactions have to be done by the same title company. Did you pick up on that? So I'm wondering which is correct.

That is only if you are using Transaction Funding to close the deal. If you do a simultaneous close and not use a transactional funder, you are ok. It depends on which route you go, so, she is right when she talks about doing a simultaneous close at her title company. It basically eliminates the need to use transactional funding, essentially. And that transactional funder she uses is correct, too, IF you use their funding to close on a deal. You must use the same title company if you use transaction funding. So if the bank says they're using their title co., and you use transactional funding, you can still use the bank's title co. with the transactional funding, and it would still work. With either method, the buyer still needs to have their funds wired to escrow at least a day before the closing date for either method to work.

I hope that helped clear that up for you.

some very useful info. Shirley you asked excellent questions, and Mike and Dallas provided some excellent answers. I wish all posts were as beneficial as this one.

Shirley, best of luck to you and please let us know how this turns out. Definitely Bookmarked!!!

When you order through my website the price is always $1000 deposit, if not, PM me and I will get that price for you. Using Cam's TF you can and usually do close using 2 different title companies, you don't have to use the same title company as the bank with his TF. I am telling you this, banks do not like double closing on their REO properties. Do not tell them what you are doing, it is none of their business if the money is there for them at closing. By using the banks title company(or trying to) that can and has KILLED the deal. Find and use your own title company, never use the banks title company for the b to c transaction.
This is just my opinion that comes from doing this multiple times. If you get to the point of actually doing this, PM me and I will walk you through step by step. It really is not hard. The hard part is getting the deal that some one else will buy from you.
You have started that process!! Good for you! So many never take that REAL first step. Like I always say, the hardest part of this business is finding and getting a REAL deal under contract and the flipping it to someone that actually has cash (if you are wholesaling)Everything else falls into place and you learn in the real world, not what some guru says on a webinar. Once again Shirley, WAY TO GO!!

Michael Mangham
MD Home Acquisitions LLC

Thank you.. You're right... this was WONDERFUL information for me and others I'm sure... but especially me...LOL..

Mike and Dallas, once again, thank you for all the good tips and for clarifying the transactional funding/simultaneous closing issue. I think the easiest thing for me would be to find my own attorney (in SC, we have to use attorneys) and his title company... I think I'm right in saying that..maybe I could choose the title co. too??? not sure about that.

I do have another concern though. The purchase agreement does not state anything about my being able to show the property to a third party. Is this a given for the real estate agent, or do I have to add that as a contingency or addendum? If I did, this would tip off the bank as to what I'm doing. How do you get around that? I'm sorry I keep asking questions, but they keep popping in my head.

Is it customary for banks to have the buyer pay all cc on REOs? The bank countered my offer and one of the things they changed is that I would have to pay all cc.

Tell them you need to get your inspectors, contractors, realtors, business partner in to look at the property during the inspection period, should not be a tip off of any kind. Just normal stuff you need to do, then show your buyers!
The banks usually go 50/50 on closing costs these days. Can't be a lot on a $5,000 property worse case.

Michael Mangham
MD Home Acquisitions LLC

Shirley,

that's great that you are taking action, but I'm wondering...
how much are you planning to charge for your assignment fee? If you get the property for 5K, it costs 14K to fix, you're already at 19K; you state that comps are 14K-22K...

wishing you success,

Valerie

Mike, that's exactly what I wanted to do, but the bank countered and wanted to up my EM as well as the price. They also stated that I would have to pay all cc. The initial offer was that they would pay 3% of purchase price toward closing. At $5k, that's only $150. Also my RE agent said the bank had the CL100 and knew that it had termites and some kind of beetles. I now have until tomorrow to take it leave it, or counter again. There is no water heater. It was on the outside (?) in a metal type bin (strange) and someone either stole it or the previous owner took it with them. The seller is supposed to fix any leaks, repairs to heating, a/c, plumbing, electrical,etc and to treat for termites. I'm sure they know they will have to put out money for all this, and I'm sure treating for termites is expensive. That could be the reason they're doing this...trying to get all they can upfront.

Valerie, those comps are all foreclosures too. Evidently all comparable houses are in foreclosure.

Jim, I know you said to listen to my head and believe me, I'm not in love with the house.. just the idea that I could wholesale it!! LOL... or is that what you meant?

Upon looking back, zillow is where I got the comps... Valerie, you may have just saved me. I'm walking away from this one. The realtor is the one who told me they were foreclosures, but it doesn't matter now.

Thank you EVERYBODY who contributed and answered all my silly questions. It has been a real learning experience and I'm ready to move on to the next one. I found a 4 plex today that is for sale by owner. I'm going to concentrate on that next. I might even be trying to pass it on to a DG'er. I also saw an empty house with no sign and I'm going to try to find out who it belongs to. It looks like somebody has been re-doing the walls from looking iside.... maybe I can catch some people working there soon and ask questions.

Moving forward.....

Shirley,

it's been a great learning experience for all of us, not just you... and there are no such things as silly questions...

something to keep in mind- always think of Joe and Stacey's teaching: "if you're not embarassed by your offer, you're probably paying too much"

There's plenty of houses out there and I'm sure you will find your deal pretty soon.

Wishing you success,

Valerie